The Swiss finance community has a collective aneurysm when someone suggests investing without US equities. The reaction is immediate and visceral: you’re throwing away 60% of global market cap, ignoring the world’s innovation engine, and guaranteeing underperformance. But a 27-year-old earning 5,500 CHF netto per month doesn’t care about orthodoxy, he wants sustainable investments that align with his values, and that means leaving America out of the equation.
This isn’t just another investment question. It’s a direct challenge to the gospel of global diversification that Swiss investors have been force-fed for decades.
The US Exclusion Controversy: Heresy or Hedge?
Let’s be blunt: excluding US equities from your portfolio is mathematically equivalent to betting against the past century’s most successful economic machine. The MSCI World Index is roughly 75% US companies, dominated by tech giants that have delivered eye-watering returns. When you buy into global ETFs through your Säule 3a (Third Pillar) or taxable accounts, you’re primarily buying American exceptionalism.
But here’s what the index-fund evangelists won’t tell you: that concentration is also a massive single-country risk. Swiss investors are particularly exposed because the CHF/USD exchange rate adds another layer of volatility. When the dollar weakens, as it has in recent cycles, your “global” portfolio’s returns evaporate faster than free prosecco at a Zürich banker’s reception.
The young investor’s instinct to avoid the US isn’t irrational, it’s a form of home bias in reverse. Instead of overweighting Switzerland (population: 8.7 million, economy: smaller than New York state), he’s underweighting the US (population: 330 million, economy: $25 trillion). Both are forms of geographic concentration, yet only one gets you labeled a financial illiterate.
Saxo Bank: The “Cheapest” Swiss Broker Comes with Hidden Costs
Our investor chose Saxo Bank because it’s the cheapest Swiss-domiciled broker. On paper, this makes sense. Swiss brokers offer Einlagensicherung (deposit insurance) up to 100,000 CHF, and you avoid the regulatory headaches of foreign platforms. But “cheap” in Switzerland is relative, like saying a Zürich studio apartment is “affordable” because it’s only 2,500 CHF per month.
The reality check comes from actual users: Saxo’s customer service ranks somewhere between Swisscom’s hotline and the line at the Kreisbüro (district office) on Monday morning. One investor reported waiting weeks for responses and being buried in paperwork that would make a Steueramt (tax office) bureaucrat blush. When you’re investing 250 CHF monthly, a modest but respectable amount, you don’t want to spend 10 hours on hold to resolve a compliance issue.
The platform’s fees might be low, but your time has value. For Swiss investors, the convenience factor often outweighs marginal cost savings. Interactive Brokers (IBKR) fans will shout about lower transaction costs, but that means dealing with US tax forms and potential estate tax complications. There’s no free lunch, just different flavors of administrative indigestion.
Sustainable ETFs Without US Equities: The Limited Menu
Finding sustainable ETFs that exclude the US is like searching for a vegetarian option at a traditional Swiss Wirtschaft (restaurant), technically possible, but the choices are limited and sometimes disappointing.
The most direct option mentioned in investor circles is the EXUS ETF (developed world ex-US). This gives you Europe, Japan, Australia, and other developed markets without a single Apple share. But here’s the catch: you’re still getting plenty of multinationals that derive massive revenues from the US. Nestlé might be Swiss-domiciled, but it sells a lot of coffee in America. The geographic exclusion is legalistic, not economic.
For pure sustainability plays, you’re looking at European-focused funds like:
– SMI (Swiss Market Index) ETFs: Heavy on Roche, Nestlé, and UBS, not exactly climate heroes
– DAX or EURO STOXX ETFs: More diversified but still loaded with German car manufacturers and industrial giants
The sustainable label itself requires extreme skepticism. Research shows that “green” ETFs often perform similarly to conventional funds because they use a “Best-in-Class” approach. This means they keep the worst offenders but overweight the “least bad” companies within each sector. Your “sustainable” ETF probably still holds Shell and BP because they’re slightly less terrible than Exxon.
The MDR analysis reveals that sustainable ETFs can outperform, but the criteria are often opaque. Transparency is so poor that you might be paying premium fees for marketing rather than impact. For a Swiss investor trying to do the right thing, this greenwashing is particularly galling, you’re sacrificing returns for ethics that may not exist.
The Currency Conundrum: Why CHF-Denominated Doesn’t Mean CHF-Safe
Many Swiss investors believe that buying CHF-denominated ETFs solves currency risk. This is a dangerous illusion. When you buy a CHF-hedged MSCI World ETF, you’re not avoiding USD exposure, you’re just paying extra for a financial instrument that uses derivatives to smooth out fluctuations. The underlying assets are still US companies earning dollars.
The CHF/USD exchange rate has been on a tear, recently hitting all-time highs. For Swiss investors, this means every dollar of profit from US equities converts to fewer francs. Your portfolio statement might show gains in USD terms, but in CHF, the currency you actually spend in Migros, it could be flat or negative.
This currency dynamic actually strengthens the case for geographic diversification away from the US. By investing in European or Asian assets, you gain exposure to EUR/CHF and other currency pairs, creating a natural hedge. When the dollar weakens, European exporters benefit, and your portfolio’s non-US holdings can offset the currency drag.
Robo-Advisor Alternatives: The Set-and-Forget Swiss Solution
If the DIY approach through Saxo feels overwhelming, Swiss robo-advisors offer a compelling alternative. Platforms like True Wealth and Selma Finance provide sustainable portfolios that can be customized to reduce US exposure, though not eliminate it entirely.
True Wealth, domiciled in Switzerland, offers both global and sustainable ETF portfolios with total costs around 0.55-0.96% annually. That’s higher than pure DIY but includes rebalancing, tax optimization, and, crucially, Swiss customer service that responds before the next glacier melts. You can open an account with 8,500 CHF, making it accessible for someone investing 250 CHF monthly after a short accumulation period.
The key advantage is behavioral. Swiss investors, like all humans, are terrible at timing markets and prone to panic-selling during volatility. A robo-advisor’s algorithmic discipline prevents you from selling your European equity ETF because you read a scary headline about Italian debt.
The 250 CHF/Month Question: What Should You Actually Buy?
For our 27-year-old investor, here’s a concrete allocation that meets his criteria:
Core Holding (60% = 150 CHF/month):
– UBS ETF (IE) MSCI World Socially Responsible UCITS ETF – but this includes US stocks, so it’s out
– Better option: iShares MSCI Europe SRI UCITS ETF – excludes US, focuses on European sustainability leaders
– Alternative: Xtrackers MSCI World ex USA UCITS ETF – broader geographic exclusion
Satellite Holdings (40% = 100 CHF/month):
– Emerging Markets ESG ETF: Captures growth in Asia and Latin America
– Swiss Small Cap ETF: Pure domestic play, no US exposure guaranteed
The problem? Most of these trade in USD or EUR, creating currency conversion costs even on Saxo. Each transaction might incur 0.5% forex fees, eating into your modest monthly contribution. Over a year, that’s 15 CHF lost to currency conversion, 6% of your annual investment, gone.
Tax Implications: The Swiss Twist
Swiss investors face unique tax considerations that make US exclusion more palatable. The US withholds 15% dividend tax on stocks held by Swiss residents, even in taxable accounts. While you can partially reclaim this via the Steuererklärung (tax declaration), it’s a paperwork nightmare that many younger investors prefer to avoid.
European ETFs structured as UCITS funds often have more favorable tax treatment. Dividends flow through with less withholding friction, and the Steueramt (tax office) doesn’t require you to fill out DA-1 forms to reclaim foreign taxes. For someone investing 250 CHF monthly, the administrative simplicity might outweigh theoretical optimal asset allocation.
The Verdict: Strategic Insanity or Calculated Contrarianism?
Excluding US equities isn’t financial suicide, it’s a calculated bet on mean reversion and a hedge against concentration risk. But it’s also not the optimal strategy for maximum returns. You’re accepting lower expected returns in exchange for values alignment and reduced currency risk.
For this specific investor, the best path forward is probably a hybrid approach:
1. Use a Swiss robo-advisor like True Wealth for the sustainable portfolio with reduced US weighting
2. Keep the 250 CHF/month simple: Start with a broad European ESG ETF, add emerging markets later
3. Don’t overthink the “no US” rule: Accept that some multinational exposure is unavoidable
4. Focus on costs: At this investment level, minimizing fees matters more than perfect asset allocation
The real dilemma isn’t whether to exclude the US, it’s whether you can stick to your strategy when American tech stocks are up 30% and your European sustainable portfolio is flat. Swiss investors are famously conservative, but FOMO is universal.
Actionable Takeaways for Swiss Value Investors
- Start with True Wealth or Selma if you want sustainable investing without US overweight, their algorithms handle rebalancing and tax considerations automatically
- If using Saxo, stick to UCITS ETFs trading in CHF to minimize currency conversion costs and tax complications
- Consider the “soft exclusion”: Rather than zero US exposure, aim for 10-20% US allocation via sustainable funds, which is still a dramatic underweight
- Maximize your Säule 3a first, the tax benefits (up to 7,056 CHF annually for 2026) far outweigh any marginal optimization in taxable accounts
- Track your actual CHF returns, not USD performance, currency matters more than you think
The most sustainable investment strategy is one you’ll actually stick with through market cycles. If avoiding US equities keeps you invested when markets tank, it’s better than the “optimal” portfolio you abandon at the first sign of trouble.
Bottom line: Your 250 CHF/month won’t make you rich, but it will build wealth if invested consistently. Choose the path of least resistance that aligns with your values, even if the finance bros call you crazy. In Switzerland, being contrarian is practically a national sport.
