How to buy Swiss shares? Invest in Swiss stock exchange (2023)
Would you like to invest in Switzerland? In this article, you'll discover how and where to buy Swiss stocks. I'll also discuss what to consider when investing in this successful country.
Where can you buy Swiss stocks?
Below you can see an overview with stockbrokers that offer Swiss shares:
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Investing in the Swiss stock market
You can invest in Switzerland by buying individual shares. However, if you don't have time to conduct extensive analyses, it can be interesting to invest in the SMI index. This index tracks the 20 most important and largest publicly traded companies in the country. You can invest in the SMI index by buying an ETF. An ETF passively tracks the price of an underlying index.
Keep in mind that the level of diversification with an ETF on the Swiss stock market may be limited. Due to the high market capitalization of some companies, the top three stocks can quickly make up 50% of the MSCI Switzerland index.
Which Swiss shares can you invest in?
Switzerland is a very prosperous country with a powerful economy. Especially in the banking sector, the country has had a lot of success, so it can be appealing to invest in Swiss companies.
If you want to invest in the best Swiss stock, you'll need to research which company best suits you. Companies can vary greatly in their qualities, and not every company is equally well suited to every type of investor.
Therefore, first research the risks of an investment in the stock you have your eye on. You can do this, for example, by researching the company's biggest competitors and by investigating the company's future vision.
Some well-known companies in Switzerland that you can invest in include:
- Nestlé is a well-known food producer
- Roche is a large pharmaceutical company
- Adecco is a well-known temp agency
- UBS is a large financial enterprise
- Novartis is another Swiss pharmaceutical company
How to buy Swiss shares?
Many European brokers allow you to invest directly in Swiss stocks. However, keep in mind that transaction costs on international exchanges may be higher.
After opening an account with an online broker, you can start buying Swiss stocks immediately. First, select the share you want to buy and open the order screen. You can then choose between a market order and a limit order. With a market order, you buy the shares immediately at the prevailing price, while with a limit order, you can set a maximum price that you wish to pay.
After purchasing a stock, it's important to regularly check whether the stock still fits within your portfolio. This way, you can avoid investments that no longer match your risk profile.
Buying Swiss stocks in Europe: conflict
Due to a conflict in 2019, you can only buy Swiss stocks on the Swiss stock exchange itself. In the past, many of these companies also had listings on European exchanges. It's essential to keep an eye on this situation if you're considering an investment in Switzerland.
In some cases, it's still possible to invest in Swiss stocks on the American stock exchange with ADRs. An ADR is an American Depositary Receipt. For example, shares of Nestle, Roche, and Novartis can be traded this way.
Monitor the exchange rate of the Swiss franc
When investing in Switzerland, it's important to keep an eye on the exchange rate. The Swiss franc is a different currency than the euro.
If the value of your currency decreases relative to the franc, you may incur losses on your investments. To invest in Swiss stocks, you first need to sell your currency for Swiss francs. When you then sell the shares, you sell the Swiss francs for your currency again.
Swiss franc exchange rate trend
The Swiss franc is a currency that performs well, especially in economically difficult times. The currency is often seen as a safe haven. You'll see that the Swiss franc increases in value when the fear of a recession increases. The Swiss National Bank tries to limit this rise by selling Swiss francs (CHF).
Investing in CHF yourself?
It's also possible to invest in Switzerland's currency: the Swiss franc. A similar investment can pay off well when there's a lot of economic uncertainty. Do you want to learn how to invest in currencies? Then read this article!
Avoid taxes with bank secrecy
In the past, many wealthy people used their Swiss bank accounts to invest and build wealth in secret. This was possible thanks to the so-called bank secrecy, which prevented other governments from seeing how much money was in the account. However, this bank secrecy is largely a thing of the past.
In the fight against tax avoidance and tax evasion, governments are increasingly working together and exchanging bank account information. Therefore, it's not advisable to deposit your money in Switzerland to avoid taxes.
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