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After much to and fro, the protocol of amendment to new double taxation agreement between the USA and Switzerland was finally approved last year and came into force on 01.01.2020. For Pillar 3a investors, this means that since January 2020 it has been possible to exempt withholding tax on dividend income in the USA. This will give us access to lower-cost and tax-exempt US investment funds. In short: lower fees and higher returns!

Essentially, the switch will lead to an additional return of 0.3% per year on American equities. This is based on the assumption of a dividend yield of 2%, of which the last 15% of the withholding tax can now be reclaimed under the new double taxation agreement.

What needs to be done?

Standard strategies:

If you, like the majority of our clients, are invested in a standard strategy with an investment focus Global, Global Sustainable or Switzerland, you won’t need to do ANYTHING. Simply lean back and watch as we cut costs and optimize your return! With the rebalancing of 02.03.2020, the adjustment is made automatically. The following statement only concerns customers with an individual strategy.

Individual strategies:

The following applies to you if you have put together your own strategy: If the new, withholding tax-exempt fund replicates the identical index, the change will be made automatically for you. If the new fund differs from the existing index, or only tracks a similar index, without adjusting your investment strategy, you will remain invested in the current fund.

Conclusion: If in your individual strategy you use the following funds, you must make any switch to the withholding tax-exempt fund YOURSELVES. We therefore strongly recommend that you review your investment strategy.

iShares Core S&P 500 ETF

UBS ETF MSCI USA SRI

iShares US Property Yield

CSIF Europe ex CH Real Estate

CSIF Asia Real Estate

Once you have adjusted your strategy, the change will be implemented with the next rebalancing.

Changes in detail

Equity building blocks:

Previous Fund New Fund iShares Core S&P 500

IE00B5BMR087

Cost to date 0.07% CSIF US – Pension Fund

CH0030849712

Costs new 0.00% UBS ETF MSCI USA SRI

LU0629460089

Cost to date 0.28% CSIF US ESG – Pension Fund

CH0397628709

Costs new 0.04% CSIF World ex CH

CH0032400670

Cost to date 0.05% CSIF World ex CH – Pension Fund

CH0032400639

Costs new 0.00% CSIF World ex CH hedged

CH0303759390

Cost to date 0.05% CSIF World ex CH hedged – Pension Fund

CH0198191493

Costs new 0.00% CSIF World ex CH Small Cap

CH0233387429

Cost to date 0.09% CSIF World ex CH Small Cap – Pension Fund

CH0214967314

Costs new 0.09% CSIF World ex CH Small Cap hedged

CH0233387494

Cost to date 0.09% CSIF World ex CH Small Cap hedged – Pension Fund

CH0214968353

Costs new 0.09%

Real estate building blocks: