Investing Terms (CH) – Explained
Simple explanations for common investing terms in Switzerland: ETFs, TER, dividends, volatility, asset allocation, rebalancing, stamp duty, withholding tax and more.
- Plain English — quick definitions without finance jargon.
- Swiss context — includes CH-specific tax words you’ll actually see.
- Practical examples — understand what terms mean for your decisions.
Investing gets easier the moment you understand the language. Terms like ETF, TER, accumulating, volatility or asset allocation sound complex — but most have simple meanings. This glossary explains the most common investing terms Swiss beginners see when opening a brokerage account or reading ETF factsheets.
Tip: Use this page as a reference. When you read an investing article and hit a word you don’t understand, jump back here. The goal is not memorizing everything — it’s building confidence step by step.
1. Core investing basics (must-know)
Stock (share)
A stock is a small piece of ownership in a company. If the company grows and becomes more valuable, the stock price can rise. Some stocks also pay dividends.
Bond
A bond is basically a loan you give to a government or a company. In return, you receive interest. Bonds are often less volatile than stocks, but they can still lose value.
Index
An index is a list of securities that represents a market or a part of the market. Examples: MSCI World (global developed markets) or S&P 500 (500 large US companies).
2. ETFs & funds (how they work)
ETF (Exchange-Traded Fund)
An ETF is a fund traded on the stock exchange, just like a stock. It usually holds many companies and often tracks an index. ETFs are popular because they offer diversification with low effort.
Fund (mutual fund)
A fund pools money from many investors and invests it according to a strategy. Mutual funds typically trade once per day (not like ETFs), and fees can be higher.
Accumulating vs distributing
Distributing ETFs pay dividends out to your account. Accumulating ETFs reinvest dividends inside the fund. Both approaches can work — choose what fits your goals and preferences.
Replication (physical vs synthetic)
Physical replication means the ETF buys the actual securities in the index. Synthetic replication means the ETF uses contracts (swaps) to match index performance. Synthetic can be efficient but adds counterparty risk.
Related: Accumulating vs Distributing ETFs (CH) and Best ETFs for Switzerland.
3. Risk & performance terms
Volatility
Volatility is how much an investment price moves up and down. Higher volatility means bigger swings (and often more stress).
Drawdown
A drawdown is a drop from a peak to a low point (e.g., your portfolio falls from 100,000 CHF to 75,000 CHF = -25% drawdown).
Return
Return is the gain or loss over a period, including price changes and dividends.
Dividend
A dividend is a cash payment a company (or fund) makes to investors. Dividends can be reinvested (manually or via accumulating ETFs).
Risk premium
The risk premium is the extra expected return you demand for taking risk (e.g., stocks vs a savings account). In simple terms: higher long-term returns usually require higher short-term volatility.
Related: Investment Risk Levels (CH) – Explained.
4. Portfolio strategy terms
Portfolio
Your portfolio is the mix of investments you hold (ETFs, stocks, bonds, cash, etc.).
Asset allocation
Asset allocation is how you split your portfolio across asset classes (e.g., 80% stocks / 20% bonds). It’s one of the biggest drivers of long-term outcomes.
Diversification
Diversification means spreading your money across many investments so one “bad apple” doesn’t ruin your plan. Global ETFs are a popular diversification tool.
Rebalancing
Rebalancing is bringing your portfolio back to its target allocation after markets move. Example: if stocks rise, your portfolio becomes riskier — rebalancing helps you stay on plan.
Core-satellite
A core-satellite strategy uses a simple ETF “core” (most of the portfolio) plus a smaller “satellite” (e.g., a few individual stocks or themes).
Related: Asset Allocation (CH) – Guide and Portfolio Rebalancing (CH) – How To.
5. Costs & fees (Switzerland)
TER (Total Expense Ratio)
TER is the annual fee inside an ETF or fund. It’s automatically deducted from the fund’s value. Lower TER is generally better (all else equal).
Trading fee
A trading fee is what your broker charges when you buy or sell. Some brokers have fixed fees, others charge a percentage.
Custody fee
A custody fee (or account fee) is a fee some brokers charge for holding your securities. Not all brokers charge it.
FX fee (currency conversion fee)
FX fees occur when you buy assets in USD/EUR while your account is funded in CHF. FX costs can be a big hidden cost for Swiss investors.
Related: ETF Fees & TER (CH) – Explained, FX Fees (CH) – Broker Comparison, Custody Fees Switzerland.
6. Taxes & Switzerland-specific terms
Stamp duty (Stempelsteuer)
Swiss stamp duty is a transaction tax that can apply when trading securities through Swiss securities dealers. Whether you pay it depends on your broker setup and the security.
Withholding tax (Verrechnungssteuer)
Verrechnungssteuer is a Swiss withholding tax often connected to certain income payments. In practice, investors want to understand when tax is withheld and how reclaiming works.
Wealth tax
Wealth tax is a cantonal/communal tax on your net assets. Both ETFs and stocks count as taxable assets. Rates vary by canton.
Capital gains
Capital gains are profits from selling an investment for more than you paid. Switzerland is known for generally favorable treatment for many private investors, but “professional trading” criteria can change the situation.
Related: Swiss Stamp Duty (CH) – Explained, Verrechnungssteuer (CH) – Explained, Wealth Tax Switzerland – Explained, Capital Gains Tax Switzerland.
7. Practical “investing actions” (what you actually do)
Buy / sell
A buy order purchases an investment. A sell order sells it. The key is to avoid unnecessary trades.
Limit order vs market order
A market order buys/sells immediately at the current price. A limit order sets the maximum price you’re willing to pay (or minimum you’re willing to accept). Many investors prefer limit orders for better control.
Dollar-cost averaging (DCA)
DCA means investing a fixed amount regularly (e.g., monthly). This reduces “timing stress” and supports long-term habits.
ETF savings plan
An ETF savings plan is a structured monthly purchase of ETFs. It helps you stay consistent without constant decision-making.
- Pick a simple ETF portfolio.
- Automate monthly investing.
- Rebalance once per year.
Related: Start Investing (CH) – Step-by-Step and ETF Savings Plan Switzerland.
8. FAQ: investing terms Switzerland
What are the most important investing terms to learn first?
Start with: ETF, index, diversification, asset allocation, volatility, TER, FX fees, dividends, and rebalancing. These terms cover most beginner decisions in Switzerland.
What does TER mean in ETFs?
TER is the annual fee inside an ETF. It’s deducted automatically from the fund’s value. Lower TER usually helps long-term returns.
Do I need to understand every term before investing?
No. Start simple, invest consistently, and learn as you go. But understanding the basics helps you avoid common mistakes.
What is the difference between accumulating and distributing ETFs?
Distributing ETFs pay dividends out to you. Accumulating ETFs reinvest dividends inside the fund. Both can be good — choose what fits your goals.
Turn investing knowledge into a simple plan
Understanding terms is step one. Step two is consistency. BudgetHub helps you set investing goals, plan monthly contributions, and keep your finances on track — so wealth building in Switzerland becomes a system.
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