A World Equity Portfolio: Why Two Holdings Beat Seven
September 13, 2026
4 min read
A World Equity Portfolio: Why Two Holdings Beat Seven
What rebalancing actually costs — and why more positions do not mean more diversification.
The short version
- More positions do not mean more diversification. The components hold largely the same companies, just packaged differently.
- Several positions have to be rebalanced. That triggers stamp duty, spread and currency conversion — on every purchase and every sale.
- The order of magnitude is 0.03% to 0.05% a year. Over ten years, a good hundred francs for an activity that produces no additional return.
- With a single globally diversified holding this block disappears entirely. The balance is maintained inside the instrument, where neither Swiss stamp duty nor retail spreads apply.
01Why seven positions are not better than one
Many offerings assemble a world portfolio from four to seven building blocks. It looks careful — more positions, more thought. In reality two things happen.
First: the components hold largely the same companies as one broad world instrument, just in different wrappers. More positions therefore do not automatically create more diversification — the same diversification is simply spread across more lines.
Second, and this is the expensive part: once several positions sit side by side, their weights drift. If North America performs well and Europe poorly, the allocation no longer matches after a year. So it gets rebalanced — sell, buy, restore.
02What rebalancing costs — the calculation
The magnitude can be derived. Assume a multi-position portfolio turns over roughly 5% of its volume each year to restore target weights. That involves selling and buying, so everything applies twice.
| Cost type | Calculation | Effect per year |
|---|---|---|
| Stamp duty | 2 × 5% × 0.15% | 0.015% |
| Bid-ask spread | 2 × 5% × 0.05% | 0.005% |
| Currency conversion | 2 × 5% × 0.10% | 0.01% |
| Total | around 0.03% |
At a higher turnover of 8% the figure rises to nearly 0.05%. Model calculation on the assumptions stated; actual costs depend on provider, amount invested and investor behaviour.
Over ten years that adds up to a good hundred francs on a typical savings plan. Not a dramatic amount — but money spent solely to restore a state that already existed. No additional return, no better diversification, no advantage. Pure friction.
The decisive difference
What matters is not the number of holdings but whether you have to sell to restore the balance. Hold few, broad blocks and keep them in line through incoming contributions, and this block disappears entirely: no sale, no stamp duty, no spread. That is exactly how we do it — two blocks, balanced through contributions. Inside each block the balance between regions and sectors is maintained within the fund anyway, at a level where neither Swiss stamp duty nor retail spreads apply.
03The costs that hit contributions
A point almost always lost in fee comparisons: some costs act on your assets, others on every single contribution. That distinction decides how heavily an item weighs over the years.
On assets: the management fee and product costs. They grow with the portfolio and are the largest block in a long-running savings plan.
On every contribution: the FX surcharge and stamp duty. At a 0.50% surcharge and CHF 200 a month that is roughly CHF 12 a year — every year again, regardless of how large the portfolio has become. For someone saving monthly that is a permanent drag, not a one-off item.
The full breakdown of every cost type, with a provider comparison, is in ETF Savings Plan Comparison Switzerland.
04When several positions do make sense
So the picture stays complete: there are reasons to hold several building blocks deliberately.
If you want to control the emerging markets weight yourself rather than leave it to index weighting. If you want a measured Swiss allocation because you pay your bills in francs. If tax or personal reasons require excluding a particular region.
In all of these the split is a deliberate decision — and rebalancing costs are the price of it. What does not make sense is a split that exists only because more positions look like more care.
05Frequently asked questions
Is one ETF enough for a world portfolio?
For most people, yes. A broad world index holds over a thousand companies across more than twenty countries. Additional building blocks only add something if they represent a deliberate deviation — not if they repackage the same companies.
What does rebalancing really cost?
At roughly 5% annual turnover, about 0.03% a year, made up of stamp duty, spread and currency conversion. At 8% turnover, nearly five. Over ten years that is a good hundred francs on a typical savings plan.
How high is Swiss stamp duty?
The federal transfer stamp duty is 0.15% on foreign securities and 0.075% on Swiss ones. It applies on purchase and sale and is a tax, not a fee — it cannot be avoided, only reduced through fewer transactions.
Why is the FX surcharge particularly awkward for savings plans?
Because it applies to every contribution rather than to assets. It therefore recurs in full every year regardless of portfolio size. Market practice ranges from fully included in the price to half a percent per transaction.
Is the provider with the lowest management fee the cheapest?
Not necessarily. Low management with expensive products ends up higher overall. Management fee and product costs belong together — separately, neither number says anything.
Keep reading
Few blocks. Nothing to sell.
The arvy ETF Savings Plan represents the world equity market with two blocks and keeps them in line through your contributions — 0.39% management plus 0.06% product costs.
This article was written by Thierry Borgeat, co-founder of arvy, and reviewed by Patrick Rissi, CFA, and Florian Jauch, CFA.
Disclaimer: arvy AG is a manager of collective assets authorised by FINMA under Art. 24 CISA. This article is for information purposes only and constitutes neither investment advice nor tax or legal advice. All amounts are indicative and depend on canton, municipality and personal circumstances. Past performance is not a reliable indicator of future results.
