Is a cheaper ETF worth losing tax-free fund transfers?
In Spain, moving money between index mutual funds isn't taxed; selling an ETF or a cryptocurrency to switch positions is, every time. Simulate how much that difference is worth.
Index funds (transferable)
Final net value
€148,165
Total tax paid
€9,025
ETFs or crypto (not transferable)
Final net value
€135,139
Total tax paid
€16,237
Advantage of tax-free transfers
€13,026
With these parameters, keeping the money in index funds and transferring without selling leaves you €13,026 more at the end, purely from deferring tax until the actual sale.
Net wealth at each rebalancing point
Frequently asked questions
What is fund-to-fund transferability ("traspaso")?+
In Spain, moving your money from one index mutual fund to another (a "traspaso") is not a taxable event: no capital gains tax is due until you finally redeem into cash. ETFs and cryptocurrencies do not have this regime — selling one to buy another always triggers tax on the gain.
So does this simulation say ETFs are worse than funds?+
Not in general — only when you rebalance or switch positions often. With these parameters, deferring tax until the final sale is worth roughly €13,026 more. If you buy and hold without switching, the advantage shrinks a lot.
Is this exact, real tax advice?+
No — it is an educational approximation. It applies the Spanish savings-income tax brackets (19–28%) to the gain of each rebalancing event on its own, not to your full-year tax return, and ignores other factors (other capital gains/losses, deductions, currency effects). Talk to a tax advisor for your actual situation.
Does this mean ETFs are a bad choice?+
No. ETFs often have lower fees and broader index coverage. The deferral advantage of funds matters most if you rebalance frequently; if you're a buy-and-hold investor, a low-cost ETF's fee advantage can outweigh it. Compare both factors for your own strategy.
Educational, illustrative simulation: it uses a fixed monthly contribution, no inflation, and applies the Spanish savings-income tax brackets (19-28%) to the gain of each leg separately, not to your actual full-year tax return. Not tax advice — talk to an advisor for your specific case.