I guess so. So that means that tax costs caused by a big investors’ exit are passed on to the remaining investors? They’re basically eating the big investors’ dust?
What capital gains tax should triggered when you sell units of the fund? As it is a CH fund, there are no direct capital gains tax on the sale of fund units. The only capital gains taxes that are triggered are from the sale of the underlying securities from different countries where a capital gains tax exists, for which the indian market is the highest and most significant one.
For indian equities the capital gains taxes upon selling are 15% for short-term (within 12 months after buying) and 10% for long-term (more than 12 months after buying).
The redemption spread for the CS emerging markets fund is so high, because if you sell units of the fund, the asset manager in turn needs to sell indian equities accordingly to keep the share of the different markets aligned with the benchmark index. This sale of indian equities will incur the capital gains taxes I mentioned above. As the indian market performed very well in recent years (market weight was around 6% a few years ago and is now up to 17%), this tax increased heavily. So it is directly related on how the indian markets do, because the have very high capital gains taxes compared to other countries within emerging markets.
No, that’s not true. Exactly the opposite, the redemption spread is in place to assure that all investors are treated the same way. You pay a certain % of spread for the redemption, so the absolute amount you pay is relative to the investment and is to cover the capital gains taxes that you incurred due to holding your share of indian equities through the fund.
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I see. But isn’t there a certain timing problem: Investors getting into the fund after Indian stocks have done well did not participate in the gains, but have to pay the tax bill?
So why isn’t the spread higher for Swisscanto & UBS EM funds too?
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I think this is what I said as well. All capital gains tax is coming from underlying securities but the reason should include rebalancing or forced selling in case there is no buyer at the time of sale of fund units.
So the spread includes both type of costs. Isn’t it?
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Yea, that’s certainly the case. However, I see no feasible way to tackle this otherwise. They’d need to calculate and apply a differing spread for each individual investor, that would be an absolute nightmare operationally and would probably incur lots of administrative costs as well.
Because they handle it differently, they charge the taxes to the fund instead of using the redemption spread, that’s also why they have a higher Tracking Error than the CS fund.
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Very helpful, thanks 
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The turnover from rebalancing is probably negligible for an index fund.
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I see. I think it depends on the exposure though. The mid and small caps funds tend to have large turnovers in India. But if it’s only large caps then most likely it’s small indeed.
But it’s clear
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The CSIF factsheets are now rebranded to UBS if you open them from the app. Hope that’s it and they will not close/merge them with existing UBS funds.
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Hopefully. I wouldn’t really care if they closed them, except of course for the Quality factor fund, which is only available from CS.
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The fund management companies have only been merged a few weeks ago, I’m almost sure that they will close/merge some of the funds for efficiency reasons. But that isn’t necessarily bad, they probably keep the asset managers for the large and/or good performing funds from CS.
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If we look at similar acquisitions (Amundi purchasing Lyxor), they did close the duplicated fund or the one with a low AUM (<100M).
I had some positions that I had to purchase to the new fund and pay the trading cost.
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Additionally to being dead money, the 1% cash at finpension have 0% interest.
No solution is perfect 
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I think there must be a good reason for Finpension to have this free cash. They don’t pay interest because it’s not invested in mortgages or MM funds I believe .
I think it’s needed for operational purposes to manage the portfolio . But not sure
To put things into a prospective. You can be 100% invested in “UBS Vitainvest - Passive 100 Sustainable”, but it holds 1.45% in “UBS (CH) Money Market Fund CHF” and comes with heavy TER + custody fees.
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The fees are 0.0975% (0.39% ÷ 4) per quarter. The cash is used to pay these fees. If all the cash were invested, you’d have to sell shares. And because they are non-exchange-traded funds, when buying or selling you won’t know exactly how much the value of a share will be, so they’ll need some kind of buffer. I guess it’s the best solution they could come up with.
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Still no excuse for not paying interest on our money, no?
Yes something like this might be the reason . I think most funds needs some cash to run operations.
Isn’t interest on all current accounts zero in CH?
As far as I know ZKb, UBS, Swissquote etc
Wherever we get interest , we need to have some duration risk. But FP can’t do that because they need cash all the time.
I think I read an interview or something when someone from finpension mentioned that they are actually having operational difficulties holding all this cash, but can’t do anything about it.