As an alternative to short-term government bond funds, did anyone of you consider a CHF money market fund? For instance, Swisscanto (LU) Money Market Fund Responsible CHF FT is offered at IBKR. I sadly could not find a YTM of the whole fund anywhere, but when looking at the largest positions, their YTM is between 1% and 1.5%. The weighted average maturity is very low with 0.31 yrs, so there is only a small interest rate risk.
However, I am a bit confused about the fees. The sales prospectus mentions a max. agency fee of 2% (which would make the fund very unappealing for short-term investments), IBKR does not mention anything and just shows “NA” for the fees when you try to buy it.
The January fact sheet specifies a yield to maturity of 1.56% for the fund.
As I understand it, a bank or maybe a wealth manager could charge you up to 2%. However, direct brokers usually don’t add such load fees. Based on the IBKR order preview, they charge a fixed CHF 4.95 commission and that’s it.
Unlike other mutual funds, it seems both the Swisscanto and CSIF money market funds also don’t have a spread at the fund level.
It does seem like an interesting option if you want minimal term risk. The fund consists mostly of corporate bonds, though, i.e. there is a credit risk, which is why the YTM is above the prime rate.
Hmm. Isn’t Luxembourg domicile mean that 35% of distributed coupons from Swiss domiciled bonds is lost to non-refundable L1 withholding tax (as per some recent vote)?
Yes, however, it’s an actively managed fund which allows some control over this. From the annual report:
Because coupon payments by domestic borrowers continue to be subject to federal withholding tax, the fund is primarily invested in foreign debt securities and was only able to acquire limited amounts of 0% coupon securities from domestic borrowers for diversification purposes.
For instance could explain the various risk (duration,etc.) in more details or at least at links to external resources. Could also explain why only CHF or CHF hedged bonds are considered
As far as I can tell, IBKR doesn’t seem to offer CH-domiciled mutual funds. However, the linked Swisscanto fund is LU-domiciled and I can at least preview a trade for that fund. I haven’t tried to actually buy it, though. How does the trade fail for you?
The order seems to work (afaict, it’s the first time I try buying a mutual fund), but by the end of the day it’s gone and doesn’t look like anything was executed.
I waited a couple of day in case it was a settlement issue, but no dice. (And just retried but looks like same thing is happening again).
Does anyone knows how much many fees there would be with other brokers? (e.g. postfinance?)
At Swissquote it would be a flat CHF 9 fee for mutual funds of prime partners (which includes Swisscanto and CSIF). When buying foreign mutual funds, there is also a 0.15% stamp duty tax. There is no stamp duty tax for domestic mutual funds or selling foreign mutual funds, though.
At what time did you initiate the order(s)? According to Swissquote the cut-off time is 13:30 (not sure whether other brokers may have slightly different cut-off times). If your order was after the cut-off time with a Good-Til-Date of today, it might have expired.
The 3% is the maximum charge, it’s up to the broker. For typical execution-only online brokers, there should be no such charge. Check the broker trade conditions for details.
It’s available at Swissquote but doesn’t seem to be available at IBKR.
I just did a search on IBKR using the Mutual Fund Scanner
Filters are
Title includes “CHF” (make sense?)
Fund Type: Money Market
Country: Switzerland
And here are the 22 results
My questions are
a) Is the search criteria make sense? Did I miss anything?
b) what does all these share class mean, or how I can find the answer?
b) Any one has invested in any of them, to replace savings account?
c) PERFORMANCE - YTD seems to be around 0.2% for the best ones here, do they make sense? How come savings account can give me 1% - 1.5% interest at the cost of inflexibility?
d) How would you choose among them if you just see the table the first time?
FUND NAME
SYMBOL
FUND FAMILY
FUND TYPE
TRANSACTION FEE
LOAD TYPE
MANAGEMENT FEES
EXPENSE RATIO %
PERFORMANCE - YTD
LIPPER RATING
SHARPE RATIO
GEOGRAPHICAL FOCUS
ESG SCORE
AUM
ISIN
CUSIP
SHARE CLASS
INITIAL INVESTMENT
LO FUNDS (CH)-SHORT-TERM MONEY MARKET M (CHF) INC
N/A
LOMBARD ODIER AM (CH)
Money Market
Yes
N/A
0.12
N/A
0.17
N/A
-0.0491047
Global
N/A
131497800
CH0224283041
022428304
M
0
LO FUNDS - SHORT-TERM MONEY MARKET (CHF) N (CHF) INC
N/A
LOMBARD ODIER FUNDS (EUROPE) (LU)
Money Market
Yes
N/A
0.11
N/A
0.15
N/A
-0.2619481
Global
N/A
4033133.26
LU0995143889
099514388
N
1000000
LO FUNDS - SHORT-TERM MONEY MARKET (CHF) P (CHF) INC B
N/A
LOMBARD ODIER FUNDS (EUROPE) (LU)
Money Market
No
N/A
0.11
N/A
0.11
N/A
-0.4999522
Global
N/A
2983872.69
LU0995143616
099514361
P
3000
LO FUNDS SHORT TERM MONEY MARKET (CHF) M (CHF) ACC
N/A
LOMBARD ODIER FUNDS (EUROPE) (LU)
Money Market
Yes
N/A
0.12
N/A
0.13
N/A
-0.4659314
Global
N/A
70949417.03
LU0995143962
099514396
M
3000
LO FUNDS SHORT TERM MONEY MARKET (CHF) N (CHF) ACC
N/A
LOMBARD ODIER FUNDS (EUROPE) (LU)
Money Market
Yes
N/A
0.11
N/A
0.15
N/A
-0.2613286
Global
N/A
197861086.4
LU0995143707
099514370
N
1000000
LO FUNDS SHORT-TERM MONEY MARKET (CHF) P (CHF) ACC
N/A
LOMBARD ODIER FUNDS (EUROPE) (LU)
Money Market
No
N/A
0.11
N/A
0.11
N/A
-0.5001521
Global
N/A
37098561.3
LU0995143533
099514353
P
3000
NEW CAPITAL FUND LUX CASH A (CHF) ACC
N/A
EFG AM (LU)
Money Market
No
N/A
0.15
N/A
N/A
N/A
N/A
European Region
N/A
N/A
LU0585204893
058520489
A
100
NEW CAPITAL FUND LUX CASH M (CHF) ACC
N/A
EFG AM (LU)
Money Market
Yes
N/A
0.1
N/A
N/A
N/A
N/A
European Region
N/A
N/A
LU1066142883
106614288
M
100
PICTET (CH) ENHANCED LIQUIDITY (CHF) I INC
N/A
PICTET AM (CH)
Money Market
Yes
N/A
0.1
N/A
0.2
N/A
0.4490843
Global
N/A
398299743.01
CH0021732877
002173287
I
1000000
PICTET (CH) ENHANCED LIQUIDITY (CHF) P INC
N/A
PICTET AM (CH)
Money Market
Yes
N/A
0.13
N/A
0.19
N/A
0.302917
Global
N/A
11764160.28
CH0021732604
002173260
P
0
PICTET (CH) SHORT-TERM MONEY MARKET (CHF) P INC
N/A
PICTET AM (CH)
Money Market
Yes
N/A
0.08
N/A
0.21
N/A
0.5407606
Global
N/A
885171701.76
CH0011292312
001129231
P
0
PICTET (CH) SHORT-TERM MONEY MARKET (CHF)I INC
N/A
PICTET AM (CH)
Money Market
Yes
N/A
0.06
N/A
0.21
N/A
0.7089342
Global
N/A
3509702915.93
CH0011292304
001129230
I
0
PICTET F(CH) SOVEREIGN SHORT-TERM MONEY MARKET (CHF) I INC
N/A
PICTET AM (CH)
Money Market
Yes
N/A
0.02
N/A
0.17
N/A
-0.912282
OECD Countries
N/A
158788627.14
CH0038724784
003872478
I
1000000
PICTET F(CH) SOVEREIGN SHORT-TERM MONEY MARKET (CHF) P D
N/A
PICTET AM (CH)
Money Market
Yes
N/A
0.03
N/A
0.16
N/A
-1.009507
OECD Countries
N/A
43457068.85
CH0038724818
003872481
P
0
PICTET SHORT-TERM MONEY MARKET (CHF) I ACC
N/A
PICTET AM (EUROPE) (LU)
Money Market
Yes
N/A
0.05
N/A
0.2
N/A
0.2968874
International
N/A
939798485.44
LU0128499158
L7597H277
I
1000000
PICTET SHORT-TERM MONEY MARKET (CHF) P ACC
N/A
PICTET AM (EUROPE) (LU)
Money Market
Yes
N/A
0.06
N/A
0.2
N/A
0.2398493
International
N/A
235424821.1
LU0128498267
L7597H285
P
0
PICTET SHORT-TERM MONEY MARKET (CHF) P INC
N/A
PICTET AM (EUROPE) (LU)
Money Market
Yes
N/A
0.06
N/A
0.2
N/A
0.239971
International
N/A
33843548.73
LU0128498697
L7597H293
P
0
PICTET SHORT-TERM MONEY MARKET (CHF) R ACC
N/A
PICTET AM (EUROPE) (LU)
Money Market
Yes
N/A
0.09
N/A
0.19
N/A
0.0714629
International
N/A
141849110.25
LU0128499588
L7597H301
R
1000
SWISSCANTO (LU) MONEY MARKET FUND RESPONSIBLE CHF DT (CHF) ACC
N/A
SWISSCANTO AM INTL (LU)
Money Market
Yes
N/A
0.05
N/A
0.21
N/A
-0.1357871
Switzerland
N/A
73950000
LU1481723747
148172374
DT
100
SWISSCANTO (LU) MONEY MARKET FUND RESPONSIBLE CHF FT (CHF) ACC
The only overlap of these four and the table above is ZKB (LU) (0.11% mgmt fee, 1.56% YTM) LU0141249424 so I am now zooming into this one.
Does YTM mean yield to maturity? I didn’t know this metrics exist for money market fund. and I can only find out this value in factsheet from official website but not on IBKR quote details. Is this number static? How is it related to performance, for example YTD performance? And how to tell ZHK(CH) bears more risk than ZKB(LU)? From their underlyings?
The same fund is often sold in different share classes for different types of investors (private investors, institutions, pension funds). The different classes have a different fee structure. You find details in the prospectus (https://www.swissfunddata.ch is helpful for this, usually lists all documents). In practice, the class for private investors will be relevant for most. I’ve seen LO funds where you can get the fund for institutional investors (with 0.01% less fees) if you invest more than 1M or are a private banking customer of them.
Note that YTD performance is year-to-date (first 4 months only), you have to annualise this. While a money market fund has a very small interest rate risk (because of the low average duration), it is not zero and the fund continually marks all holdings to market, the YTD is a combination of yield payouts and these adjustments.
I personally would study the holdings / philosophy (in what does the fund invest) and fee structure. Then, I would choose the cheapest one among the funds that match my risk profile.
Yes, that’s yield to maturity. The number is dynamic and can change every day because for multiple reasons: The value of the underlyings is dynamic and changes, which influences YTM. Moreover, the fund continually has to buy and sell new underlyings (because they expire, people want their money, new people invest, …), which also influences YTM. It is the annualized yield that you would get if the fund held all underlyings to maturity and would not reinvest the proceedings, which of course never happens for a fund. So it is the best approximation for the yield at any moment in time, but not guaranteed.
Yes, a higher YTM should usually imply a higher risk, but it is best to check the underlyings.
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