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.
So I went and checked for some of them in the above list. Beware of entry and exit fees. For example LU0120694640 (Vontobel Fund - Swiss Money) has an entry fee of 5.00% and an exit fee of 0.30%. It would take years to even get back to were you were.
If you don’t have multiple millions of net worth, paying around 2.00% for premature termination on a savings account, would probably be cheaper, and give higher returns for comparable availability.
Isn’t that up-to 5%? (it will heavily depend on your bank/broker, with Swiss ones being fairly expensive so that it likely doesn’t make sense for short term holding).
Wow, this is wild. Why doesn’t the national bank give us access to something like T-Bills in the US? At least Swiss residents should be allowed to access them directly, imo.
On a second glance, yes. And there is also some stipulation in their KID about up to 500 CHF entry fee if you exit after 1 year (I don’t get what that’s supposed to mean).
It seems cost isn’t transparent. I didn’t find the actual rates and I can’t read their annual report well enough to calculate it. Not understanding a product is a good reason to keep your hands of.
The annual report in 2022, if someone wants to try:
Thank you so so much for the reply. Regarding this paragraph particularly, I am still quite confused. If the performance 0.2% for four months continues in the rest of the year, the whole year performance is gonna be like 0.6%. This is still very far from number of YTM, like 1.5% - 1.9%. So apparently there is some basic fix-income knowledge I don’t get.
Seeing YTD performance 0.6% and YTM 1.5%, If I invest 100k and expect to exit after a year, should I expect 101.5k or 100.6k? I know in a savings account, I can expect 101.5k. Essentially I am looking for a savings account alternative, hopefully getting similar rates locked for as long as possible (1 year) by doing it myself. Is the thought too naive?
What I don’t get is how a fund-side entry fee can be dependent on the broker. If my money reaches the mutual fund, they need to buy more securities, regardless where it came from. Or is there some broker-side pooling and netting going on?
At the moment, I just want to know if it’s possible to do so, satisfying my curiosity. Learning some instruments. If the answer is yes, I will then start thinking about when and why and why not to do it
Thank you for the reply. I guess the money market fund is not a good alternative to savings account then? I thought the money market fund generates similar yield to a saving account, trading locked interest for a fixed period to flexibility. Is that wrong?
I am not even thinking about fees yet. Just the performance, should I be happy about the one with YTD performance of 0.2%? It’s the best one I found in the list. Or maybe this is a very bad metrics for money market fund as the policy rates are changing? Should I look at annualized last month return? last week return? Is YTM a good metrics evaluating the money market fund?
FYI I’ve ended up using the Pictet LU short term MMF. Mostly because of if its size (billions).
I think it currently yields >1% net of fees while being liquid (can get access to money in a few days). Tho compared to fixed term deposit accounts and similar, this isn’t insured.
It’s a fund, so it is not insured but regulated and, unlike bank accounts and short/medium term notes, the fund’s assets must be segregated from the managing company’s funds. I mean, I don’t think it is more “risky” than a savings account, the “insurance” is just done differently.
By reading and partipating to this forum, you confirm you have read and agree with the disclaimer presented on http://www.mustachianpost.com/
En lisant et participant à ce forum, tu confirmes avoir lu et être d'accord avec l'avis de dégagement de responsabilité présenté sur http://www.mustachianpost.com/fr/
Durch das Lesen und die Teilnahme an diesem Forum bestätigst du, dass du den auf http://www.mustachianpost.com/de/ dargestellten Haftungsausschluss gelesen hast und damit einverstanden bist.
