I would rather be cautious. Either there is an error or the share class just started or something else. In any case, there could be some bad surprises.
Yeah itâs pretty recent (but thereâs already been a full year, the report is published in Sept so technically they should have the data).
(I also think itâs a mistake that it has no taxable yield)
Did anyone do it yet?
Yes. I was thinking about it.
How is it possible to have zero income.
Iâm fairly sure they should report some income, thatâs why itâs likely an error/mistake 
The interest rates are falling in most banks, and I am not very keen to open new bank accounts for interest shopping purposes. I am thinking of investing in the following money market fund (after the dividend is paid in few weeks)
Just wanted to ask if I am overlooking something. Following is my understanding.
- I should expect yields matching SNB interest rates minus TER Costs (0.15%)
- The fund invests mainly in A rated bonds or higher , so i am expecting it to be fairly secure
- Since it a fund, I wont have stamp duties
- Con vs savings account -: These funds would not be covered under eSuisse guarantee
- Pro vs savings account -: I can deduct 0.3% management fees from taxable income.
I have read multiple times on the forum that MM funds have some sort of risk. What kind of risk are we talking about exactly? I did not capture it completely.
I use the pictet MM fund. For the same reasons you mention.
Was the best of its kind for my needs.
I see it as an advantage that its not with a bank, as the assets are seggregated from the balance sheet. Hence i think its âsaferâ.
I wasnt aware of that?
FYI make sure to look into the tax aspect, especially with low yields small differences in tax treatment can lower the returns a lot.
edit: for example ICTax - Income & Capital Taxes has ~2% taxable return
Thatâs only for some cantons (e.g. Zurich allows up to 0.3% of securities to be deducted without proof, with some max at 6k total)
Yeah i use the flat fee. Thought this would be some specific for (MM) funds
Flat fee in ZH is only allowed for securities and hence money in Fixed deposits, savings accounts cannot be included.
However, MM fund is a security, so it would be included. I only wanted to mention this as a pro vs. savings account
3 Likes
Yeah this is something I am still thinking about. I am still not sure how the coupon payment for this fund exceeded the yield for 2023. I will be curious to see what happens in 2024.
I think it happened in 2023 because yield was going up during the year and bond prices fell.
Genuine question: I have looked at that exact fund but other than not leaving money on the table, it looks to me like itâs almost immaterial. If I were to use it Iâd put say 10k, to getâŠ100CHF/yearâŠ?
Whatâs the motivation besides having 10k sitting at 0.5-0.6%?
1 Like
Not very high motivation. It is more about experimentation. I never invested in MMF for the same reason (motivation :))
1 Like
I entered with a larger amount when the central banks started hiking and stayed as they said rates will be âhigher for longerâ.
I wanted to reduce duration on the safe part of my portfolio.
But yeah, at below 1% and to park for a very short time and small amounts, it doeant make much sense. You also pay trading fees to enter/exitâŠ
1 Like
Yeah donât think itâs worth it for 10k, for me itâs more for the fixed income/wealth preservation part of my portfolio (along with pillar2), so the amount is bigger.
1 Like
And what about using it for emergency fund cash (instead of hunting for bank accounts)? Too risky for that purpose?
Depending on the size of the emergency fund, in my opinion. If the MMF gives ~1%, actually 0.85% after TER, and a standard account gives 0.6% the difference in 10k invested is literally 2 beers and a bag of peanuts. So peanuts and piss, itâs really not worth my trouble, somebody else might want to hyperoptimize.
For the situations described by the members above with bigger cash piles it can make sense.
3 Likes
I think we should consider MMF as part of asset allocation for fixed income (savings accounts, medium term notes, Swiss bonds and MMF).
Unfortunately we are slowly moving into environments where most investments wonât return much interest.
Fixed income
Swiss 10 yr bond yield -: 0.38%
Interest on savings accounts -: approx 0.6-0.7% (will continue to fall)
MMF -: 0.85% (will continue to fall)
Real estate
Direct Real estate funds -: 2% (but with very high valuation of underlying assets i.e 50 times cash flow)
Looks like we are going to have TINA factor again (there is no alternative) for Stocks. So it really depends how much is Fixed income allocation for the investor.
3 Likes
Do you mean that in 2023, the best approach was to keep the fund and receive the coupon payment (and pay taxes)?
I thought it was better to sell before receiving the interest because itâs taxed, while capital gains are not in Switzerland. Iâm wondering, because as a newbie to investing, I donât know if withdrawing my capital gains in 2024 now for this fund is better than receiving the interest.
I am not saying that.
I am just saying that last year, it seems that because ETF prices went down, the effective yield was lower than coupon payment. So from tax perspective, investor would have paid tax on 2% while the effective yield was less than that.
Effective yield = function (coupon payment, capital gains, time)
For CH investors , its better if coupon payment was lower than effective yield. But you cannot always plan such things. In long term it should average out.
However, if I were to buy fund (CH0011292312) today at 872 CHF, in November, there would be a dividend payment which will reduce the NAV. Let`s say it was 12 CHF, NAV would go down to 860 CHF. I would pay tax for 12 CHF but I didnât really gain 12 CHF. So it would be better to buy post dividend.
1 Like