UBS is terrible with Indexfunds (other than on the Swiss Market). They just don‘t know how to do it and their performance sucks. You need to compare the former CS fund with the Swisscanto one - and pray that UBS learns from CS, because CS was the best Index Fund Provider so far, clearly beating Swisscanto.
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No guarantee, but the American stock market has consistently outperformed the European one by 2 % and Emerging markets have always underperformed.
It might not.
I’ve just done a simple calculation for my own case and the total cost of the mortgage including opportunity cost from being forced into an overpriced 3a.
Assumptions:
Mortgage: CHF 710’000
Interest rate: 0.9 %
Duration: 10 years
Amortization through 3a: 1000 CHF per month
Interest cost over 10 years: 710’000 * 0.9% * 10 = CHF 63’900
Interest cost after tax (30 % marginal tax rate on average): CHF 44’730
Performance over 10 years → Total amount after 10 years (not adjusted for inflation)
Fund 1: 7.45 % → CHF 176’123
Fund 2: 9.45 % → CHF 195’681
Difference in performance: CHF 19’558
Basically, we would have had an equivalent amount of money if the interest rate for the mortage had been 1.3 % instead of 0.9 %.
So, maybe going with a different provider that charges a bit more interest but accepts Finpension as a 3a provider is worth it in many cases.
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Without going into the calculations, why would any bank accept your 3a (for downpayment and /or amortisation) outside its own products?
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They accept 2nd pillar pledges, why wouldn’t they accept an external 3a pledge?
A vested benefits account pledge (which I believe you are referring to - paging @Cortana as that is the only such case I have read about ) is equivalent to the pension fund pledge. Not really a money maker for the bank giving you the mortgage.
But I have never heard or read about an external 3a being accepted as either down payment pledge or for indirect amortisation by any bank. If this is possible indeed, I would love to know more about the providers accepting such a setup.
I’m thinking about just using Swisscanto funds. Then I don’t have to worry about what will happen with UBS/CS funds next year.
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Different countries (FTSE) and higher inclusion of small caps (both ETF).
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Same thinking here… its sad that there is no news from UBS on the CS Index Fund offering. They were the best but looks like they let it die…
Any reason to believe this? Could they simply not rebrand them?
Damn it I just saw that my vested benefits account has this exCS fund. 1.61% redemption spread, wtf. Why is Finpension using such scammy funds?
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@Compounding have you compared the performance to a CHF-ETF or fund on MSCI EM (no IMI), just to exclude that possibility?
Still weird, there can’t ca be such a big difference between IMI or not, or between MSCI and FTSE.
Could it be that the online tools include some possible fees of the funds, which are actually waved on your 3a version of the fund?
Or simply has bad data or time periods for the funds?
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I think we should not get hung up on this number. Because this number varies and changes based on what’s the expected capital gains tax in India that the fund needs to pay when any member redeem their units. So rather than putting it in the NAV, the fund puts it in the redemption spread.
Remember this number is going to be different depending on when the fund started, when the contributions were made, and how much Indian stock market grow over time etc. A fund which is operating for long term, the capital gains tax have also accrued over time. If suddenly there is a 20% crash in India, I think redemption spread would also change.
You put it on NAV or redemption spread is a matter of principle but as long as these numbers get adjusted over time, it cannot be detrimental to investors.
However I have to say , for me personally having NAV adjusted is much better because it gives clear idea of what you are buying into.
BUT - If you think about it carefully, 3a. 1e or VB etc are not meant for buying in and going out every year. If you believe that redemption spread is unfair; If the redeeming members are charged a spread then the remaining members by default get benefit of that. Isn’t it?
And with continuous influx of money coming in, the need to redeem (for rebalancing purposes) would also be low.
For all practical purposes, there is not going to be much difference in large funds who buy MSCI EM companies other than the TER costs. NAV + redemption would take care of each other.
If CS fund was bad, no one will invest in Credit suisse fund. So please let’s give some credit to people who built this fund, buy this fund etc
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I am not defending CS. I just feel the mechanism might not be how we think.
It could be the redemption spread is charged differently to different units depending on when they were bought and redeemed.
You do realize that CS doesn’t earn a single cent on the redemption spread? The spread is credited to the fund, and is there to not dilute the shares of existing investors due to trading costs, capital gains taxes, etc.
And Swisscanto, UBS and the others are more transparent about how they handle indian capital gains taxes? I don’t think so.
ExCS tried all the options there are for handling indian capital gains taxes. Initially they provisioned it in the NAV, then they billed the realized indian capital gains taxes directly to the redeeming investors and now they increased the redemption spread.
Other funds seem not to be influenced; e.g. the big blue pension one. Redemption spread of 0.01%. Same for other funds.
Why the EM especially has a high spread, I dl not know.
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you used the wrong UBS/CS Find. Please use CH0017844686. It is currently not listed in Swissfunddata.
When you compare performance based on Fund Factsheets, you see that the CS Fund performed better than the Swisscanto one.
Overall, the situation is that CS by far was the best fund house for Swiss Index funds. But the question truly is how that will continue. The lack of transparency and communication, the fact that UBS was a terrible Index fund manager and the tendency that UBS just swallows CS culture and knowledge… makes me a bit sceptical. Overall, I mainly sit on the fence but with regard to EM Index Funds, I have already switched to Swisscanto.
The numbers I see are following.
| Total Return performance in CHF | ||||||||
|---|---|---|---|---|---|---|---|---|
| Source UBS Quotes for funds , justETF for ETF, Performance until 30.09.2024 as of different starting points | ||||||||
| from Nov 2014 | from Jan 2015 | from Jan 2016 | from Jan 2017 | from Jan 2018 | from Jan 2019 | from Jan 2020 | from Jan 2021 | |
| UBS | 28.24% | 34.94% | 57.09% | 38.89% | 5.23% | 21.47% | 4.30% | -3.57% |
| SWC | 26.86% | 33.92% | 57.15% | 39.12% | 5.80% | 22.33% | 5.12% | -2.71% |
| EX-CS | 27.73% | 34.40% | 57.16% | 39.15% | 5.75% | 22.40% | 5.47% | -2.52% |
| IEEM ETF | 23.42% | 27.32% | 49.72% | 32.34% | 1.28% | 18.25% | 2.30% | -4.64% |
These are excluding redemption spreads.
Note -: EIMI ETF is not a good comparison because it includes Small caps & at least in India Small caps have completely dominated the returns for last few years. Thus I used the ETF tracking MSCI EM index which is used in all the 3a funds
As we can see the ETF is the worst option of all. Not the best 
We should always look at total return (TR) numbers.
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I am sorry to put even more variables, but the MSCI EM funds have a widely varying tracking difference, as per this site:
“iShares Core MSCI EM IMI UCITS” and “iShares MSCI EM IMI ESG Screened” are somehow the best, independently of the actual index tracked…
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I think the tracking difference for EM funds is related to again India.
It is same issue for FLXI vs. QDV5. Indian capital gains accruals always cause this drama and also every fund does the same.
Yes
CSIF fund is interesting because it is quite large. I think some high level institutions know how this redemption work for them. Anyhow for me , in 3a accounts, i will also use SWC to keep things simple.
For 1e -: not much decision power lies with me, so I hope i never get hit with redemption and many more people redeem before me to compensate