hello guys. I would like to get your opinion on the following fund from credit Suisse : Credit Suisse (CH) 130/30 Swiss
I know that as mustachians you should disregard a fond with almost 2%TER, but if you start analyzing all numbers, you will see how this fund is basically beating the Swiss market big time for the last 15 years. in the past 5 years It produced on average more than 7% (net performance).
I personally studied much around this and finally went for it. I like very much the concept and the numbers are quite outstanding.
130/30 is a patente strategy by Credit Suisse in which they go 130 % long and 30% short. obviously the key poi there is to correctly guess which company of the spi are going to go well and which ones are going to lose. actively managed by C’s, but at least in the last 15 years, so from inception, it was always doing quite well in average.
no I went through a long search in the fundlab of credit Suisse (by the way, I really suggest it…it is very well done and very much reliable in my opinion), but the mobile doesn’t allow me to enter and get all needed info, that’s why I linked the Morningstar.
btw, I wanted to provoke a bit of discussion and bring some newer idea on top of the classic sp500, world index, spi+sli+smi that we basically can find in almost any page in this blog.
that’s was also to point out that big players not always provide shirt stuff (for sale of clarity…all other 40 or so products I analyzed from credit Suisse were underperforming both Swiss and international market…a scam)
and for letting you know the story, I needed to go several time to cs already mentioning way I clearly wanted to be able finally to get this. for retail (poor) customer like me they just want to seek shirt products with return of 2% and Ter of 1.5%
yes, it is tiny monthly investment I have planned on this. no clue why but I do not necessarily fully trust this cheap online brokers (I am with degiro and work well…but you never know) so I was looking for a (decent) diversification alternative with a solid Swiss bank
The chances for this fund to keep outperforming the market are basically zero. Performance chasing will harm your returns, there is tons of evidence for that.
I truly this comment. It is a bit more advance (sorry for the others, nothing personal) then the calssic “passive vs active”.
I’m with you that there would be many other strategies 130/30 that could beat the market and eventually even the fund itself. On top, if you do backanalysis I’m sure will get to an optimum portfolio allocation (within the given strategy 130/30 on the SPI companies) with much higher return.
On the other hand, what it is also true is the fact that my reference is not the best performing theoretical oprtfolio mentioned above, but it is the SPI.
In this regards, I really like the fee structure: 1% basic fee (I know it is crazy, but bear with it for a second) and 15% performance fee. This one is the only fund I could find in which the fund manager is having a true (economical) interest in making the fund overperform the benchmark
Again guys: i’m not paid by CS or working for them, but I’m simply trying to find alternatives to the common strategy on ETF
BTW 1: I know that there are many CS or other banck employees reading this forum; it would be definitely good to get feedback from a professional
BTW2: I still would like to understand why it took me so much effot/time to have CS people allowing me to go for this option. This makes me thinking they have no interest in selling a good product but they deinitely would like to sell crapy funds that have never beaten the market since their inception. Even not for a single year, not 15 years on a raw in average…
If they manage to “beat” the benchmark by 2% p.a., how much of that extra performance do you see after fees?
P.S. 2% is a big overestimate, given they demonstrate ~20% over-performance over 15 years (which is more of a 1.22% CAGR; 2005-2020). And literally 0 in the first 7ish…
Is it worth the risk (knowing that the statistics work against them)?
You have a true point. Statistic is not in their favor!
For what is my understanding of the fee structure, if they charge 15% on the part beating the market for a maximum of 1% (Max 2% TER - 1% basic fee), this means that they have no interest in beating it more than 1%/0.15=6.6%…I honestly would like to beat the market every year of 6.6%. I would love it!!
About being worthy or not…that’s nice question!
Normally I would expect the opposite behavior: you beat the market in the very beginning (because you are coming from extensive backanalysis so you can somehow extimate well the market in the very beginning), but then with the time you will lose. Here is the way around; in the beginning they were basically copying the market in net income (and that’s already not bad at all) and in the latest 5-7 years they were consistently beating it.
This looks to me like a learning curve: in the very beginning, this strategy 130/30 was brand new and maybe they were not able to profit fully of it, but in the years, they learnt how to use it in their favor. That’s my personal, maybe wrong, interpretation.
A good reading would be:
And btw, risk free rate is now in CH -0.75% and only to 100k CHF coverage…so we should keep this into account…
Looks like the funds does not pay dividends, so accumulates instead.
Does the benchmark for Swiss equities also assume dividends retained and compounded? If not, that would be a big difference as the Swiss index was paying a pretty healthy dividend over that time.
I always question these graphs since I saw one from Julius Baer which was performance before fees! Cheeky monkeys!
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