So 0.48 total TER but with a maximum of 95% stocks, so pretty much the same as VIAC if you are 100% stocks. I wonder what their FX rates are.
95% invested is passive.
95% instead of 97% stocks will reduce longterm returns by 0.15%.
In fact, 95% is in equities, 2.5 % is real estate and 2.5% in commodities. The fund itself is fully invested. However, i don’t know how much money is invested each time in the fund.
This is frankly’s all-in fee.
Swisscanto (CH) Vorsorge Fonds 95 Passiv VT CHF is described as a “fund of funds” - are there any further costs “hidden” in the target funds?
So a quick comparison between both.
I will compare the global Global 100 from VIAC and the Extreme 95 index from Frankly:
Frankly offers 8 funds (3 active and 5 passive). Only 1 can be chosen at the time unless you have multiple 3a accounts. The funds are not transparent as we don’t the indexes they are using.
Viac offers more than 20 funds that can be mixed and offers prepared strategies like Global 100, ect. The funds are transparent
Frankly invests every day of the week
VIAC invests only once in a month
Frankly has 0.48% all-fee (the currency fees are inside the fund so I would assume lower than 0.75% from VIAC). Based on the factsheet, it is not a fund of funds.
Subscription fees: 0.10% and Redemption fees 0.09%
Viac has a 0.51% all-fee + currency fees.
Subscription fees: 0.08 Redemption fees: 0.03% (numbers from: CSIF (CH) III Equity World ex CH - Pension Fund)
Diversification and long term returns
Frankly has 30% of Swiss equities, but 70% of the total fund is in CHF. 60% of foreign stocks are hedged. 100% of the money can be invested.
Viac has 37% of Swiss equities. There is no hedging. 97% of the money in the account is invested.
Based on the literature the hedging has an important impact on long term returns and wouldn’t be recommended.
Frankly offers support by phone, email and social media.
VIAC offers support by phone, email and online chat.
If Frankly is hedging 70% to CHF then it’s a big negative long-term performance impact.
Sorry, I wasn’t clear. 70% is in CHF, but this also included Swiss stocks.
Around 60% of foreign stock are hedged, which like you and I said has a big impact on returns
Thanks for the comparison.
Where did you get this information from? Could not find it on the website/faq.
It’s an assumption on the parameters it’s written automatic invest as soon as the money is deposited.
But right, it’s written nowhere.
“At least 51% of the fund’s assets are invested indirectly via target funds based on the fund-of-funds principle”
Am I missing something?
EDIT: Link corrected to VT units, but same wording
If I understand correctly, it is NT not VT that is used by frankly.
I agree. But my girlfriend is using VIAC 100%, so I am considering to have some of my 3a with frankly. The reasoning is just to never have everything in one basket. What do you think? You can call me stupid if you want.
I don’t get their response. How should one ensure to have the sufficient account balance when everything is invested in the automated investment mode (can be chosen in the app).
Yes, NT is the correct share class. After checking again, it seems to be a fund of a fund, but the current structure has no impact on the fee.
It seems, they are using:
- Swisscanto (CH) IPF III Index Equity Fund MSCI® World ex Switzerland NTH CHF
- Swisscanto (CH) IPF III Index Equity Fund MSCI® World ex Switzerland NT USD
I agree with not all the same eggs in the basket, but 3a is quite secured.
There answer is not clear, I would assume they sell to have liquidity for the fees.
Yes, hedging will have a big impact
Agreed - based on the research above as well as frankly’s website, VIAC still seems to be #1 choice.
One aspect which I believe has not been discussed is the fact that Frankly charges 0.48% on the total amount of assets. If you for some reason choose to only invest 50% in a fund, then, well, the fee is still on the other 50% cash too (aka negatives rates). That’s a huge limitation. You can really only be 100% invested in Frankly, holding cash would be very expensive.
I maintain it is the VT units:
- Its IBAN CH0496470938 is part of the link on frankly’s investment products page, please also refer to the screenshot below.
- Swisscanto’s detailed sales prospectus states as such: “Anteile der Anteilsklasse VT CHF sind thesaurierende Anteile, bei denen die Beteiligung den folgenden Institutionen der beruflichen Vorsorge (2. Säule) und der gebundenen individuellen Vorsorge 3a vorbehalten ist”
PS: OK, the web site does give conflicting information, according to language version:
Seems frankly a bit amateurish, for a supervised financial product by one of Switzerland’s most reputable and largest cantonal bank (pun intended), after all that pre-launch hype they tried to create.
Also, the fact that “portfolio” data is unavailable for the funds on Swisscanto’s web site doesn’t inspire much confidence in me.
PPS: Ignore the first part of this post. They must have quietly changed in on their web site, and the German version might still have been in my browser cache, indicating the NT units. However as of right now they are linking two different fund units (NT and VT) on their german version:
“Details aufrufen” is still linking to NT units as I’m writing this:
…whereas the text link in the preceding paragraph links to VT units.
Okay, it’s a mess then. Inside the App if I check the account details it says NT as well.
NT would also correspond to what they write in their FAQ:
Is the administrative fee and the TER (Total Expense Ratio) of the funds available in frankly 0.0%?
The administrative fee is included in the all-in fee and is therefore 0.0%. The frankly investment products may also invest in Swiss real estate funds for income reasons. These exchange-traded funds in turn affect the TER. This means that the 0% cost funds used by frankly can also have a TER between 0.01% and 0.03%. In order to avoid charging you twice, we set the all-in fee lower accordingly from the outset. We promise to review the TER of real estate funds annually.
It’s the same for (for example) Moderate 45 Active:
Sure, their wording of the “investment product” “being based on” the RT/VT unit class fund doesn’t mean that’s exactly what I’ll be getting (which might in fact be NT). But frankly, I might be too lazy to inquire further. Just tell me straightforward what fonds my funds are going to be invested in.
The past performances of the NT class are the same as the VT + fees. At the end, it’s always the same fund. The classes are just created to apply different models of fees between the customers (individual, pension funds, institutionnal, ect).
Their answer seems quite weird. Because the fund hold 2.5% of “ZKB Gold ETF AAH CHF” with a TER of 0.40%. So technically, you will pay twice the fees.