Leonteq CHF Overnight

Investing / Others
1

Hello!

I am still defining my allocation to fixed income and I discovered the following product: Leonteq CHF Overnight Return Index ETP (ISIN: CH1390861214).

There are almost no information in this forum, nor on the Poor Swiss or Reddit.

What do you know about it? Is it safe to park liquidity there? I’ve read of someone claiming that Leonteq is basically a scam.

Any info appreciated.

Thanks

2

Leonteq is definitely not a scam (doesn’t mean the can’t go belly up) and this ETP looks fairly sensible at a quick glance.

Edit: Maybe the point you heard was that some of their products are scams? I wouldn’t say that either (by definition of what a scam is), but they certainly have products only stupid uninformed people invest into.

3

Who is this “someone”?

Basically, as the name says, it tracks the SARON (Swiss Average Rate Overnight) - 0.10%, because that’s their administration fee. That’s the whole product. But with these low interest rates, it really doesn’t make a lot of sense nowadays.

Here they have all the information and factsheets available:

4

Also fyi wrt to taxation, this is one of the few product which are taxed based on realized capital gain.

(Was discussed in the fixed income thread)

5

nothing to do with this, though.

2 Likes
6

According to Bloomberg this is a money market instrument, charging 0.1%. No info about the market cap.

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Since you indicate you want to park liquidity, why pick this instead of a well established CHF money market fund with a reputable issuer?

Well, Leonteq is the issuer of said security …

Doesn’t mean you’ll lose your money on this if Leonteq goes belly up, but there might be some bumps along the ways.

Here’s a juicier article on the recent FINMA fine: Atom-Einschlag bei Leonteq – Inside Paradeplatz (in German).

7

When I checked into it, it seems actually fairly safe (SIX is the counterparty iirc). Though being taxed on capital gains means you have a fair tax, but that’s more taxes than using an MMF with tax optimized holdings (tax yield below actual yield).

edit: the finma issue is about who they partner with for distribution, not about their ETP setups. (Tho it could hint at judgement lapses which isn’t a great look)