I’m new to finance and recently started investing with funds at BCGE. I have some investment funds for my family and kids, and I invest every month. Since I didn’t know much about ETFs or stocks at the beginning, I chose BCGE Synchrony funds because they felt like a safer option for me.
Now, I have opened a broker account and taken some courses to understand stocks and ETFs better. Looking at my funds, I feel like the fees are quite high.
What do you think? Should I invest more in ETFs or have a mix of both?
Most likely not “passive” (or being “passive” under the guise of an active-level fee; performing equal to or worse than an indexed alternative).
Your intuition is right - you should probably drop those and take an indexed (e.g. all-world ETF) approach at a broker of your choice, and cut your fees by 5-10x (and most likely have better long-term performance than those “active” funds).
Unless you possess a rare set of stock-picking skills, that is (which judging by your intro is not yet the case).
I would invest in active fund only if they are able to outperform their benchmark year over year net of fees.
If not, I buy ETF capturing the benchmark I’d like to invest in.
Last time I have checked the content of Synchrony funds they were made from other BCGE funds.
So you had 2 layers of fees in your 3A.
I could not find the top 10 positions of these funds. Could you provide the documents to investigate their allocation?
Only if by “safer” you mean “more expensive and worse performant (after fees at least)” than the passive/broad index approach.
For pretty much the same composition you can simply buy the UBS’s SPI ETF for 0.10 TER at your broker of choice (or SMI for 0.20% if you feel more concentrating).
I would advise though to consider looking beyond CH market only, and broaden your funds to the rest of the world (US, developed ex-US, emerging).
At least these funds detained shares directly and not via other funds.
Their management fee seems 10x higher than etf. So you need to compare performances with a SMI etf
Actually, the fees from the Synchrony are high and the only advantage to use this is, in combination to other services from BCGE (e.g. residency loan, acquisition of BCGE shares…) in order to benefit from a guaranteed remuneration of 1.0-1.5% up to 100-150k on your savings account. With a good combination, you can thus mitigate the fees of the Synchrony by the remuneration of your savings account. That being said, it becomes more or less “neutral” so not really advantageous.
After 1-2 years, I have personnally stopped this setup and is now managing myself directly. YOu can do this via ETF acquisition on a brokering platform or via wealth-management options such as the newly created VIAC INVEST for example (may be a good alternative if you wish to keep a lazy / low fee approach)
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