Opinions on Swisscanto Index Funds

Investing / Others
1

Hi Again

What are your opinions on Swisscanto Index Funds? The marketing brochure (of course :wink: ) contains many arguments that sound legitimate. For example: I personally really don’t need inter-day trading. What are they not saying in their document? :slight_smile:

Also there seem to be a number of funds based on Indexes that are not available as ETFs (e.g. MSCI World ex Switzerland). Which could be useful if you want to balance out your 3a home bias.

Would love to hear your comments.

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2

Had a quick look at it, and have to say, it’s the first time I see reasonable traditional index tracking funds/non-ETFs.

Comparing the SPI one (CH0315622990) to a standard iShares ETF (CH0237935652) they are nearly identical. Of course TER is still higher (0.19% vs 0.10%), but at least not appaling, and given the stamp duty only applies to the ETF, you really only have an advantage with the ETF long-term.

Considering liquidity and primary vs secondary market pricing, I see why someone could prefer those.

MSCI World ex Switzerland is offered by multiple 3a solutions, e.g. VIAC. However due to regulation, it would not be allowed to fully invest 3a into such an ETF (100% foreign).

3

Well, I had a quick look at their KID and it looks like they charge a load fee of 5%. :roll_eyes: https://products.swisscanto.com/products/documents/fundDetail/CH0115514645/FSD_CH0115514645_SWC_CH_en.pdf

4

:astonished: I don’t see anything in that regard in the KIID linked by you - where do you read that exactly? I only see a 0.08% issue fee mentioned!

5

Wrong link I posted the fact sheet not the KIID
https://products.swisscanto.com/products/documents/kiids/CH0115514645/KIID_CH0115514645_CH_EN.pdf

I got them from here
https://products.swisscanto.com/products/en/Produkte/Fonds-fuer-private-Anlage/Equities/CH0115514645

6

Found it - thanks! It is stated as potential maximum fee of 5%. All other documents (factsheet, last year’s report) are specifically stating issuance fee with 0.08%.

A 1% upfront fee for an actively managed fund would not suprize me, but 5% for a index tracking fund would be ridiculous. In other words: I trust the factsheet (also based on my own experience).

Are you sure anything close to 5% would apply?

7

Some mutual funds are indeed interesting. The main issue I see is: which “no custody/cheap” broker sells you these. Asked that question few days ago here.

8

I expect that this fee may apply in case of forced liquidation of the found (in the event the bank would go broke for example). The the liquidator of the society could charge 5% on the found. This normally never applies as it would discourage any investor. You have similar situation on most ETF.
I see many problems with founds from SwissCanto:

  • Do you know a cheap broker with low custody fees where you can obtain this product? (Yes, Swissquote as I still consider it as cheap for the swiss market)
  • The bank where you can get them may well charge fees when you buy or sell them.
  • They are swiss product but for most of them you have to buy them in local currency (USD, GPB, CAD, AUD,…) and you will loose 1% changing the currency. In the contrary, Vanguard proposes ETF quoted in CHF on the six exchange and you can enter the US market without converting your hardly earned CHF in USD.
  • And after all they are not really swiss products as a lot of them have an isin number starting with LU.
9

ZKB (now owner of Swisscanto) and most (all?) cantonal banks will certainly not be cheap (in fact ZKB will happily take >1% from you for selling those, so the fund might not screw you, but ZKB will inevitably profit one way or another).

If Swissquote is to expensive for you, you might indeed just be out of luck.

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10

Well, it looks like… :thinking:

But then again mutual funds are still an interesting alternative to buying ETFs with a CH broker. Reason being that IIUC for CH mutual funds you dont have to pay stamp duty (2 * 0.075% or 2 * 0.15%). So that discount pays already a couple years of Swissquote’s 0.11% custody.

(Of course IB again being the winner as with them you avoid CH stamp duty as well.)

11

You also have to be aware with swisscanto, they have different shares classes for a similar product. Some share classes are accessible to only limited set of customers. In short. you have access to the shares classes with low TER if you have a contract with a partner of swisscanto. If you do not have a contract then you can access only the funds with higher TER. They belong to the same pot but generate more income for swisscanto.

1 Like
12

The catch with those funds (even if they were particularly good) is that it only makes sense to buy them if you are lazy and buy with your local bank anyway. Then all the expensive depot and trading fees still apply… and they still manage to scam unsuspecting customers.