The benchmark for fixed income is going to be the risk free rate, aka SNB rates: Swiss National Bank (SNB) - Current interest rates and exchange rates ( currently ~1.75%). Anything higher than that will mean some risk is incurred (e.g. interest rate risk, the value of the holding will go down if interest rates go up and vice versa, or default risk esp. for corporate bonds).
While risk free rate was negative, the clear winner were cash accounts at Swiss banks (since many of them did not apply negative interest rates), but since late 2022 the landscape has change.
A small overview of the various options, with numbers as of July 2023 (for funds it’s May). Sorting is approximately in the order of increasing duration / flexibility / variability of returns.
This is a summary! Please discuss specific instruments in linked threads!!!
Savings account / Sparkonto
- Savings Account Comparison Switzerland - moneyland.ch
- Yield up to ~ 1.5% for standard accounts
- Yield up to ~ 1.8% for special offers
- The rate can be adjusted by the bank at any moment, typically by the beginning of the next month.
- Liquidity constraints, usually 1-12 months notice above some amount
- 100k covered by esisuisse
- Tied to a given bank
Money market funds / Geldmarktfonds
- Short duration, typically low risk (but some issuers temporarily struggled during the Great Financial Crisis in 2008)
- Market yield roughly following SNB rates
- Very liquid, takes a few days to cash out
- No ETFs exist, only mutual funds are available
- UBS, share class P is for private investors (0.28% TER, 1.31% YTM)
- CS, share class B is for private investors (0.075% mgmt fee, 1.18% YTM, 73 days avg duration)
- ZKB (LU) (0.11% TER, 1.71% YTM)
- ZKB (CH) (higher risk, 0.10% TER, 1.72% YTM)
- Pictet LU (short term, 15 days average maturity, 0.12% mgmt fee, net yield 1.13% as of 2023-04-28)
Short-term fixed deposits / Festgeld
- Banks with rates online: MB / NKB / SQ
- Term 1-12 months (fixed, i.e. liquidity risk)
- usually starts at 100k
- Yield up to ~ 1.2%-1.7% (depending on duration), fixed at the start
- 100k covered by esisuisse
- Tied to a given bank
Medium-term notes / Kassenobligationen
- Medium-Term Note Comparison - moneyland.ch
- Term 2-10 years (fixed, i.e. liquidity risk)
- Yield up to ~ 2%-2.75% (depending on duration), fixed at the start
- 100k covered by esisuisse
- Tied to a given bank
Individual bonds / Obligationen (oder Anleihen)
- Can have various ratings/duration
- Yield is fixed at start if held to maturity or variable if sold before maturity
- Best ratings mostly for Swiss Government Bonds
- One option is to build a bond ladder
Swiss Pfandbriefe
- Issued only by Pfandbriefbank and Pfandbriefzentrale
- Repackaged mortgages, very high quality (not comparable to common mortgage backed securities)
- Can be bought directly with a given duration
- Often included in CH bond funds
- Traded on stocks exchange
Bond funds
- ETFs: Various duration, and ratings, exposed to interest rate risk
- Global hedged (real YTM hard to assess due to hedging, should be similar to equivalent rating/duration swiss bond funds)
- Swiss corporate
- Swiss (all)
- CHESG (0.15% TER, 1.77% YTM, 7.01y duration)
- Confederation bond ETFs
- Mutual index funds
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E.g. VGSTICH (0.15% TER, avg duration 2.7y)
- Most likely out of reach due to minimum investments
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Available at finpension and/or VIAC (institutional share class with 0% TER) and Swissquote (retail share class)
- CSIF (CH) Bond Switzerland AAA-AA Blue FB (0.15% TER, 7.49y, 1.76% YTM)
- CSIF (CH) Bond Switzerland AAA-BBB 1-5 Blue FB (0.16% TER, 2.84y, 1.96% YTM)
- Swisscanto (CH) Index Bond Fund Total Market AAA-BBB 1-5 CHF FA CHF (0.16% TER, same index)
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Trading and fees
Bonds (including Pfandbriefe) and Bond ETFs can be traded like every other assets. Best is to use ISIN due to often non-descript names.
For Swissquote, trading fees for bonds all-in (including stamp duty) are around 0.5% at low five-digit amounts and 0.3% for 100k. For bond ETFs all-in its around 0.3% at low-five digit amounts and 0.1% for 100k. Spreads are not necessarily transparent, but at SIX all listed assets should have market makers ensuring reasonable pricing.
Further related threads about specific instruments: