Swiss government bond funds

I was recently looking into ways to invest in Swiss government bonds (should interests rise to a point where they become interesting) and started to look for any ETF or index funds.

I was surprised to see that only iShares seems to have such ETF, for example CH0102530786 for those with a time to maturity of 1-3 years.

Am I missing something or is demand so low that nobody else cares to launch such a fund?

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Yeah, why pay a management fee for a negative yielding asset (in an expensive currency) that holds 2 bonds?

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I dont know.

If you are open for some hedged international bond etfs, check this out:

There is also an intersting bond calculator, where you can play around with different interest rate scenarios and time periods.

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Guess they are just not so much in demand because most people are long term investors and for long term investors bonds are actually more risky than stocks.

I think bonds make sense if you have a short investment horizon or if you psychologically have troubles dealing with volatility, but other than that?

Anyway, if you just want Swiss government bonds, why not investing into bonds directly? In the end, they are all from the Swiss government so an ETF is not really needed (you just pay unnecessary management fees).

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UBS had virtually identical bond ETFs as iShares (same index, same TER), however, they were liquidated in 2019. UBS now offers a SBI ESG AAA-BBB ETF (CH0118923892), which includes government bonds but also corporate bonds.

Credit Suisse offers a CSIF Bond Switzerland AAA-AA mutual index fund. Also covers more than just government bonds, however, given the rating range, it should be safe enough for the stable portion of your portfolio (when the prime rate is positive again). This index fund is also available at Viac for pillar 3a.

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Bond ETFs provide duration management and you can benefit from roll-down return. If @Neville wants to hold gov bonds to maturity, sure, buying them directly is an option, however, manual duration management may not be feasible for private investors. If I remember correctly, a single bond typically has a high price (possibly CHF 10k), though, and broker fees may be higher than for ETFs.

I was checking Swiss bonds like one year ago. Yes, there are iShares ETFs if you want. But in total I found 24 bonds (now 23) from the Confederation and 149 from cantons and cities. The latter are often very illiquid.

Industry sector: Countries
Country: Switzerland

5k is typical, but could be also as high as 100k.

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Meanwhile, 10 years Swiss confederation bonds have a positive yield to maturity again.

There are only between 2 and 3 distinct Swiss government bonds with a maturity between 1 and 3 years because there is only one per year.

It is probably not worth the trouble of building an ETF for so few positions, I guess.

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How do you buy Swiss government bonds directly? I can’t find them in IBKR’s bond search tool, and moneyland warns about high trading/custody fees by Swiss brokers.
I’m not necessarily interested to buy at this point, just curious. Anybody has first hand experience?

I think most Swiss banks and brokers have them. But yes, the fees are high and it only makes sense if you want to buy larger quantities, like 10’000 CHF per transaction.

For the rest of us ETFs are cheaper. I think if you look for a bit higher duration like 1-5 or 3-7 (that’s reasonable too) there could be more ETFs.

The real danger with bonds is for durations 10 and more. A duration of 5 years doesn’t fluctuate that much in the medium term.

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Commission at Swissquote (+ 0.075% stamp duty + about CHF 4 exchange fee):

You can apparently trade Swiss gov bonds (EIDG) in increments of CHF 1’000 (nominal value). I don’t have any first hand experience, though.

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They are listed at SIX like any other security. So if you have a “direct” access to SIX, like with any Swiss broker, you can buy them. I was buying some swiss bonds (not governmental) in E-trading.

I can’t do it now because IB is not working but you can try to search by ticker, like E161.

With Degiro.ch you are not trading at the exchange directly, but with a market maker, so not everything is available.

That one must be for (mostly American?) OTC-traded bonds.

And, if you want to buy bonds and hold until maturity, think about Kassenobligationen.

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Found swiss bonds at Flatex (Tradegate Bonds). However considering that flatex operates only in EUR (or at least I think so), the question about costs remains open.