Hey!
Looking at VIAC default strategies, it seems crédit suisse always outperform swisscanto: VIAC Pillar 3a Investment Strategies - Cost-Effective and Broadly Diversified
Does anyone know what is the main reason?
Thanks!
One significant difference I’ve found is that Swisscanto Large Caps Switzerland tracks the SPI 20, not the SMI. It’s wrong in the VIAC strategy factsheet. The SMI applies a cap of 18% per component, the SPI 20 doesn’t (and there may be further differences in the index composition). This results in Nestlé currently making up 23.5% of the Swisscanto fund and Nestlé has been performing poorly this year.
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Unlike ETF, IndexFunds allow a Fund Provider to use market anomalies. Meaning that an Index Fund can, in search of excessive return, consciously and non-materially deviate from the actual index consitution. Credit Suisse uses this and applies it e.g. on capital increases or changes to index compositions. Meaning that they have strategies what to do with capital increase rights (e.g. when to sell them) and how / when they include new shares into an Index Fund. This way, they manage to slightly beat some of the Indices. This is in the range of 0.05% p.a. or so max. Swisscanto follows a more “plain vanilla” approach and applies less optimizations.
When you have a look at a fund-by-funds view, most CS Index Funds perform a bit better than their Swisscanto or UBS counterparts. The question is what will change here with UBS taking over, as UBS as well follows more the school of what Swisscanto does. In the end, these are all very small details and other than CS’s Emerging Markets Funds (that has hefty exit fees), it doesn’t really matter.
Another component may be that the indices are not always fully the same. You particularely see this on the above example of SMI vs. SPI 20… and you see this even more on sustainable strategies. My pitch would be to not focus too much about this. Just set one strategy and forget it.
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