Looking for opinions on PostFinance investments. A colleague of mine (much more financially savvy than me) recommended a PF investment fund due to their low fees (although the fund seems to be actually managed by UBS, which is my bank). I met with a guy at PF and thought it sounded pretty good, but I still haven't made a final decision. (I've read through previous threads here with mixed reviews about PF but doesn't really answer my question.)
Any opinions about this? Coming up to retirement, and I still have too much money sitting in savings, which I'd like to move (some) into something more secure. I'm very risk-averse, and more interested in securing the capital - as I understand it's not all "guaranteed" sitting in savings - and maybe hedging a bit against lost value, than trying to make a lot of interest.
Thanks. By PF brand name funds, do you mean somthing like PostFinance Fonds 3 (which I was considering)? Again, seems to be managed by UBS. What would be the concern about this?
You say you are risk averse and want to move some money into something more secure. Any fund you decide to move money into is going to carry an element of risk. No risk, no reward. In which, case you are better keeping all of your money where it is.
Look I'm going to be very blunt, neither you nor your friend are particularly financially savvy if you think moving from cash to an investment fund is a secure move. On top of this you say you are coming up to retirement, which means you also need to be very carefully about being over exposed to equites, commodities, property etc.
Your best move would be to go and have a session with an independent financial planner, not a salesperson at a bank or similar institution. It could save you a lot of money in the long run.
Yes! Exactly! Its a tailored product that is costly (i.e. TER cost) in comparison to its low return, like most of PF tailored products. However, there are a few products that they sell which I find interesting. What I do like about PF is that one can join a spar plan with a reduced purchasing commission for as little as 50 CHF a month and management fees for this expensive country are relatively low.
However, like jim2007 said, keep in mind the risks and don't put all your eggs into one basket.
Thanks Jim. Yes I plan to do that, but just wanted to get some opinions here also. I realize there's always an element of risk in investments, but some are riskier than others. And I keep hearing/reading how having more than the "guaranteed" amount in savings is also not secure, or very smart.
I was never much interested in investing, but then I never had much money, until I inherited some a couple of years ago!
You could just transfer part of the sum to another bank for the guarantee thing, but you would pay additional fees so... If it's money you are not planning to spend (or plan to spend slowly over decades) it makes sense to invest at least part of it though.
Thanks Meerkat. Yes I've already moved some into a different bank. And that's my intent - to invest a portion, which is why I was trying to get some opinions on Post Finance, as they seem to have fairly reasonabl fund management fees.
All the more reason to get proper advice. And the guarantee is per bank, so simple spreading the money around over the banks would be an alternative approach.
You may check Bank Cler. I have their Zak account and got appointed to discuss their investment funds which they offered free of commission. It looked very interesting but their funds have total exposure on Switzerland which I didn't like.
Consider the long term performance, ideally since inception (see "performance in CHF"). Since its inception in 1998 the fund increased to 153% from its 100% start value, that's ~1.87% annualised. Add back in the total cost (TER 1.1%, but there's probably more because since 2018 [see the prospectus] the fund lags behind its reference index by 1.3-1.4% annually) rather than the 1.1% its TER may have you expect.
So, its pre-fees performance is around 3.0-3.2%, 2/5 thereof is used to finance the fees, leaving you with the measly 1.87% mentioned above. Me, I'd be outraged and mad, both at the service provider for abusing me and at myself for letting it happen.
IMHO it's never a good idea for the consumer to buy a combined financial product, whether it combines insurance with investing (insurance pillar 3a) or a mix of different asset classes (bonds, stocks, previous metals, commodities). In every case you neeed to assume that the mixing in one pot is used to hide its disadvantages and a big part of the costs. Instead, consider creating the mix (PF3: 70% bonds, 30% stocks) with specialised ultracheap products yourself, and use a discount broker rather than any Swiss bank (Postfinance is no longer discount either).
Say you managed to cut the total cost from PF3's ~1.2% to 0.3% (depending on the requirements th3 0.3% may be a little lower than realistic or trivial to achieve). That would raise your performance from 1.87% to 2.77%, after ten years that's 119.5% vs 130.5% (of course there are no guarantees) or surplus 11k on 100k starting investment.
However, the first question should be how much risk you're willing to take, how much of a drawdown you think you can stomach. What if your stocks dropped 60%? That's what happened to everybody in 2008/09, including PF3, it's just hidden because it's part of the PF3 mix, nonetheless happen it did.
If you are using Postfinance as your main bank, and are planning to invest only a few times per year in bigger portions (lets say 1x 15K or 3x5K) - it isn't even the worst solution.
But in that case, I'd suggest to use e-trading and buy the V3AA ETF.
(this holds only stocks, though - so check your risk profile)
Your banking package will be free as from 25K invested.
The big question with PF is: for how long. With the push to be a more private bank, they have been raising costs steadily.
Best alternative from Switzerland cost wise is Interactive Brokers, and buying US ETFs.
But first, check your situation and risk profile, in this phase of life.
In my experience most people, even long time investors dramatically over estimated their capacity to live the risk they take on. There are very few people who will sit on their hands do nothing when they see even 30% never mind 60% written off their portfolio. Oh they will rationalize their decision in some way or other and they will not track the outcome of having not taken action.... But in a very high number of cases it will be the wrong decision.
One of the last projects I worked on in the area of behavioral finance was working on a serious of questionnaires and tools to help advisors rank a clients capacity to withstand financial risk. It is very interesting see how people rank themselves against the advice they respond to and the transactions they execute in a crisis.
Thanks for the detailed response! Yes I was greatly impacted in 2008 - at that time, a large portion of my retirement fund was in stocks. It eventually bounced back quite well, but I didn't want to take that kind of risk closer to retirement!