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money talks
They're simple, cheap and diverse: exchange-traded funds. We introduce you to Switzerland's top recent award-winning ETFs, showcase current trends and explain your options for ETF savings plans. Discover new ways to specifically enhance your portfolio today.
Exchange-traded funds (ETFs)—passively managed funds that typically track an index and trade on a stock exchange—are a convenient, simple investment option that scores for low cost, transparency, and flexibility. You can choose from thousands of ETFs to suit almost any investing need. From broad market indices to sustainable themes to specific industries – there's something for everyone. Even in small amounts and without much effort, you can benefit from developments in the financial markets.
More and more people are discovering the advantages of this form of investment, especially when combined with a savings plan. Global ETF inflows reached $1.45 trillion in the first 10 months of 2024 alone, surpassing the annual record of $1.29 trillion set in 2021. ETFs are also popular in Switzerland. However, there is still a lot of potential here: according to a survey by Moneyland Only 34% of respondents invest in ETFs, while 32% still hold more expensive actively managed funds.
Aside from a propensity to save – 84% of people have money in a savings account, which may be one of the reasons We in Switzerland are still lagging behind when it comes to cheap and easily accessible ETF savings plans, such as those already established in other countries such as Germany. But that may soon change. At the annual Swiss ETF Awards, which I attended recently, there was exciting news – both regarding the winning ETFs and the development of savings plans. Here's an overview of what you should know.
Award-winning ETFs for your portfolio
The Swiss ETF Awards annually recognize outstanding ETFs that excel in performance, cost efficiency and innovation. Funds are evaluated against these criteria by an independent panel of financial experts. In addition, nearly 1,000 private investors vote for the public award winners.
Here are the winning ETFs for 2024 that can help you diversify your portfolio:
Vanguard FTSE Global UCITS ETF (USD) Allocation
This ETF is great if you want to invest globally. It covers more than 3,000 companies from industrialized and emerging countries. The total expense ratio (TER) is 0.22% and the price is cheap. However, this ETF is only available in a distributed version, which means profits are distributed and not automatically reinvested. This is great for anyone looking to increase their income, but not so great if you want to build wealth. You then have to reinvest the profits yourself. ISIN: IE00B3RBWM25.
iShares Swiss Dividend ETF (Switzerland)
For fans of the Swiss market, this ETF offers the opportunity to invest in high-dividend companies. If you're looking for stable income and regular dividends, this is the perfect option. ISIN: CH0237935637.
Franklin FTSE India UCITS ETF
Do you want to benefit from India's growth opportunities? This ETF focuses on the Indian market, making it ideal for participating in one of the world's fastest-growing economies (GDP growth is expected to be 6.8%, compared to Switzerland's 0.8% this year). EFTs are also great for diversification. TER 0.19%, ISIN: IE00BHZRQZ17.
VanEck Defense UCITS ETF
Thematic ETFs are always a trend. This ETF allows you to invest in companies in the defense sector – a market that has become increasingly important in recent years as conflicts have intensified. The VanEck Defense ETF has delivered a 12-month performance of +55% and an annual interest rate of 0.55% (justetf.com, as of November 17, 2024). ISIN:IE000YYE6WK5.
iShares MSCI World ESG Enhanced UCITS ETF USD(Acc)
The ETF sets a sustainability theme and combines global diversification with a focus on the environment, social responsibility and good corporate governance. Ideal for anyone who wants to invest in a future-proof and ethical way. TER 0.2%, ISIN: IE00BHZPJ569.
Raiffeisen ETF Pure Gold Sourced from Reliable and Traceable A Swiss Franc
Gold remains a classic – especially in uncertain times. With this ETF, you can invest in gold that is responsibly sourced and fully traceable. Management fee 0.29%, TER 0.3%, ISIN: CH1122756724.
Xtrackers USD High Yield Corporate Bond UCITS ETF
This ETF provides exposure to high-yield corporate bonds. This is an exciting option for anyone looking to diversify their portfolio and benefit from the bond market. TER 0.2%, ISIN: IE00BDR5HM97.
UBS (LUX) Fund Solutions – Sustainable Bank Bonds
This ETF invests in bonds issued by development banks to finance sustainable projects. It combines security and sustainability and is suitable for investors with long-term thinking. Management fee 0.18%, TER 0.18%, ISIN: LU1852212023.
ETF of the Year: AXA IM NASDAQ 100 UCITS ETF USD Acc
AXA IM NASDAQ 100 UCITS ETF USD Acc was named the 2024 “ETF of the Year.” This ETF tracks the NASDAQ-100® Index, which includes the 100 largest non-financial companies on the Nasdaq Stock Exchange. The annual TER is 0.14%, which is very cost-effective. Income is retained, i.e. reinvested, allowing your investment to grow. For technology enthusiasts, this ETF offers exposure to heavyweights like Apple, Microsoft, and NVIDIA, and has delivered +34% performance in one year (justetf.com, as of November 17, 2024). ISIN:IE000QDFFK00.
ETF savings plans on the rise
In many countries, ETF savings plans have become an integral part of the investment strategies of private investors. They make it possible to invest in ETFs in small amounts on a regular basis and thus benefit from the average price effect. This type of savings plan is less common in our country as many banks offer more expensive fund savings plans. Until now, the other option was to invest through online providers like Yuh, Neon, Findependent, etc., which offered such savings plans and, depending on the provider, held just one ETF. However, depending on the provider, this involves additional administrative costs or transaction costs that may be incurred with each regular purchase.
Now, given the growing demand for ETF savings plans, the market has changed: Swissquote launches fractional trading and savings plan in October 2024 to provide flexible and affordable investment options. Postfinance is also launching an ETF product in mid-2024, aiming to further stimulate the market. Since mid-2023, Neon has also offered trading in about 70 ETFs through its “Neon Invest” program.
There is no shortage of options and products. With the diversification of ETFs and the increase in savings plan options, you have a wide range of investment options. Do you already own an ETF? If so, what funds are in your portfolio? 💰
Image: Evelyn Harlacher
Olga Miller…
… worked at UBS for more than a decade in a variety of roles, including setting up the Women's Advancement Initiative and the UBS Gender ETF. She subsequently founded independent financial image SmartPurse, which offers financial digital courses and workshops on the platform. Miler has blogged MoneyTalks for five years and her first book, Rich, Richer…Me!, a humorous financial guide, was recently published by Observer Verlag.
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