Key points at a glance:<\/p>\n
- \n
- Passive approach: ETF\u2032s are based on the performance of a benchmark index.<\/li>\n
- Cost structure: The absence of active management results in lower fees.<\/li>\n
- Yield dependency: The performance of the ETF directly follows that of the underlying index.<\/li>\n
- Cost-effective: As an investor, you incur low management costs compared to actively managed funds.<\/li>\n
- Replication types: There are physically and synthetically replicated ETF\u2032s.<\/li>\n<\/ul>\n
Incidentally, passive ETFs account for around 99% of all ETFs on offer, while actively managed ETFs are a marginal phenomenon. We therefore focus our comments on passively managed ETFs.<\/p>\n
Physically replicated ETF\u2032s<\/h2>\n
In the case of physically replicated ETF\u2032s, the provider invests directly in the actual securities of the index. The weighting of the shares included corresponds exactly to that of the benchmark index. For example, if a share accounts for five percent of the market capitalization of the SMI, it is also represented in the 'SMI' ETF with five percent. There is therefore an exact replication, which is constantly adjusted depending on the market situation.<\/p>\n
The MSCI World global share index is very popular with investors. This contains around 1,400 shares of the world's largest companies. However, it would be very difficult to replicate this number one-to-one in an ETF and would require a large amount of capital. This is why sampling is often used in such situations. Only those shares that have the greatest influence on index performance are taken into account. Stocks that have only a minor influence on the index are not included. However, it should be noted that the ETF then no longer reflects the benchmark index one-to-one. The ETF performance could therefore differ from the performance of the benchmark index.<\/p>\n
Physically replicated ETF\u2032s in a nutshell:<\/p>\n
- \n
- Direct investment in the index components<\/li>\n
- Accurate mapping of the index through constant adjustment<\/li>\n
- Large indices such as the MSCI World are based on sampling (selection of the most important stocks).<\/li>\n
- Sampling may cause slight deviations from the index development.<\/li>\n<\/ul>\n
Synthetically replicated ETF\u2032s<\/h2>\n
Synthetically replicated ETFs achieve the index performance via swaps with financial institutions. A synthetic ETF is therefore often referred to as a swap ETF.<\/p>\n
For these swaps, the ETF provider concludes a contract with a financial institution, the so-called swap partner.<\/p>\n
Under this agreement, the swap partner undertakes to pay the index yield including dividends. In return, he receives a fee \u2013 the swap fee \u2013 as well as the return on the securities included in the portfolio. What kind of portfolio? ETF investors' money is invested in a portfolio of securities that serves as collateral in the swap transaction. The securities in the collateral portfolio do not necessarily have to match the securities in the benchmark index being tracked. For example, a synthetic ETF on European shares (MSCI Europe) can also contain American shares in the collateral portfolio.<\/p>\n
A synthetic ETF is dependent on the swap partner fulfilling its obligation. If it can no longer make the payments, the ETF provider is forced to fall back on the collateral portfolio and possibly realize losses for the investors. Synthetic ETF\u2032s are therefore subject to a so-called counterparty risk.<\/p>\n
Synthetically replicated ETF\u2032s in a nutshell:<\/p>\n
- \n
- Investment in a collateral portfolio (not identical to the index).<\/li>\n
- Swap partner guarantees the index return including dividends.<\/li>\n
- Risk: If the swap partner defaults, losses could be incurred.<\/li>\n<\/ul>\n
What are the advantages of investing money in ETF\u2032s?<\/h2>\n
ETF\u2032s impress with their low costs, high flexibility and broad diversification, which makes them very popular with investors. The cost efficiency of ETF\u2032s is due to the passive approach.<\/p>\n
However, they are not only a comparatively inexpensive, but also a very flexible investment solution<\/a>, as they are always traded at the current market value. This makes investing in ETF\u2032s a very transparent undertaking. You can always track the composition using the corresponding benchmark index. The broad portfolio that ETF\u2032s generally represent ensures that you are sufficiently diversified and thus avoid security-specific risks.<\/p>\n
And you have another advantage in terms of security: the legal status of a separate asset. This means that your units are treated separately from the assets of the fund company (ETF provider). So if the fund company becomes insolvent, your units will not be affected.<\/p>\n
Last but not least, the ETF\u2032s impress with their broad offering. This ranges from country indices to various sector, commodity or thematic indices such as hydrogen. You are spoiled for choice.<\/p>\n
Advantages at a glance:<\/p>\n
- \n
- Cost structure: Low management fees due to elimination of active management.<\/li>\n
- Transparency: constant traceability of the composition.<\/li>\n
- Diversification: Reduction of security-specific risks.<\/li>\n
- Security: Units are considered special assets and are protected in the event of provider insolvency.<\/li>\n
- Diversity: Investment possible in country, sector, commodity and theme indices.<\/li>\n<\/ul>\n
What are the risks and disadvantages of passive ETF investing?<\/h2>\n
ETF\u2032s require active portfolio management by the investor and involve risks such as currency influences. This investment product is a passive investment instrument. The ETF merely tracks a benchmark index. There is therefore no active risk management.<\/p>\n
In addition, you often have a foreign currency risk, similar to investing in foreign shares. As an investor, you need to be aware of this. A negative currency development can reduce your return or eat it up completely. To avoid this risk, it is better to choose currency-hedged ETFs.<\/p>\n
Even if you have opted for physically replicated ETF\u2032s, you will not receive the underlying securities immediately. If the ETF provider goes out of business, which is admittedly very unlikely, you will have to be patient. It may well take several years before you finally get your securities. And who knows how they will perform in the meantime.<\/p>\n
At a glance:<\/p>\n
- \n
- Lack of active management: no protection against market risks, personal responsibility required.<\/li>\n
- Foreign currency risk: exchange rate losses possible with unhedged ETF\u2032s.<\/li>\n
- Liquidity risk: If the provider defaults, it may take time to recover the invested assets.<\/li>\n<\/ul>\n
How do experts rate the use of ETF\u2032s in portfolios?<\/h2>\n
At Point Capital<\/a>, we see ETF\u2032s as a cost-effective, flexible instrument for covering a wide range of investment themes. They can be used to cover a wide range of investment themes, even with little capital investment. However, it is important to note that you as an investor must actively manage the ETFs yourself.<\/p>\n
At Point Capital, we also rely on ETFs, especially for the tactical allocation of our investment portfolio. This enables us to react immediately to changes in the market in an efficient yet cost-effective manner and thus achieve attractive long-term returns for our clients.<\/p>\n
How do we do that? We would be happy to show you in a personal meeting how we invest your money profitably in the long term and how we use ETF\u2032s to do so. We look forward to hearing from you. <\/span>[\/vc_column_text][\/vc_column][\/vc_row][vc_row type='in_container' full_screen_row_position='middle' column_margin='default' column_direction='default' column_direction_tablet='default' column_direction_phone='default' bg_color='rgba(63,75,111,0.2)' scene_position='center' text_color='dark' text_align='left' row_border_radius='none' row_border_radius_applies='bg' overflow='visible' class='border-box' overlay_strength='0.3\u2033 gradient_direction='left_to_right' shape_divider_position='bottom' bg_image_animation='none' shape_type=''][vc_column column_padding='no-extra-padding' column_padding_tablet='inherit' column_padding_phone='inherit' column_padding_position='all' column_element_direction_desktop='default' column_element_spacing='default' desktop_text_alignment='default' tablet_text_alignment='default' phone_text_alignment='default' background_color_opacity='1\u2033 background_hover_color_opacity='1\u2033 column_backdrop_filter='none' column_shadow='none' column_border_radius='none' column_link_target='_self' column_position='default' gradient_direction='left_to_right' overlay_strength='0.3\u2033 width='1\/1\u2033 tablet_width_inherit='default' animation_type='default' bg_image_animation='none' border_type='simple' column_border_width='none' column_border_style='solid']
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<\/div><\/div><\/div>[\/vc_column][\/vc_row][vc_row type='in_container' full_screen_row_position='middle' column_margin='default' column_direction='default' column_direction_tablet='default' column_direction_phone='default' scene_position='center' text_color='dark' text_align='left' row_border_radius='none' row_border_radius_applies='bg' overflow='visible' overlay_strength='0.3\u2033 gradient_direction='left_to_right' shape_divider_position='bottom' bg_image_animation='none'][vc_column column_padding='no-extra-padding' column_padding_tablet='inherit' column_padding_phone='inherit' column_padding_position='all' column_element_direction_desktop='default' column_element_spacing='default' desktop_text_alignment='default' tablet_text_alignment='default' phone_text_alignment='default' background_color_opacity='1\u2033 background_hover_color_opacity='1\u2033 column_backdrop_filter='none' column_shadow='none' column_border_radius='none' column_link_target='_self' column_position='default' gradient_direction='left_to_right' overlay_strength='0.3\u2033 width='1\/1\u2033 tablet_width_inherit='default' animation_type='default' bg_image_animation='none' border_type='simple' column_border_width='none' column_border_style='solid'][toggles style='default' border_radius='none'][toggle color='Default' heading_tag='default' heading_tag_functionality='default' title='For whom is investing in ETF\u2032s particularly suitable?'][vc_column_text css='' text_direction='default']ETF investing is suitable for investors who focus on long-term, passive investing and want to build up assets in a cost-efficient manner without asset management<\/a>. However, the strategy requires personal responsibility in portfolio management.<\/p>\nTypical investor profiles:<\/p>\n
- \n
- Long-term savers: Ideal for savings plans and retirement provision.<\/li>\n
- Beginners: Transparent structure and broad diversification make it easier to start investing.<\/li>\n
- Cost-conscious investors: Low fees increase the net return.<\/li>\n<\/ul>\n[\/vc_column_text][\/toggle][toggle color='Default' heading_tag='default' heading_tag_functionality='default' title='How much money should you invest in ETF\u2032s as a minimum?'][vc_column_text css='' text_direction='default']There is no general minimum investment amount. Many providers make it possible to invest in ETFs from as little as CHF 50 per month in the form of a savings plan. For one-off investments, it is usually possible to start from as little as CHF 100. It is important that the investment amount matches your personal risk structure and investment horizon.[\/vc_column_text][\/toggle][toggle color='Default' heading_tag='default' heading_tag_functionality='default' title='How can I further reduce the risk when investing in ETFs?'][vc_column_text css='' text_direction='default']Risk can be reduced through broad diversification and long-term investing. Investors can spread their portfolio across several ETF\u2032s in different regions, sectors and asset classes (e.g. quality shares<\/a>, bonds). A long-term investment strategy<\/a> also helps to better cushion short-term market fluctuations.[\/vc_column_text][\/toggle][toggle color='Default' heading_tag='default' heading_tag_functionality='default' title='Does an ETF savings plan make more sense than a one-off investment?'][vc_column_text css='' text_direction='default']Both have advantages and disadvantages, depending on your individual strategy. With an ETF savings plan, you invest small amounts on a regular basis and benefit from the so-called cost-average effect, which can smooth out price fluctuations. 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ETFs are funds that track a benchmark index. They are cost-effective and efficient. <\/p>\n","protected":false},"author":3,"featured_media":6972,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"wds_primary_category":0,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[304],"tags":[405],"class_list":{"0":"post-6970","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-private-investors","8":"tag-etf"},"acf":[],"_links":{"self":[{"href":"https:\/\/pointcapital.ch\/en\/wp-json\/wp\/v2\/posts\/6970","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/pointcapital.ch\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/pointcapital.ch\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/pointcapital.ch\/en\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/pointcapital.ch\/en\/wp-json\/wp\/v2\/comments?post=6970"}],"version-history":[{"count":4,"href":"https:\/\/pointcapital.ch\/en\/wp-json\/wp\/v2\/posts\/6970\/revisions"}],"predecessor-version":[{"id":8716,"href":"https:\/\/pointcapital.ch\/en\/wp-json\/wp\/v2\/posts\/6970\/revisions\/8716"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/pointcapital.ch\/en\/wp-json\/wp\/v2\/media\/6972"}],"wp:attachment":[{"href":"https:\/\/pointcapital.ch\/en\/wp-json\/wp\/v2\/media?parent=6970"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/pointcapital.ch\/en\/wp-json\/wp\/v2\/categories?post=6970"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/pointcapital.ch\/en\/wp-json\/wp\/v2\/tags?post=6970"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}