3a investment products
Discover the variety of investment products - from security-conscious to opportunity-orientated strategies, everything is included.
Find the right investment strategy The right investment strategy
You've already decided to invest your pillar 3a in securities and you know the reasons for saving with securities. We explain what you should consider when choosing an investment strategy.
We explain what you should consider when choosing an investment strategy für your pillar 3a or vested benefits.
What is an investment strategy?
In banking jargon, we understand «investment strategy» to be a mix of shares, property, bonds, commodities and so on. This «investment strategy» determines how your money should be invested and how it should work for you.
The various investment strategies differ primarily in the weighting of equities. Because equities are subject to comparatively large price fluctuations, they influence both the expected return and the risk to which your pension assets are exposed.
In the names of a lot of financial products, you can often see the designations «active», «passive» or perhaps also «index». These terms describe how the individual investment products are set up and administered
«Active» or «passive» - what do these terms mean?
«Active» or «passive» - what do these terms mean?
Active:
These investment strategies and products are administered by portfolio managers who pick certain types of securities and buy and sell them at the most advantageous possible times. The aim is to beat a certain market index, e.g. the SMI (Swiss Market Index), meaning to achieve a stronger investment performance.
Passive or index:
The aim of this investment strategy is to reflect the developments of a certain market index as closely as possible. The investment products are put together by people, but then «automatically» track an index or a bundle of multiple indexes. The aim is not to achieve a better investment performance than the index, but also not a worse performance either.
What determines your investment strategy?
- Your aims: what is more important to you, do you want to achieve the highest possible return or the highest possible security?
- The time horizon available to you: do you have a long time left until you turn 65 (the pension age for men) or 64 (the pension age for women*) or do you only have a few years to work with? Or are you planning on withdrawing your pension assets early, for example to buy your own home?
As a general rule, the longer your investment horizon, the higher your equity allocation can be. Therefore, the shorter your investment horizon, the less risk you should take.
- Sustainability: Is sustainable development something close to your heart, and do you want to only support sustainable companies with your pillar 3a?
*from 2028, the retirement age of 65 will also apply to women.
What equity weighting is right for me?
The equity weighting depends on how willing you are to accept possible fluctuations (risk) in expectation of a future return. A high equity component generally means a higher risk level. Unfortunately there’s no way of having high potential returns without accepting the risk.
Here’s a small tip as well: for investment products, the equity weighting is usually given as a number in the name of the product. (e.g. Moderate 45 Active means moderate investment strategy and 45 indicates the proportion of equities in the fund (here 45%)).
All these terms can be somewhat confusing at first, but once you’ve looked at it in more detail, it all becomes quite simple. The key factors in deciding which investment strategy is right for you are your time horizon and how much risk you are willing to accept for a potential return.
frankly gives you the following five investment strategies to choose from:
Safety conscious (risk level: 1)
Safety conscious (risk level: 1)
Safety is a high priority to you. You want to avoid risks and losses. You prefer steady asset growth with only very slight fluctuations.
Cautious (risk level: 2)
Cautious (risk level: 2)
You prefer safety and take only manageable risks. You are willing to accept small fluctuations in assets.
Balanced (risk level: 3)
Balanced (risk level: 3)
You tolerate risk, but do not take any major risks. You accept moderate fluctuations in your assets.
Ambitious (risk level: 4)
Ambitious (risk level: 4)
You are more open to risk and are willing to take increased risks. You are willing to accept higher fluctuations in assets.
Focused on opportunities (risk level: 5)
Focused on opportunities (risk level: 5)
You are very open to risk and don't let losses bother you. You see risks as opportunities. You accept considerable fluctuations in assets.
Sustainable investments for your future
All active Swisscanto investment products in frankly follow a responsible approach or strictly sustainable approach.
Responsible products:
Our actively managed Responsible investment products in traditional asset classes are based on the Paris Climate Agreement as standard, and make a sustainable difference in many other areas.
Sustainable products (stricty sustainable):
With our Sustainable funds, you can focus on companies and countries that contribute to achieving one or more of the UN's 17 Sustainable Development Goals (UN SDGs).
Discover your personal investor type
You can find out what kind of investor you are by answering some simple questions directly online in frankly. Different financial institutions call their investment strategies by different things. At frankly we call them safety-conscious, cautious, balanced, ambitious, focused on opportunities.
- Do you want less risk and fewer fluctuations? Then you need a lower equity weighting. However, this reduces your potential return.
- Do you want the chance of higher returns in the future? Then it makes sense to have a higher equity weighting.
Can I only have one investment strategy or is it better to have several?
You can devise various different strategies for your pillar 3a, i.e. with various timeframes. This opens up a wide range of exciting possible combinations. For example, you can invest a pillar 3a following a high risk strategy and then a year later also invest another pillar 3a while being more security-conscious. This way you can reduce your risk or create extra opportunities for higher returns.
However, if you are pursuing multiple investment strategies, please note that it is best to have one pillar 3a per strategy. This also gives you maximum flexibility.
Time is your friend
The longer you can invest your money for, the more you chance you have of evening out price fluctuations. This is because previous experience shows us that falls in share prices have always been balanced out by recoveries, though prices may take some time to recover.
Let’s take a look back in time:
Falls in share prices always balance themselves out.
Inspired by: www.cash.ch
