You've already decided to invest your pillar 3a in securities and you know the reasons for saving with securities. All there is to do now is find the right mix of shares, real estate, bonds, commodities etc. In banking jargon, this mix is known as the “investment strategy”, and determines how your money should be invested in such a way that it works for you.
*from 2028, the retirement age of 65 years will apply for women and men
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 security-conscious, cautious, balanced, ambitious, opportunity-oriented.
The main difference between these strategies is in their equity weighting.
Because shares are subjected to comparatively large price fluctuations, this influences both the expected return and the risk which your pillar 3a credit balance is exposed to:
Here’s a small tip as well: for pillar 3a investment products, the equity weighting is usually given as a number in the name of the product.
Bei frankly hast du die fünf folgenden Anlagestrategien zur Auswahl:
frankly gives you the following five investment strategies to choose from:
The equity weighting depends on how willing you are to accept possible fluctuations (risk) in expectation of a future return. Unfortunately there’s no way of having high potential returns without accepting the risk.
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
«Active» or «passive» - what do these terms mean?
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: 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.
How to see at a glance whether a financial product is right for you:
If you know what is meant by equity weighting, index and active/passive, then you can already tell what an investment product is all about from its name:
Example 1: Moderate 45 Responsible
Moderate 45 Active stands for a moderate investment strategy, meaning somewhere in the middle between low and high risk, 45 refers to the proportion of shares contained in the product (45% here). Responsible stays for the sustainable approach of this fund. Furthermore it's an active managed fund, what means that a portfolio manager is trying to beat the market.
Example 2: Extreme 95 Index
Extreme 95 Index stands for an opportunity-oriented investment strategy, i.e. one that is very open to taking risks, 95 refers to an equity weighting of 95% and index means that the fund follows a market index. Please note that this investment product massively exceeds the maximum equity weighting allowed in occupational pension schemes of 50%.
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.
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.
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