Our investment committee selects the ETFs for the five ready-to-go findependent investment solutions as well as for customizing an own investment solution according to the following criteria. 

Basic requirements

SIX Listing:
We only buy ETFs that are tradable on the Swiss Stock Exchange (SIX). Transactions on foreign exchanges often entail additional costs for Swiss investors.

Offering for private clients in Switzerland:
For regulatory reasons, our customers are classified as such during the registration process and receive the corresponding legal rights. Consequently, certain products are not accessible to them.

Established providers:
We prefer UBS, BlackRock (iShares), and Vanguard. Running ETFs is a classic volume business, i.e. the more capital a provider manages, the lower its average costs and the lower the prices and better the performance it can offer. Therefore, there are few providers.

Fund domicile:
For ETFs with Swiss investments, we require the fund domicile to be Switzerland; for international investments, Ireland and Luxembourg. The jurisdiction in which an ETF holds its investments is particularly relevant for the tax treatment of distributions (dividend and coupon payments). Swiss investors pay income tax on these, and depending on the country, for example, all or part of the withholding tax cannot be reclaimed.

Replication method:
We exclusively use ETFs that actually hold the investments whose performance they track. We prefer ETFs that hold all the investments of the underlying index. This is known as "full physical" replication. The use of an "optimized method" is also possible. Conversely, we exclude the use of ETFs that replicate the underlying index using complex financial instruments ("synthetic" replication). These carry financial risks if their provider goes bankrupt.

Exotic features:
We do not buy ETFs that exhibit exotic features. On the one hand, these include currency hedging, short sales, and leverage for short-term speculation. Such products often have high hidden costs. We also distance ourselves from ETFs that implement an opaque quantitative strategy, such as multi-factor products or minimum-variance approaches. They are complex and often lack a robust track record.

Retrocessions:
We do not select any ETFs for which findependent receives compensation from the provider, but choose the ETFs independently.

Important selection criteria

TER:
We generally use ETFs with product costs (TER) that do not exceed 0.5% per year. The lower, the better, as lower product costs mean higher returns for investors. This is an important key figure.

Spread:
We only select ETFs that demonstrably have a lower average spread between the purchase ("ask") and sale price ("bid") than 0.5%. The narrower, the better, as wide bid-ask spreads mean excessively high purchase prices or excessively low sale prices, which directly results in lower returns for investors.

Size:
We prefer ETFs that manage more than CHF 100 million. A "small" ETF has similar costs to a "large" one, but generates less revenue, tends to have low trading volumes, and high spreads. This means higher costs for investors and carries the risk that the ETF will be closed if it lacks commercial success.

Age:
We prefer ETFs with a track record of at least three years. A "young" ETF often has low assets initially, low trading volumes, and high spreads. Once again, this carries the risk that the ETF will be closed if it lacks commercial success.

Tracking quality:
We preferably select ETFs whose performance continuously loses less than 0.5% per year against the underlying index. The lower the difference, the better, as underperformance means a lower return for investors. This is an important key figure.

In summary:

• We only use established ETFs from leading providers.

• There are no opaque financial structures hidden behind the ETFs used; instead, the assets are held directly.

• All ETFs used have high trading volumes and can be bought or sold for you at any time.

• We only use ETFs with low product costs (TER).

• All ETFs used have high trading volumes and thus low trading spreads.

• Passive investing with ETFs minimises transaction costs.

Our investment committee reviews the ETFs regularly and makes adjustments if better ones enter the market. By acting independently and keeping costs low, more stays in your pocket in the end.