{"id":8694,"date":"2018-04-30T18:17:00","date_gmt":"2018-04-30T16:17:00","guid":{"rendered":"https:\/\/www.smolio.ch\/wissen\/passive-pillar-3a-funds-why-pay-more\/"},"modified":"2024-12-08T13:56:15","modified_gmt":"2024-12-08T12:56:15","slug":"passive-pillar-3a-funds-why-pay-more","status":"publish","type":"post","link":"https:\/\/www.smolio.ch\/en\/wissen\/passive-pillar-3a-funds-why-pay-more\/","title":{"rendered":"Passive pillar 3a funds.\nWhy pay more?"},"content":{"rendered":"Lesedauer<\/span> 3<\/span> Minuten<\/span><\/span>\n

When saving in pillar 3a, you also have the option of investing your money in funds in addition to the traditional savings account.\nFor some time now, these have also been available with a higher equity component.\nLet’s take a look at how you can make even more of your money with 3a securities savings. <\/p><\/div>\n\n\n\n

When investing money, the basic rule<\/a> is “higher expected return = higher risk”. If you opt for a fund solution in the 3rd pillar, you invest your money in productive capital, i.e. your money is invested in companies, for example, and “works” there. Accordingly, you participate in increases in value – or losses – on the financial market. That’s why you generally envisage a longer investment period of 7 to 10 years or even longer for your 3a pension fund. Regularly investing your 3a pension contributions in 3a pension funds can thus generate a higher final capital<\/strong> than an investment in a savings account – but you have a corresponding risk of fluctuations in value. <\/p><\/div>\n\n

Depending on your risk appetite, you can choose pension funds with different proportions of equities<\/h2><\/div>\n\n

The proportion of equities in the pension fund is indicated by the additions in the name. The figures 25, 35, 45, 67 or 75 are indications of the strategic equity allocation of the pension fund. <\/strong>This has only been allowed to exceed 50 percent since 2008.\nFor this reason, there are no evaluations of the 10-year performance of pension funds with a high equity ratio. <\/p><\/div>\n\n

Historically, the majority of pension fund assets have been invested in actively managed funds. In these funds, the fund management selects investments itself – i.e. “actively” – and attempts to achieve a higher return than is generated by an investment in the benchmark index. In contrast, exchange-traded funds (ETFs) are content with the return of an index. They only “passively” track this index. ETFs are therefore characterized by much lower fees than active funds. You can find out more about investing in and selecting ETFs in this article<\/a>. <\/p><\/div>\n\n

ETFs have also been finding their way into pension provision for some time now<\/strong><\/h2><\/div>\n\n

Passive 3a pension funds are combined from various ETF products so that they cover different regions and asset classes. In pillar 3a, the lower fees benefit the compound interest effect<\/a> particularly strongly due to the long investment horizon. While active 3a pension funds charge annual fees (so-called total expense ratio) of up to 1.6 % to the fund assets, these are between 0.38 % and 0.94 % depending on the passive 3a pension fund. In the best case scenario, you can even get away with 75% lower costs!<\/strong><\/p><\/div>\n\n