1. What is an investment fund?
An investment fund is a basket of financial securities (usually stocks and bonds), and you can buy one or more shares in this basket. Funds are generally composed of securities of companies in various sectors. By diversifying in this way, you are exposed to a lower level of risk than if you invested in just one company.
There are many investment funds in Switzerland. There are equity (stock) funds, bond funds, and real estate funds, as well as asset allocation funds that invest in a mix of securities and can be selected based on your particular investor profile. You can also choose funds based on their management style or their objective – such as to support sustainable investing. Investment funds are created and managed by specialists and sold through financial institutions that have been approved by the financial market supervisory authority.
2. Why should I put my money in an investment fund rather than a savings account?
Investment funds offer you a way to make your money work for you, in keeping with a widely recognized principle: the more risk you are willing to take on, the higher the potential return. Depending on the economic environment, the return on your investment may exceed the amount of interest the same amount of money would earn in a savings account.
These days, the interest rate paid by savings accounts is very low or even zero. In contrast to the past, when you could actually earn some money on your savings account, the current economic situation has pushed interest rates to extremely low or even negative levels. The Swiss National Bank, for example, actually makes other banks pay interest in order to keep their funds with it. And these banks can pass along these costs to their own customers.
3. How much money do I need to get started investing?
You don’t need to have a lot of money to start investing. What’s important are your savings capacity, which is how much money you can comfortably put away every month, and your investment horizon, which is how many years your money will work for you.
For as little as CHF 100 per month, you can invest with our BCV Start Invest savings plan. All you need to do is establish your investor profile, which determines the fund your money will be invested in, and the amount you want to invest each month. We’ll take care of the rest. And with this kind of investment, you won’t even have to pay any transaction fees.
In terms of investment horizon, BCV Start Invest funds are an attractive option if you can keep your money invested for five or more years.
4. What are the risks of putting money in an investment fund?
The value of the fund can fluctuate depending on the financial markets. However, this risk is limited in several ways. First, professionally managed funds spread risk across various asset classes, meaning that you won’t be putting all your eggs in one basket. Second, having a longer investment horizon normally allows you to compensate for periods of market decline with periods of market gain.
5. How can I be sure that I’m investing in the right fund for me?
Before investing with us, you’ll speak with one of our advisors to determine your investor profile. To do this, he or she will ask you key questions, such as:
What is your overall financial situation (income, savings, expenses, planned purchases in the short and medium term, dependents, etc.)? How much money do you have to invest? What is your investment horizon? How would you react if your investments lost value?
Based on your answers to these questions, you will discuss together what investment options might be right for you.
6. Should I invest my money in one go or piecemeal?
That depends on your financial situation and any major plans you may have. If you can set aside some money each month – for example, CHF 100 – your best option is to invest it in a Start Invest savings plan (see question 3 above). If you have a lump sum that you can invest in one go without affecting your day-to-day finances, CHF 10,000 is a good place to start.
Remember: it is important to meet with a banking advisor to discuss your personal situation and standard of living.
7. Can I invest responsibly with an investment fund?
Yes, it is possible to invest both sustainably and profitably. Our range of ESG funds incorporate environmental, social, and governance criteria into their core strategies.