Buying or Copying a Fund?

Buying an ETF (Exchange Traded Fund) is a good way to invest in a diversified portfolio, however the fund is only as well diversified as its focus. An SMI ETF contains Swiss large caps, no other countries, no mid or small Swiss companies.

The question is whether it is better to buy the fund or the stocks of the companies in the fund. There are pros and cons to both.

Overall, owning an ETF is a quick way to be invested at a relatively low cost. The biggest disadvantage is that you own a share of a bank product that may not include the companies you want to support. In the chart the  the gray line shows how the best performing SMI ETF has developed over the past 30 months. The blue line shows how a slightly altered copy of it, which includes 81% of the companies in the fund with their respective weighting as specified by the fund. The question is which option is a better investment given the pros and cons listed above.

The sum of the dividends in the replicated fund is higher because most of the companies with the highest dividends are included in the 81%. The cost of the replicated fund depends on your bank. For members it is better to copy the fund because the fees are so low (no custody or inactivity fees).

Anmelden oder Registrieren