Why should I invest in a fund for pillar 3a?
As a rule, pillar 3a pays off because it offers tax advantages: deposits up to the maximum amount (currently 6,826 francs for individuals with a pension fund) can be deducted from your taxable income. You can choose between a pillar 3a account with preferential interest, a fund or an insurance solution. A pillar 3a account earns higher interest than a regular savings account. And because interest rates right now are almost as low as they have ever been, there are better return opportunities to be found on the capital markets. A long-term historical comparison shows that equities generate higher returns than fixed-income investments or a savings account. However, they are also subject to greater value fluctuations. A pillar 3a fund like UBS Vitainvest lets you participate in the performance of the financial markets.
What distinguishes the UBS Vitainvest funds from rival products?
We manage the UBS Vitainvest Investment Funds according to the multi-manager principle.
What are the benefits of this multi-manager approach?
The idea behind the approach is to work together with the best fund managers – even if they come from outside UBS. Investors therefore get access to select funds run by reputable asset managers with different investment styles and strategies. That’s why the Vitainvest funds are not only diversified overall by asset class (such as equities, bonds and real estate) but also by investment style.
Are fees charged by each of the underlying funds?
Our fund of funds solution is highly efficient, transparent and cost-effective. Investors can clearly see what strategy the portfolio is pursuing at any given time. The multi-manager approach pays off for our clients: Vitainvest funds have generated excellent returns over the last one, three and five years respectively and feature in the first and second quartile of the Morningstar ranking (at the end of the third quarter).
Do these funds always comply with the statutory requirements for pillars 2 and 3?
Yes, the investment policy is aligned with the requirements laid down in the Swiss Federal Act on Occupational Retirement, Survivors' and Disability Pension Plans (BVG). The guidelines are strictly observed – even when we make changes to the funds. We have a multi-step process that prevents any violation of the legal requirements. This includes warnings when implementing new investments and daily monitoring by independent experts with no relation to the fund management.
The new Vitainvest 75 funds have an equity allocation of around 75 percent. Does that also conform to the law?
Yes. However, at present most pillar 3a investment funds tend to have a maximum equity allocation of 50 percent. But the law allows a higher target weight for equities under certain conditions: the portfolio has to be appropriately diversified, the risk entered into must be suitable for pension provision purposes and investors have to be specifically informed about the increased risks.
Who are the new funds suitable for?
The Vitainvest 75 fund depends on you having a long investment horizon (ten years and more) plus increased risk capacity and tolerance. In return, it offers attractive earnings potential. Young people who aim to make an early start on saving toward their pension can reasonably hope to generate attractive returns with our funds by the time they retire.
Switzerland or global?
UBS Vitainvest funds come in a variety of constellations. This gives investors the opportunity to decide whether they want to invest mainly with a Swiss or global focus. They are also free to choose the equity exposure – which largely determines the risk-return ratio. Depending on preference, fund units can be sold, partially sold or transferred to a normal securities account on retirement, giving investors additional flexibility.