Unlike ETFs, investment
funds are actively managed. The fund management aims to achieve a higher
return than a given
benchmark (reference index) by carefully
selecting individual securities.
Traditionally, investment funds are marketed by banks and fund management companies. However, they
can also be admitted to trading on a stock exchange.
Investment funds differ in terms of the strategy applied (value or growth strategy), type
(open-ended or closed-end fund), distribution policy
distributing) and the kinds of
investments they make. There are also mixed and special forms such as sector funds, theme funds and
Trading and market making
There is no market maker requirement in connection with investment funds that are
listed on SIX Swiss Exchange. However, to ensure
liquidity, SIX Swiss Exchange prescribes a minimum
capitalisation of CHF 100 million and a minimum market distribution of
Commission and exchange fees
The fund management company may charge an issuing or redemption commission when buying or selling
investment funds. As in the case of other stock exchange transactions, bank-specific
exchange fees apply.
The fund management company charges a
management fee for various administrative tasks relating to the management of the fund.
Depending on the fund and the issuer, these fees usually amount to between 1%
and 3% of the fund assets per year.
The investment fund contract sets out how the fees are charged to the investor. For example, if the
management fee is 1% p.a. and is charged on a weekly basis, the price of
the investment fund drops by 0.0192% a week.