Bond investments

gaijin

gaijin

Member
I have recently been looking at bonds to generate a regular, low-risk income on one platform. Two of my findings:
  1. On Degrio you cannot trade Swiss bonds. I find this a very strong limitation. On @Baptiste Wicht 's blog it says
    The choice for bonds is slightly more limited.
    Click to expand...
    I find this an understatement. You cannot buy individual bonds not bond ETFs (e.g.iShares Swiss Domestic Government Bond 3-7 ETF). Yes, I know, bonds are the boring stuff. But it can be really useful for low-risk investments. So I would tend to not recommend Degiro for any investor because of this limitation. You might not be interested in bonds at this very moment. But if you become interested in bond trading, you would have to find a new broker.
  2. Swiss bonds (corporate and government) have very low interests. Findings low-risk bonds with interest rates higher than a good savings account is hard. In general, you should therefore put your money into a savings account first. Only if there are no options for savings accounts (withdrawl restrictions or amounts of >100kCHF) bonds can be interesting.
My conclusions
  • Open a savings account at a bank that offers a good interest on savings account (Bank Eki, CEA or use Moneyland to search)
  • Keep browsing for highly rated bonds (>A) that offer a reasonable (>1.2%) interest. Use IB as the broker to trade such bonds.
  • If available and depending on the interest, consider paying into your second pillar.
 
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My conclusions are the same. Generally, the savings accounts are the best choice. If you can get a good on a certificate of deposit at you bank, it may be worth it, but it's locking your money for a long time.

There are simply no great solutions for CHF, the rates are going to be low.

gaijin said:
I find this an understatement
Click to expand...
It's not clear whether we can buy Bond ETFs or not in your statement? (Did you mean not or nor)?

I will make this clearer in the article
 
Baptiste Wicht said:
It's not clear whether we can buy Bond ETFs or not in your statement? (Did you mean not or nor)?
Click to expand...
Sorry, that wasn't clear. I meant to say that not being able to buy any kind of Swiss bond related products on Degiro is quite a significant minus and should be expressed with stronger words than 'slightly more limited' (maybe even listed as a CON in the conclusion).
 
I will update the article in the coming days, thanks. I can understand why they don't have Swiss bonds, but why would they not have Swiss Bonds ETFs? Have they no Swiss ETFs anymore? Are they filtering it? That's weird.
 
I got a message at the end of last year, telling me that my assets in the 2nd pillar will receive an interest of 3% for 2024. Finally. Still, before it was 1% as long as I was part of it. If there was consistently 3% interest on the 2nd pillar assets, I would be much more willing to add money.
 
Yeah ...the wildly different interest rates in the second pillar are a actualy a huge minus point for the swiss pension system ... If you happen to be in the Migros PK you will get 7% on your capital for 2024, others will get 1,25% (or even less if the PK is underfunded) ... And you cannot do nothing about it besides of changing your employer, which in most cases is not a realistic option. It's a lottery ...
 
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