How Switzerland invests its assets

In the previous article we learned that we are quite a saving people. But how much wealth does this result in? Which investments are currently very popular? Which ones lead a wallflower existence? And what are the differences in investment behavior by gender, age, wealth and region? You will get the answers in this article.

1 Swiss with the second highest wealth in the world

According to Credit Suisse Global Wealth Report 2017 is exactly the average net wealth per adult in Switzerland after deducting debts 537,599 US dollars, which puts Switzerland in second place behind Iceland (see Figure 1).

This amount probably seems surreally high to most people. Two factors need to be taken into account here: Firstly, it includes our compulsory contributions to occupational pensions. Second, these are average values.

1.1 Median beats average (in terms of meaningfulness)

When it comes to height, average values ​​make sense because we can assume a normal distribution. In the case of assets, on the other hand, average values ​​are not very meaningful because of the great disparity.

To illustrate: A single billionaire, of which there are quite a few in Switzerland, and 99 destitute people result in average wealth per person of CHF 10 million.

In such cases, a better reference value is the median, which divides wealth into two groups: half of Switzerland owns more than the median wealth, the other half less. Said study comes to one Median value of $229,059which we believe is still a very high amount (see Figure 1)

Figure 1: Switzerland occupies a top position in the wealth ranking
Figure 1: Switzerland occupies a top position in the wealth ranking. Source: Credit Suisse Global Wealth Report 2017

Now we want to go one step further and address the question of how Mrs. and Mr. Schweizer invest their obviously plentiful money.

2 Cash and Savings Account Top – ETFs Flop (Unfortunately)

The comparison service Moneyland, together with the market research institute GfK, published a representative one in 2018 opinion poll on Swiss investment behavior at approx 1,500 people carried out. The question was how much money the respondents had invested in various financial investments.
Below are the most popular systems in descending order:

  • 67% have cash as an investment
  • 64% have medium or large amounts in their savings accounts
  • 59% have medium or large amounts in their private accounts
  • 55% have a 3a account; 43% via a 3a fund
  • 41% have invested in real estate (usually in the owner-occupied property)
  • 39% have stocks (single title)
  • 25% have actively managed investment funds
  • 19% have invested in gold and 10% in other precious metals
  • 14% have ETFs (Unfortunately, this ingenious investment vehicle is still not well known; click here for the explanatory article: ETFs: The investment revolution)
  • 12% own structured products
  • 8% are invested in cryptocurrencies

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2.1 Young people rely on low-risk investments – and bitcoins

Depending on the age group, investment behavior also changes significantly. Among the youngest group of respondents between the ages of 19 and 25, private accounts, savings accounts and cash are more common than average.

At the same time, the affinity for new technologies and investment opportunities is decreasing among the older respondents. Cryptocurrencies such as Bitcoin are much more popular with younger investors than with older ones. Conversely, ownership of shares, real estate and investment funds increases significantly with age.

2.2 The wealthier, the riskier

Investment behavior is strongly influenced by personal wealth. Many asset classes correlate positively with growing wealth, including investment funds, ETFs, shares, real estate, structured products and even 3a savings accounts.

What is meant here is not only absolute values, but also that with increasing assets the relative values ​​in relation to the other invested assets also increase.

This finding is particularly evident in the richest group of people with assets of CHF 1 million or more. Practically all millionaires have invested in stocks and real estate, two-thirds in a 3a savings account, 65% in investment funds and around half in structured products and ETFs.

2.3 Cautious women

Women are generally more reluctant to put it on than men. This is particularly evident in somewhat riskier forms of investment such as shares, investment funds and speculative investments such as structured products and cryptocurrencies.

Only a good quarter of women hold shares, while around half of men own such securities.

2.4 Romands hate stocks

Depending on the asset class, there are clear differences between the language regions. Investments in cash, private accounts and savings accounts are more popular in German-speaking Switzerland than in French-speaking Switzerland.

The difference can also be clearly seen in the shares: 41% of respondents in German-speaking Switzerland own shares, while in French-speaking Switzerland it is only 28%. Interestingly, the highly speculative cryptocurrencies such as Bitcoin are somewhat more popular in western Switzerland than in German-speaking Switzerland.

In contrast, the differences between urban and rural populations are not significant for most asset classes.

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3 Conclusion

The net assets (ie minus debts) are included for adults living in Switzerland $537,599 (average) resp. $229,059 (median) very high in international comparison. Switzerland thus takes second place behind Iceland.

Apart from the millionaires, all age groups, genders and regions are considered in Switzerland, mostly very conservatively designed.

This is all the more surprising as the popular Savings and private accounts have had no interest for years yield more, as we have shown in this article. And there are very attractive alternatives on the market with ETFs.

If we also take into account the current inflation rate of around 1 percent, the result is even one gradual loss of wealth.

You can get a general overview of the topic of “investing” here: Learning to invest – in eight lessons.