Actively managed certificates (AMCs): Types and delimitation

Actively managed certificates (AMCs) are experiencing double-digit annual growth in the Swiss financial market. The diversity of these products is considerable. Each type of AMC offers specific advantages for different investment strategies. With cost advantages of up to 30-50% compared to traditional fund structures and a time to market of only 2-3 weeks, AMCs are becoming increasingly important.

The most important facts at a glance

• AMCs exist in various forms: open/closed, index-linked/strategy-linked, with or without leverage
• The AMC type essentially determines the risk/return profile and the appropriate application options
• The choice between discretionary and rule-based management influences the flexibility and transparency of the product
• Single-asset vs. multi-asset AMCs differ fundamentally in terms of diversification and complexity
• Delta 1 and leverage AMCs offer different risk profiles for different types of investors

Reading tip: AMCs – explanation and insights into actively managed certificates

Open vs. closed AMCs

One of the most fundamental differentiators of AMCs is their accessibility to investors over time.

What characterizes open-ended AMCs?

Open-ended AMCs allow investors to enter and exit at any time. These structures offer continuous tradability, which makes them particularly attractive for investors who value flexibility and liquidity. The issuer usually provides daily or weekly trading opportunities, allowing you to adjust your position to your changing needs.

The advantages of open AMCs lie in their flexibility and ongoing adaptability to market developments. With this AMC structure, you retain full control over your investment horizon and can react to changing personal circumstances at any time.

What are closed AMCs?

In contrast, closed-end AMCs have a fixed term or a defined placement volume. No further investments are possible after the end of the subscription phase, and redemption before the end of the term may be restricted or subject to costs .

This structure is particularly suitable for strategies with illiquid underlyings or where a longer-term capital commitment is required to implement the investment strategy. Closed-end AMCs often offer more attractive conditions, as the asset manager can plan with a fixed investment horizon.

Comparison: open vs. closed AMCs

Characteristic	Open AMCs	Closed AMCs
Tradability	Continuous (daily/weekly)	Limited or only on the secondary market
Liquidity	High	Limited
Investment horizon	Flexible	Fixed
Fee structure	Often higher due to flexibility	Tends to be lower
Typical application	Liquid markets, flexible strategies	Illiquid assets, long-term strategies
Minimum investment	From CHF 10,000	Often higher (from CHF 25,000)

Investment suitability: Choose open AMCs for maximum flexibility and short-term investment horizons. Opt for closed-end AMCs if you want to invest for the longer term and potentially benefit from more favorable conditions.

Reading tip: AMC rules and regulations: What investors need to know

Index-linked vs. strategy-linked AMCs

There are two fundamentally different approaches to AMCs when it comes to implementing the investment strategy.

Aspect	Index-linked AMCs	Strategy-linked AMCs
Transparency	High (defined index rules)	Low (depending on reporting)
Flexibility	Limited by index rules	High (direct adjustments possible)
Traceability	Index composition traceable	Dependent on communication from the manager
Typical fees	0.8-1.5% p.a.	1.2-2.2% p.a.
Decision-making process	Systematic, rule-based	Individual, often discretionary

Investor suitability: Index-linked AMCs offer greater transparency and are suitable for investors who prioritize transparency. Strategy-linked AMCs suit investors who rely on the ability to react quickly and the direct expertise of the portfolio manager.

How do index-linked AMCs work?

Index-linked AMCs track an actively managed index as a reference. This index is compiled and regularly adjusted by the asset manager. The performance of the AMC is directly linked to the performance of this index.

The advantage of this structure is its transparency – the composition of the index and its changes can be published regularly. Investors therefore have a clear idea of which assets they are invested in.

What distinguishes strategy-linked AMCs?

With strategy-linked AMCs, the portfolio manager makes direct investment decisions without being tied to a specific index. This structure enables a more immediate and flexible response to market changes.

Adaptability is the key advantage here, as the manager can implement his strategy without the restrictions of a predefined index. However, this often goes hand in hand with less transparency for the investor.

Reading tip: Investing money in Switzerland: investment strategies and the 1×1 of investing

Delta 1 AMCs vs. leverage AMCs

The risk/return profile of an AMC is largely determined by the use of leverage.

Characteristic	Delta 1 AMCs	Leverage AMCs
Risk profile	Moderate (determined by underlying assets)	Increased due to leverage
Return potential	Directly proportional to underlying assets	Disproportionate (amplified)
Loss potential	Limited to investment	Greatly increased risk of loss – up to total loss – depending on the leverage structure.
Volatility	Corresponds to underlying assets	Increased due to leverage effect
Suitable for	Medium to long-term investors	Experienced, risk-conscious investors
Typical application	Core investment, long-term strategies	Tactical positions, market views

Investor suitability: Delta 1 AMCs are recommended for security-oriented investors with a medium to long-term investment horizon. Leverage AMCs are suitable for risk-tolerant, experienced investors who can accept fluctuations in value and are aiming for disproportionately high returns.

What are Delta 1 AMCs?

Delta 1 AMCs replicate the underlying investment strategy in a 1:1 ratio. This means that the performance of the certificate corresponds directly to the performance of the underlying assets, without additional amplification or hedging.

These AMCs are characterized by a moderate risk profile, which is mainly determined by the risk of the underlying assets. They are suitable for investors seeking direct participation in an actively managed strategy, without additional leverage.

How do leverage AMCs work?

Leverage AMCs use derivatives or structured products within the strategy to amplify (or in some cases hedge) returns. A change in the value of the underlying assets leads to a disproportionate movement in the certificate value.

This structure enables higher potential returns, but is associated with correspondingly higher risks. Even small market movements can lead to significant fluctuations in value.

Single-asset vs. multi-asset AMCs

The breadth of asset classes within an AMC largely determines its diversification and complexity.

Characteristic	Single-asset AMCs	Multi-asset AMCs
Diversification	Limited (within a class)	Comprehensive (across classes)
Complexity	Lower	Higher
Management	Focused, specialized	Broader, requires diverse expertise
Investment objective	Specialized exposure	Balanced overall solution
Typical fees	0.8-1.8% p.a.	1.2-2.5% p.a.
Suitability as an overall solution	Complementary addition	Can serve as a core investment

Investor suitability: Single-asset AMCs are suitable for self-determined investors who want to manage their asset allocation themselves and cover individual markets in a targeted manner. Multi-asset AMCs offer a diversified complete solution and are suitable for investors who are looking for an actively managed portfolio across different asset classes.

What characterizes single-asset AMCs?

Single-asset AMCs focus on a single asset class, such as equities, bonds, currencies or cryptocurrencies. Diversification can certainly take place within this class (e.g. various equities), but the focus remains on one category of assets.

The advantage of these AMCs lies in their clarity and focus. They are particularly suitable for investors who want to invest in a specific asset class or who want to manage their own asset allocation.

What do multi-asset AMCs offer?

Multi-asset AMCs invest across different asset classes – typically a combination of equities, bonds, commodities and alternative investments. The portfolio manager can actively adjust the weighting between these classes.

These AMCs offer built-in diversification and allow the manager to react to market changes not only within an asset class, but also by rebalancing between classes.

Reading tip: Portfolio rebalancing – why it’s so important

Discretionary vs. rules-based AMCs

The way decisions are made in portfolio management is another important differentiator.

Aspect	Discretionary AMCs	Rule-based AMCs
Decision-making process	Based on experience and assessment	Systematic according to defined rules
Flexibility	High (can adapt quickly)	Low (bound by rules and regulations)
Transparency	Often lower	* Higher (defined processes)
Person dependency	Strong (dependent on manager)	Lower (system-based)
Behavior in crises	Can benefit from experience	Prevents emotional reactions
Typical performance	Potentially higher in inefficient markets	More consistent across different market phases

*Rule-based AMCs offer potentially higher transparency – especially with disclosed, standardized models

Investor suitability: Discretionary AMCs are suitable for investors who trust the expertise and market assessment of experienced portfolio managers. Rule-based AMCs are suitable for investors who prefer transparent, comprehensible and emotion-free investment processes.

What does discretionary management mean?

With discretionary AMCs, the portfolio manager makes investment decisions at his own discretion, based on his market assessment, experience and analysis. They have the freedom to react flexibly to market changes and adjust their strategy accordingly.

The advantage lies in the adaptability and the ability to incorporate non-quantifiable factors such as geopolitical events or market psychology into the decision-making process.

How do rule-based AMCs work?

Rule-based AMCs follow a systematic, often quantitative approach. Investment decisions are made on the basis of predefined rules and algorithms that take certain market indicators, factors or other objective criteria into account.

These AMCs are characterized by a high degree of consistency and discipline in strategy implementation and are less susceptible to emotional decisions or behavioural biases.

AMCs compared to other investment products

To fully understand the characteristics of AMCs, a comparison with related financial products is helpful.

Characteristic	AMCs	Traditional funds	ETFs	Traditional structured products
Regulation	Structured product	KAG/UCITS	KAG/UCITS	Structured product
Management	Active	Active	Passive	Static (no management)
Time-to-market	2-3 weeks	3-6 months	3-6 months	1-2 weeks
Investor protection	Issuer risk	Special assets	Special assets	Issuer risk
Flexibility for managers	High	Limited	Minimal	Not available
Costs	0.8-2.5% p.a.	1.0-2.0% p.a.	0.1-0.7% p.a.	Implicit in structure
Liquidity	Daily/weekly	Daily	During trading hours	Depending on product
Tax treatment (CH)*	Private assets	Often income tax	Private assets	Private assets

* The tax treatment depends on the individual investor profile, the underlying assets and the holding period. Individual advice is recommended.

AMCs vs. traditional investment funds

In contrast to traditional investment funds, AMCs are not subject to the Collective Investment Schemes Act (CISA) in Switzerland, but are classified as structured products. This entails fewer regulatory restrictions, but also less investor protection.

AMCs offer shorter launch periods (2-3 weeks vs. 3-6 months for funds) and more flexibility in the design of the investment strategy. However, investors bear the issuer risk, while fund units are protected as special assets.

AMCs vs. ETFs

Compared to exchange-traded funds (ETFs), AMCs are actively managed instead of passively tracking an index. This leads to higher management fees, but offers the potential for excess returns through active management.

AMCs tend to be less liquid than exchange-traded ETFs, but offer a wider range of investment strategies, including those not available in ETF form.

AMCs vs. traditional structured products

Unlike traditional structured products, AMCs do not have a fixed term (for open-ended structures) and offer ongoing active management. Traditional structured products, on the other hand, often have a fixed payout mechanism and a defined term.

AMCs allow the strategy to be adjusted flexibly over time, while traditional structured products have a fixed payoff structure.

Reading tip: Private financial planning – how to achieve your individual goals

Selection criteria for the right type of AMC

Choosing the right type of AMC depends on your individual investment objectives, your risk profile and your investment horizon.

Investor profile	Recommended AMC structure	Reason
Conservative, short to medium term	Open-ended Delta 1 AMCs with multi-asset approach	Diversification, liquidity, moderate risk
Balanced, medium-term	Open-ended strategy-linked AMCs with discretionary management	Flexibility, active adjustment to market phases
Growth-oriented, long-term	Single-asset AMCs in growth markets, optional closed-end structure	Focused approach for long-term growth
Opportunistic, flexible	Leveraged AMCs or specialized thematic AMCs	Opportunity orientation, higher risk for return opportunities
Experienced self-directed investors	Single-asset AMCs as building blocks	Self-determined asset allocation
Delegators	Multi-asset AMCs with discretionary management	“Carefree package” with professional management

Investment objectives and risk tolerance

Delta 1 AMCs with a multi-asset approach and rule-based management are suitable for conservative investors with a focus on capital preservation. This combination offers diversification and reduces subjective decision-making risks.

Growth-oriented investors can consider single-asset AMCs in growth segments or discretionary managed strategies with a higher equity allocation.

Opportunistic investors with a high risk tolerance may be interested in leveraged AMCs or specialized single-asset AMCs in volatile markets.

Investment horizon and liquidity requirements

• For a short-term investment horizon (1-2 years), open, liquid Delta 1 AMCs that can be traded at any time are preferable.
• For medium-term investments (3-5 years), both open and closed structures offer advantages, with the choice of strategy becoming more decisive than the AMC structure.
• For long-term investments (over 5 years), closed-end AMCs or those with illiquid underlyings designed for longer holding periods may also be of interest.

Conclusion

The AMC landscape offers tailor-made solutions for different investor profiles. Open-ended, rule-based Delta 1 AMCs with a multi-asset approach are suitable for conservative investors, while risk-tolerant investors can benefit from discretionary single-asset AMCs or leverage structures.

Choosing the right type of AMC depends crucially on your investment objectives, risk tolerance and time horizon. With a market share of 10-15% of the structured product market in Switzerland, AMCs offer a flexible alternative to traditional investment vehicles, especially for investors who value active management and adaptability.