Actively managed certificates (AMCs) are becoming increasingly popular with Swiss investors. They offer the advantage of active asset management in a flexible investment product. However, as with all financial products, there are costs that can affect the return. At the same time, the tax treatment of AMCs entails special features that are relevant to your investment decision.
Contents
The most important facts at a glance
- Management fees for AMCs are typically between 0.5% and 2% p.a. of the invested capital
- Performance fees usually amount to 10% to 20% of the excess return
- AMCs are subject to withholding tax of 35% on interest and dividends in Switzerland
- The total expense ratio (TER) can vary considerably depending on the provider and investment strategy
- Compared to ETFs, AMCs generally incur higher fees, but with the potential for better performance
- Tax reporting is provided by most Swiss AMC providers
Fee structure of AMCs
Here you will find a list of all fees charged on AMCs.
Management fees – the basis of the costs
The management fee forms the basis of the cost structure for AMCs. This annual fee is charged regardless of performance and amounts to between 0.5% and 2% of the invested capital, depending on the complexity of the investment strategy. Actively managed certificates with a focus on niche markets or special investment strategies tend to have higher management fees.
A characteristic feature of AMCs is the charging of performance fees. These typically amount to between 10% and 20% of the excess return achieved over a pre-defined hurdle rate. The hurdle rate can be defined in absolute terms (e.g. 5%) or relative to an index (e.g. MSCI World).
This fee structure is intended to align the interests of investors and asset managers. However, pay attention to the precise definition of the calculation method, in particular the
- Calculation period (annual, quarterly)
- High water mark rules
- Definition of the benchmark or hurdle rate
Other cost components
In addition to the main fees, AMCs incur further costs that can increase the overall charge:
- Administration costs: additional fees for managing the certificate (0.1% to 0.5% p.a.)
- Trading costs: Costs incurred when rebalancing the portfolio
- Issue premium: One-off fee on subscription (0% to 3%)
- Redemption fees: Costs incurred when selling the AMC (0% to 2%)
Total expense ratio (TER) – the decisive factor
The total expense ratio (TER) is the most important key figure for a meaningful comparison of different AMCs. It includes all ongoing costs associated with the management of the certificate. Note, however, that performance fees and trading costs are often not included in the TER (as there is no uniformly regulated TER definition for AMCs as there is for UCITS funds) and must be taken into account separately.
Tax treatment of AMCs in Switzerland
Here you will find further input on the tax treatment of AMCs in Switzerland.
Withholding tax
In Switzerland, AMCs are generally subject to withholding tax of 35% on distributed income such as interest and dividends. In the case of accumulating AMCs, withholding tax is levied on components classified as income, even if these are not distributed but accumulated in the product value. Domestic investors can generally reclaim this tax in full, provided they declare the income correctly.
Income and wealth tax
The following tax regulations apply to Swiss investors:
- Income tax: distributions and components declared as income (e.g. dividends or interest) are subject to income tax. Private capital gains are generally tax-free in Switzerland, provided there is no commercial trading activity.
- Wealth tax: The value of the AMC on the reporting date (usually December 31) is part of the taxable assets
- Capital gains: Private capital gains are generally tax-free, provided the investor is not classified as a professional securities trader
Tax reporting
An important advantage of Swiss AMCs is the detailed tax reporting provided by most providers. This supports you in making correct tax declarations and enables you to reclaim withholding tax in the best possible way. When choosing an AMC, make sure that such reporting is offered.
Reading tip: Explanation and insights into actively managed certificates
Cost comparison: AMCs and other investment products
| Investment instrument | Typical management fees (p.a.) | Performance fees | Issue premium | Transfer tax (CH) | Special features |
| AMCs | 0.5% – 2.0% | 10% – 20% | 0% – 3% | 35% on earnings | Flexible structures, high adaptability |
| Active funds | 1.0% – 2.5% | Rare | 2% – 5% | 35% on distributions | Regulated structures, higher investor protection |
| ETFs | 0.1% – 0.5% | None | 0% – 0.5% | 35% on distributions | Passive strategy, high cost efficiency |
| Direct investments | None | None | Trading fees | Direct taxation depending on the security | Highest transparency, no management costs |
| Robo-Advisor | 0.5% – 1.0% | Rarely | Mostly none | 35% on returns | Digital management, often ETF-based |
| Structured products | Implicit in product structure | Partially | 0% – 2% | 35% on bond portion | Complex structures, different risk profiles |
The cost efficiency of an investment product depends not only on the absolute fees, but must also be considered in relation to the expected return and the service offered. AMCs are positioned in the mid to upper price segment, but offer
- Access to specialized investment strategies
- Active management with customization options
- Tailor-made solutions
- Often direct contact with the asset manager
Reading tip: The advantages of AMCs for investors
Optimization opportunities for AMC costs and taxes
- Careful comparison of providers: Compare the fee structures of different AMC providers carefully. The differences can be considerable and have a significant impact on your returns in the long term. Pay attention not only to the management fees, but to all cost components.
- Check discounts for higher investment amounts: Many AMC providers offer fee discounts for higher investment amounts. Above a certain investment volume, you may be able to obtain individually negotiated conditions.
- Tax-optimized investment strategy: You can minimize your tax burden with a tax-optimized investment strategy:
- Be aware of the difference between accumulating and distributing AMCs
- Check the optimum timing for purchases and sales with regard to your personal tax situation
- Take advantage of tax benefits by paying into pillar 3a
- Consider the investment horizon: With long-term investments, ongoing costs have a greater impact than one-off fees. Conversely, the entry and exit costs play a more important role for short-term investments. Adapt your selection accordingly to your investment horizon.
- Regularly review the cost structure: The fee landscape for AMCs is constantly evolving. What seems cost-efficient today may be outdated tomorrow. A regular review of your existing AMCs is therefore recommended.
Conclusion
The fee and tax structure of AMCs is complex, but can be structured transparently. To make an informed investment decision, you should carefully examine all cost components and tax aspects and evaluate them in relation to the expected returns and your individual investment objectives. The higher costs of AMCs are particularly significant compared to passive investment products such as ETFs, but active management offers the opportunity for excess returns and more flexible adjustment options.
Your personal risk profile, tax optimization goals and need for personalized service should ultimately determine whether the higher costs of AMCs are worth it for you.
