The attractiveness of the money market has not escaped private and institutional investors in Switzerland. During the year, products in this segment denominated in francs once again attracted significant volumes of capital.
According to estimates from Swiss Life Asset Managers, Swiss money market funds would have grown by around a third in 2024 alone. This increased enthusiasm for money market products is mainly explained by the rise in the level of interest rates. interest. Indeed, following the massive public aid deployed during the coronavirus pandemic, central banks were forced to gradually raise key rates in order to counter the rise in inflation. These adjustments finally allowed investors to return to clearly positive returns on the money market.
However, many banks have only partially, if at all, passed on these interest rate increases to their customers, and have often imposed a cap on interest-bearing deposits. This context thus creates an additional incentive for investors to transfer their assets from bank accounts to investments on the money market.
Interest in money market investments remains high
This trend of investing more in money market funds continues today, as strategic decisions are often implemented with a lag. Currently, on the Swiss franc money market, investors still benefit from a current yield exceeding more than double that offered by a ten-year Swiss Confederation bond.
With generally short durations, the money market allows you to remain flexible without requiring a long-term commitment. Thus, no return opportunity is lost, it is possible to observe economic developments and subsequently reinvest in investments with higher return potential. Diversified monetary investments also offer an attractive alternative to bank deposits for those who wish to preserve their capital while maintaining daily access to liquidity.
The key to success: long experience in managing Swiss franc bonds
From 2023, Swiss Life Asset Managers was able to anticipate the growing demand for money market funds by launching a new money market fund focused on the Swiss franc market. Money market funds control investment risks by focusing on very strong borrowers and diversifying their commitments to minimize the overall credit risk of the portfolio. In addition, the short duration of investments considerably reduces sensitivity to interest rate fluctuations.
The Swiss Life Funds (CH) Money Market Swiss Francs fund, for example, invests in short-term receivables of the Swiss Confederation, SNB bonds, pledge letters, term deposits, as well as bonds of companies with high or even very high solvency. Independent credit analysis, balanced selection of securities and rigorous risk monitoring thus constitute essential pillars for the management of these investments.
Professional asset managers benefit from privileged and significantly more economical access to the market, a major advantage for such a specific sector. Swiss Life Asset Managers, as a leading buyer in the Swiss franc bond market, has a strong network in the primary and secondary markets, strengthening its expertise and ability to effectively navigate the Swiss franc money market.
A clear advantage thanks to the diversification of collective investments
In the money market, the diversification effect often makes investing in collective investments, such as money market funds, advantageous. Although it is possible to make direct investments in various monetary instruments, the desired portfolio effects, such as a balanced maturity profile, only become fully optimized at institutional scale.
In just one and a half years, the assets of the Swiss Life Funds (CH) Money Market Swiss Francs fund have exceeded 1.5 billion Swiss francs, positioning this fund among the leaders of the Swiss franc money market and allowing it to process volumes significant subscription fees. This success can be explained in particular by a diversified clientele, made up of pension funds, corporate treasurers, wealth managers and private investors.
As a member of an insurance group, Swiss Life Asset Managers aims to guarantee the financial security of its investors. Thanks to high-quality investment solutions, we support our clients in achieving their long-term financial objectives.
Disclaimer
This publication has advertising content. This document has been prepared to the best of our knowledge with all due care and diligence, but we cannot guarantee its content and completeness and we accept no liability for any losses that may result from the use of this document. this information. The explanations given are purely informative, which is why it is neither an offer nor the provision of a financial service. This document includes forward-looking statements that reflect our estimates and expectations at a given time. However, these may deviate significantly from actual developments and results due to various risks, uncertainties and other influencing factors. Before any subscription, investors are invited to obtain and carefully read the detailed information on the fund concerned in the regulatory documents (prospectus, fund contract, DIC PRIIPs, and latest annual/semi-annual reports) which constitute the sole legal basis for the purchase of fund shares. These are available free of charge in printed or electronic form from the fund management company, Swiss Life Asset Management SA, General-Guisan-Quai 40, 8002 Zurich. The income and value of fund units may decrease or increase, and a total loss of the capital invested in said units cannot be excluded. Historical performance does not constitute a sufficient basis for predicting future developments in values and prices. Past performance is no guarantee of current or future performance. It does not in any way constitute a guarantee of future performance or capital. The performance takes into account all commissions and fees generated at fund level (e.g. management fees). It does not take into account the costs incurred by customers (issue and redemption fees and commissions, securities custody commission, etc.). “Swiss Life Asset Managers” is the brand name of the Swiss Life Group’s asset management activities. More information at www.swisslife-am.com. Source: Swiss Life Asset Managers. All rights reserved. Contact: info@swisslife-am.
