PORTFOLIO MANAGEMENT COSTS

Simple full cost accounting in CHF


The annual portfolio costs incurred by Gebert Rüf Stiftung, including controlling, monitoring and supervision by the foundation’s committees, currently runs to approx. 0.21 % p. a. of the foundation’s assets.

Active portfolio management involves a range of visible and invisible costs: costs for custodian services, costs for portfolio management, brokerage for switching, costs for currency conversion, de facto invisible costs in structured products, etc., as well as various taxes. Asset pooling eliminates some of these costs and substantially reduces the others. The cost difference for a small grant-making foundation can easily reach the order of one percent (100 basis points) a year.
Cost factors in CHF
2012
2013
2014
2015

Bank partner: fixed total charge; incl. degressive cost structure

233’138
271’634
320’614
322’749
Neuformulierung der Anlagestrategie
(inkl. MwSt)
 
15’000
 

Commission and brokerage fees on purchase/sale: in the context of outflows of funds (e.g. support funding) or fund inflows (e.g. refunds of withholding tax) and portfolio switches (e.g. shifts in weightings in the context of index adjustments)

12’042*
138’331*
73’714*
8’775*
Investment controlling: fixed annual charge
15’000
16’200
16’200
16’200
Cost estimate of supervision and monitoring by the foundation’s committees (estimation)
10’000
10’000
10’000
10’000
Total costs in CHF
270’180
451’165
420’528
357’724

Costs as in % of foundation's assets p.a.

0.16

0.26

0.24

0.21

 

* Estimate of spread costs for fund issues and redemptions.

The asset reorganization needed for implementing the pool solution in January 2010 generated additional one-off costs of CHF 216’935. These were already more than offset in the first year thanks to the option of hedging equity investments against currency losses.
May 2013 saw a change of strategy (diversification) which led to switching operations involving corresponding one-time costs. Consideration was given to new investment categories (emerging markets equities, corporate bonds, foreign currencies) which, even with passive management, are more expensive than our previous investment categories. We should therefore continue to expect slightly higher asset management and administration fees during the years ahead. Barring any further change of strategy or any rebalancing operation in response to market developments, the cost factor commission/brokerage fees etc. should be roughly in line with previous years.