Negative interest rates on account balances
The policy of the central banks, especially in Switzerland and Europe leads to the situation that deposits at the central banks are charged with negative interest rates. The banks continue to pass on these “negative credit rates”. Our experience shows that in this regard, however, no uniform handling is observed. In Austria, for example, private individuals may only be charged to a limited extent with negative interest rates. For private foundations, the same conditions apply here as for private individuals. It is advisable to check whether an optimization can be achieved by bundling services and to continue to include the point of negative interest in the negotiation of the conditions.

Bonds are having negative yields
Market participants expected bond yields to rise, but they instead declined. 10-year government bonds are having negative returns of up to -0.6 % p. a.! With regard to new investments, the question arises as to whether further investments should be made in bonds or whether any impairment of debtor quality may be made. The resulting change in the return / risk profile, any liquidity risks and the probabilities of default are to be examined in detail.

Inclusion of further investment categories
The lack of attractiveness of high quality bonds and the surge in equities prompt many clients to consider other asset classes. The finance industry is active in the structuring and sale of such products. Our experience shows that, in principle, there are no new investment products and that many financial products have similar characteristics. Therefore, every investor should ask himself if he understands the investment product and its opportunities, risks and costs. If necessary, these points should be presented by the consultant in a clear and transparent manner. Furthermore, it is indispensable to examine to what extent the use of the new investment products changes the overall return / risk profile. As investment controllers, we serve individuals and institutional investors like pensions funds or foundations. In addition to the different customer profiles and investment options, there are topics that are currently being discussed by all our customers. In the following, we would like to briefly summarize three.

As Investment Controllers we are at your disposal with an independent second opinion.