Category Archives: Investments

Listed Swiss Property Fund List – Overview

For a client I recently compiled the following list of Swiss Property Funds;

Available as XLS and Immofonds PDF for download.

Name ISIN Marktkapit. In Mio. CHF * Ausschüttungs-rendite (%) Anlagefonds Agio Grundbesitz Kurs 30.04.17
UBS Swiss Sima CH0014420878 7’787.00 2.9 Gemischt 30.4 Indirekt 112
CS 1A Immo PK CH0008443035 3’959.00 3.5 Gemischt 24.9 Direkt 1500
CS Ref Siat CH0012913700 3’163.40 2.6 Wohnen 44.6 Indirekt 204.9
CS Ref Livingplus CH0031069328 2’857.00 2.4 Wohnen 32.7 Direkt 137
Cs Ref International CH0019685111 2’535.50 3.6 Ausland 16.9 Indirekt 1200
UBS Swiss Anfos CH0014420829 2’313.90 2.6 Wohnen 32.5 Indirekt 69.5
CS Ref Green Property CH0100778445 2’257.80 2.8 Nachhaltigk. 21.2 Direkt 132.9
CS Ref Interswiss CH0002769351 1’696.00 4.0 Geschäft 10.6 Indirekt 204.5
Swisscanto IFCA CH0037430946 1’527.90 2.4 Wohnen 41.8 Indirekt 144.9
Immofonds CH0009778769 1’529.00 2.8 Wohnen 57.9 Indirekt 475
UBS Sw Swissreal CH0014420886 1’561.50 3.9 Geschäft 13.7 Indirekt 68.25
La Fonciere CH0002782263 1’379.40 1.9 Wohnen 54.3 Gemischt 1115
Schroder Immoplus CH0007251413 1’323.80 2.5 Geschäft 33.0 Indirekt 1379
UBS Foncipars CH0014420852 1’230.00 2.7 Wohnen 33.7 Indirekt 95.9
FIR CH0014586710 1’247.00 2.0 Wohnen 48.6 Gemischt 193.8
Solvalor 61 CH0002785456 1’216.60 1.9 Wohnen 42.4 Direkt 270
Immo Helvetic CH0002770102 980.00 2.7 Wohnen 48.8 Indirekt 245
Rothschild Re Swiss CH0124238004 939.60 2.2 Wohnen 27.3 Direkt 140.6
Swissinvest Real CH0026168846 877.20 2.5 Wohnen 40.3 Direkt 181
Bonhote Immobilier CH0026725611 890.50 2.1 Wohnen 29.8 Indirekt 149.5
Realstone CH0039415010 849.10 2.5 Wohnen 27.2 Direkt 154
CS Ref Hospitality CH0118768057 824.20 3.2 Hospitality -2.0 Direkt 94.15
Procimmo CH0033624211 846.00 3.0 Geschäft 34.7 Direkt 175.2
Patrimonium CH0034995214 638.90 1.9 Wohnen 23.3 Direkt 155
UBS Direct Residential CH0026465366 604.10 2.2 Wohnen 40.9 Direkt 18.2
SF Sustainable Property CH0120791253 523.10 2.6 Wohnen 32.8 Direkt 148
Swisscanto Commercial CH0111959190 453.30 2.6 Gemischt 24.1 Direkt 126.5
UBS Direct Urban CH0192940390 378.70 1.9 Gemischt 17.2 Direkt 13.15
CS Ref Logisticsplus 2 CH0245633950 348.00 3.3 Logistik 13.4 Direkt 116
Polymen Fonds CH0107006550 337.80 2.2 Wohnen 27.2 Direkt 151
CS Ref Global CH0139851676 214.40 3.6 Ausland -1.6 Indirekt 92.8
Streetbox CH0037237630 183.10 2.9 Self Storage 76.6 Direkt 447.5
Residentia CH0100612339 160.90 2.3 Wohnen 18.5 Direkt 1347
SXI Real Estate Funds CH0009947406 40’393.70 2.7        

UBS Results: The Headwinds and The Green Shoots


The interest rate environment is dampening the business model which relies on “net interest income” , as can clearly be seen above (marked red). Luckily for banks in general and UBS in particular,  loyal customers aren’t putting stronger pressure on fees and commissions.

Own fund business schrinking and lighter customer activity are lowering commissions slight as can be seen in “net fee and commission income”.

A noteworthy positive is the “net trading income” especially as the impact from own credit, that had inflated the result last year QoQ.

Looking at the business divisions UBS has the investement bank and the americas wealth management that are not as profitable or safe as the personal & corporate banking or wealth management units. Also the investment is made to look better by transferring costs out to corporate center. It is inherently riskier and disguised. Asset management is also not especially profitable.


Credit Suisse underlying business – 2Q16 results

You can’t be much else than shocked by the dramatic revenue drops.

This is the unfiltered story, no PR-talk, no salesman talk, just facts and figures:

Credit Suisse
2Q16 1Q16 2Q15 Down
Net interest income 1’999 2’011 2’869 -30.32%
Commission and fees 2’796 2’675 3’259 -14.21%
Trading revenues 94 -271 498 -81.12%
Other revenues 219 223 329 -33.43%

Then compare it to expenses:

All small moves.

Compensation and benefits 2’734 2’482 2’914 -6.18%
General and administrative expenses 1’760 1’848 1’928 -8.71%
Commission expenses 352 387 406 -13.30%
Restructuring expenses 91 255 0

Further important problems:

  • Strategic Resolution Unit (SRU) is a huge black hole for revenues and at the same time costs a lot to run, especially “other operating expenses”.
  • Swiss Universal Bank (SUB) and International Wealth Management are running with decent margin, especially when compared to Global Markets which is very expensive to run. Probably to many “screen watchers” in London, NY etc…


What is an especially large challenge as an outsider; understanding what is in the Strategic Resolution Unit (SRU) and how is it performing.

Some info from the 1H16 report:


The bloodsuckers are

  • the investment banking portfolio which somehow manages to have negative revenue (always a good sign if your assets are working against you).
  • the funding costs

Pure Play Swiss Private Bank (Julius Baer – Vontobel)

In the H1 report Julius Baer is described as a pure play private bank. That’s why I thought it may be useful for discussions to know what this business model entails. Where do the profits in a pure play private bank come from?

According to my calculations **

22% from interest income (8% at Vontobel)

38% from management and fund fees (55% at Vontobel)

16% from commission (~client trading) (12% at Vontobel)

18% from trading (mainly FX trading) (25% at Vontobel ***)

4% from structured products (guesstimate)  * ( ***probably 5% from trading at Vontobel belong here…)

  • * 4% of the AuM at Vontobel are in structured products; 5% at Julius Baer

If we split the Vontobel business modell we see that

18% is Private Banking

57% is Asset Management

20% is Investment Banking

5% is External Asset Managers



1 Interest income 393.90
2 Interest expense -86.40
3 LOANS       307.5 22.94% 22.50%
4 Advisory and management commissions 433.10  
5 Investment fund fees 87.00  
6 MGMT FEES & FUND FEES     520.1 520.1 38.80% 38.05%
7 Brokerage commissions 251.00  
8 Other commissions 60.60  
9 311.6  
10 Commission expense -96.5  
11 COMMISSIONS       215.1 16.05% 15.74%
12 Trading income FX 229.80 229.8 17.14% 16.81%
13 Trading income Debt Instruments 14.20 14.2 1.06% 1.04%
15 Trading income Equity instruments -126.40  
16 Dividend income on trading portfolios 180.20  
17 STRUCTURED PRODUCTS (partially)       53.8 4.01% 3.94%
18 Total of all the selected above 1340.5
19 Total according to H1 Report 1366.9

julius-baer-net-commission-and-fee-income julius-baer-net-interest-and-dividend-income julius-baer-net-trading-income

Julius Baer Structured Products & Dividend Games Very Profitable, Only in H1 Always

I find it rather interesting that dividend income from trading portfolios (CHF 180m, 121.9) and net trading losses on equity instruments (CHF 126m ; CHF 104m) only happen during the swiss dividend paying season. The profit margin between the dividend income on trading portfolios and the equity losses on trading are 15-30%. As a sidenote: withholding tax is 35%. Also: Dividends in Switzerland are mainly in H1. The dividend trading income and realised trading losses seem to be related to the swiss dividend paying cycle. If Julius Baer was doing trading with US equities for dividends they would be more evenely distributed throughout the year. However H2 never seems to have large fluctuations.

This could lead to a suspicous mind concluding that tax circumenventing in some form or other is taking place. Likely it is legal of course…

The official explanation (and one that makes a lot of sense):

The dividends come from equity securities that are held as a hedge in conjunction with structured products. 

This would also mean that most or all of the negative net trading income from equity instruments is in fact just marked to market securities held for trading.

It does show you that the structured products division of Julius Baer is rather important.  

Check out “Dividend income on trading portfolios”

julius-baer-net-interest-and-dividend-income Check out losses on “Equity Instruments”julius-baer-net-trading-income

Credit Suisse credit agency ratings – near problem area?


The comparison below is interesting for short-term ratings. Credit Suisse and SocGen would lose the A1 Short Term rating with the next step. Now why is this important? Many multi-billion pension funds are forced to move their liquidity from banks that lose the A1 Short Term rating. That will mean a drain on liquidity, which in turn leads to furth problems. Also the rating impact by itself can already cost hundreds of millions in extra costs. This would be another drag on how safe Credit Suisse is.


Which banks are suffering most 2016

This bubble diagramm gives a good impression of which banks, by market cap have suffered most this year.

The highest percentage losers are the ones that the market thinks are most likely to fail, need bail-outs, increase capital – or generally put: Which will be first to fall off the cliff.

Unicredit, RBS, Credit Suisse, Deutsche Bank, Barclays, UBS – in that order – are considered unsafest by shareholders, currently.

In a normal capitalist world, these weak banks may see themselves in a death spiral or at least in a negative feedback loop. If you have a lot of money parked with those banks you will be asking yourself the question, is it safe there, should I risk having large liquidity there? Do these banks have derivatives or property investments or loans that will suddenly wipe out the capital, like in 2008 after it began to look dodgy in 2007.

I’ve read lots of articles stating people are worried about a reoccurence of 2007-2009 in last hours and days. Whether it materialises or can be circumvented is a very open outcome. But investors and people in general react by moving on the rumour.

If you’re in a herd and it starts running, I assume in 9 out 10 cases there is a predator lurking somewhere.


Impact of Credit Suisse Credit Rating Downgrade – CHF 1.2 to 4.2 billion

Keep in mind that we’ve seen 1-2 notches this year already. And that the below filing is for FY2015. You’d be surprised how many educated people don’t understand that ratings downgrades will impact the safety of their bank deposits indirectly.
From SEC filing:
Our access to the debt capital markets and our borrowing costs depend significantly on our credit ratings. Rating agencies take many factors into consideration in determining a company’s rating, including such factors as earnings performance, business mix, market position, ownership, financial strategy, level of capital, risk management policies and practices, management team and the broader outlook for the financial services industry. The rating agencies may raise, lower or withdraw their ratings, or publicly announce an intention to raise or lower their ratings, at any time.
Although retail and private bank deposits are generally less sensitive to changes in a bank’s credit ratings, the cost and availability of other sources of unsecured external funding is generally a function of credit ratings. Credit ratings are especially important to us when competing in certain markets and when seeking to engage in longer-term transactions, including >>>over-the-counter (OTC) derivative instruments.
A downgrade in credit ratings could reduce our access to capital markets, increase our borrowing costs, require us to post additional collateral or allow counterparties to terminate transactions under certain of our trading and collateralized financing and derivative contracts. This, in turn, could reduce our liquidity and negatively impact our operating results and financial position. Our internal liquidity barometer takes into consideration contingent events associated with a two-notch downgrade in our credit ratings. The maximum impact of a simultaneous one, two or three-notch downgrade by all three major rating agencies in the Bank’s long-term debt ratings would result in additional collateral requirements or assumed termination payments under certain derivative instruments of CHF 1.2 billion, CHF 3.1 billion and CHF 4.2 billion, respectively, as of December 31, 2015, and would not be material to our liquidity and funding planning. If the downgrade does not involve all three rating agencies, the impact may be smaller. In January 2016, Moody’s Investors Service downgraded the long-term ratings of Credit Suisse AG and its affiliates by one notch.
Potential cash outflows on these derivative contracts associated with a downgrade of our long-term debt credit ratings, such as the requirement to post additional collateral to the counterparty, the loss of re-hypothecation rights on any collateral received and impacts arising from additional termination events, are monitored and taken into account in the calculation of our liquidity requirements. There are additional derivative related risks that do not relate to the downgrade of our long term debt credit ratings and which may impact our liquidity position, including risks relating to holdings of derivatives collateral or potential movements in the valuation of derivatives positions. The potential outflows resulting across all derivate product types are monitored as part of the LCR scenario paramaters and the internal liquidity barometer reporting.

Bank CDS in Focus – Credit Suisse and UBS Credit Default Swaps Post-Brexit

Sometimes a good graph saves a lot of words. That’s why I’m posting these. Normally I’m no fan of CNBC, as they overdramatize to keep viewers and sell advertising. But I really liked their graphs!image1

I just can’t imagine the moves in RBS, Barclays and Lloyds are justified.image2


Interesting about this one; GS has held up better than Morgan Stanley and BofA. So this isn’t about revenue from europe for US Banks. For the stock market it would be more pertinent to show leverage ratios or CET capital ratios of the banks versus the drop. I know I would be looking at the capital cushion when deciding whether to take aim at a bank.image4

Important addition:

CDS on June 27th (according to my source)

Credit Suisse Group
1Y = 111
5Y = 170
10Y = 202

1Y = 43
5Y = 82
10 Y = 121

Shows you that Credit suisse is double as dangerous as UBS. Or UBS is seen as really safe.

This one was aired later:


Makes me think we’re at or near the bottom!!!

SMI – no recession priced


Looking at the above chart and comparing the current move to what we saw in 2008 and 2009 I believe the reaction so far is much too weak to signal a bottom.

It’s more likely to be a drawn out process of sideways without negative news, then down on actual impact of heavy handed EU reactions.

Should the EU make Britain a good deal, then we’re off to the races again. But I would not consider that most likely, even though it would be best for the world economy. Sadly it wouldn’t be good for socialist or left governments, which is why I am afraid we’ll see them hurt their countries.

Why free movement of people (leading to work hotspots and countries) has to be one of the cornerstones of the EU when modern economies that can network their offices, use robots, telecommute, telework, etc, is  beyond my comprehension. But that’s politics. The charts (graphic form of what people think), tells me they are not expecting anything really negative in Switzerland and see the index as a safe haven.

We’re in year 1 of 3 years of growth trouble, is my current feeling. Even if the central banks can and will put a floor in asset depreciation. I’m not convinced they have a magic wand to improve profitability and dividends. They can prop up bonds and give them fairy price levels. And the SNB can fight CHF strength. But the SNB can’t save the EU on it’s own.