How does Selma determine the share going into Swiss companies?
Selma usually weights the investments in the growth part of your portfolio based on the size of the markets they represent. However, Swiss companies are treated differently.
The Swiss stock market only represents about 1-2% of the global stock market, but Selma assigns at least 8% to Swiss company shares by default – a choice known in finance as “home bias.”
Does it make sense to have a “home bias”?
In the case of Swiss companies, there are two main advantages to having a higher share:
Swiss companies are traded in Swiss francs (CHF)
This means you’re not exposed to currency swings from other markets. Since the Swiss franc is often seen as a “safe haven” currency, it tends to get stronger during global market turbulence. That can help stabilise your portfolio in difficult times.Swiss shares are more “defensive”
The major stock indexes of the world differ in their mix of companies. The Swiss market tends to have more companies that pay regular dividends, because their businesses are less sensitive to changes in the economy. In financial terms, this is called "defensive", and it can help shield your portfolio in times of financial market stress.
Both of these factors help make your portfolio more stable – and that can make it easier to stay invested long-term. Because we all know: Time in the market beats timing the market! 💪
Can I increase the share invested in Swiss companies?
Yes, you can! 🇨🇭
If you’d like a stronger focus on Swiss companies, just activate the Swiss bias investment preference. Selma will then assign a larger share of the growth part of your portfolio to Swiss company shares.
This setting is optional and can be changed at any time in your investment preferences.
Increasing the share in Swiss companies can especially make sense for pensioners who have withdrawn (parts) of their second and third pillar and don’t want to increase risk, as pension assets are heavily invested in Switzerland.
Can I decrease the share invested in Swiss companies?
At the moment, it is not possible to reduce the proportion of Swiss companies to less than 8%.