View Single Post
  #140  
Old 04.01.2017, 15:08
Meadow's Avatar
Meadow Meadow is offline
Senior Member
 
Join Date: Jul 2016
Location: Zurich
Posts: 270
Groaned at 6 Times in 5 Posts
Thanked 94 Times in 62 Posts
Meadow has no particular reputation at present
Re: Low cost Investment Funds in Switzerland

Quote:
View Post
I think it's also worth mentioning that 20% is the number you get after certain assumptions, which may not hold true long-term, and is generally on the high side.

e.g. at 5.5% rate of return at 30 years, 0.5% fee is 16.9% lost to fees
if the rate of return goes up, the fee is relatively less, so at 8%, it would be 16% flat.

If the fee goes down to 0.25% (splitting the difference between truewealth fees and the US provider ones), at 5.5% rate of return over 30 years, 7.8% goes to fees. I think quite a few people would be willing to pay that.
It's tricky. Be careful what you compare.

Investing $100, after 30 years:
  • with a return of 0.0% and a fee of 0.0% you will have $100
  • with a return of 0.0% and a fee of 0.5% you will have $86
  • with a return of 5.5% and a fee of 0.5% you will have $429
  • with a return of 5.5% and a fee of 0.0% you will have $498

With a return of 0.0%, the total cost is 14%.
With a return of 5.5%, the fee also takes away exactly 14%.
The rate of return doesn't matter. You need to compare how much would you have earned with and without fee.
Reply With Quote
This user would like to thank Meadow for this useful post: