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Old 03.08.2021, 21:40
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Re: AXA SmartFlex Pillar 3a package - any good?

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...c. 6800 CHF into VIAC about a year ago, and this is already 9370 CHF - a return of 37.3%. ...The Axa investments appear to have given a 2 year return of 13-16% ... This is very poor, and way behind the market.
That's a pretty misleading comparison and statement, comparing a single 12 month vs single 24 month during such a volatile period as the past 18 months. And the statement that a 2 year return of 13-16% is "very poor" would be nonsense in normal circumstances. What was AXA over the same period as your investment ? (BTW - I invested in a UBS fund in March 2020 and made nearly 60% to date, but I wouldn't use that one-off almost by chance timing as a comparator to judge other investments, such as your measly 37.3% - very poor )

To the OP. Firstly, you state you don't need the disability insurance, but are attracted by the premium waiver insurance - no, if you don't need the disability insurance, don't pay for it then you won't need the premium waiver insurance.

I thought the main point to avoid such pillar 3a from insurance companies as has been observed on this site many times is not primarily the return, but the 'lock in'. If you had a need to close the account early (e.g. leaving switzerland, use for mortgage etc.), you are likely to get back less than you paid in regardless of the fund performance.

Such a scheme has similarities to 'endowment mortgages' that used to be popular in the UK. These were insurance based investment schemes that included some life cover and aimed to pay off a mortgage after maybe 25 years. However, if you cashed in during the first 8-10 years you find most of what you paid in the early years has been in fact paid out in fees, largely to the nice representative that convinced you to sign up and your investment is worth less than the cash you paid in.

In addition (with the endowment scheme), every month the money paid in is used to buy some fund units (at a premium to the actual value), they then take some of those units and sell them again (at a loss to the actual value), making themselves a nice return, in order to pay fees (to themselves).

I was one lucky punter whose endowment mortgage has just matured after 25 years - my investment yielded an average of around 3% pa and fell short of the target value by about 20%. Luckily i paid off the mortgage 15 years ago and wrote this off as a serious investment.

Ask yourself why the nice man from AXA is so keen...

Disclaimer, I know nothing of the AXA product, the above is semi-informed assumption (but I bet i'm right).
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