"We are offering institutional-quality management in a exchange-traded format"

Manuel Fuchs
Invesco Schweiz, Head of Wholesale/ETF Distribution

 

Passive investments continue to gain ground in Switzerland too. How long will this growth last?

We are only at the beginning – particularly when it comes to fee-free ETF savings plans. The market is becoming increasingly mature: institutional investors are, almost without exception, structuring their core allocations on a rule-based basis in order to optimise costs. Switzerland is following, with a slight delay, a trend that is gaining momentum across Europe.

Active ETFs are currently the big trend: will they replace traditional ETFs?

I do not see active ETFs as a replacement, but as a logical evolution. Whilst passive ETFs form the backbone for cost-effective access to market beta, active strategies within an ETF structure allow for targeted alpha generation. Investors appreciate the combination of the flexibility of active management with the liquidity and cost-efficiency of the ETF structure. In the long term, both segments will coexist and each play specific roles in portfolio allocation.

Active ETFs have a higher expense ratio: do the advantages outweigh the cost disadvantage compared to traditional ETFs?

The decisive factor is the cost-benefit ratio at the level of net performance. Active ETFs utilise the highly efficient ETF structure to make active alpha accessible on significantly more attractive terms than traditional retail funds. We are essentially offering institutional-quality management in a liquid, exchange-traded format. In a market environment where pure index tracking is reaching its limits, the added value justifies this marginal premium for many investors.

What other product trends do you see?

We are currently seeing very strong interest in fixed-income ETFs, as investors reposition their bond portfolios following the shift in interest rates. In addition, ‘equal weight’ strategies are gaining in importance as a way of counteracting concentration risks in highly concentrated indices such as the S&P 500. Thematic investments and innovative ESG approaches also remain relevant, with the focus here clearly on substance and transparent strategies.

For a long time, the rise of ETFs passed Swiss retail investors by. Now, however, their market share stands at 20%. What has changed among clients?

The Swiss retail market has embarked on an impressive catch-up, driven by improved access, greater financial literacy and, above all, the availability of fee-free ETF savings plans. Modern digital platforms and online brokers have massively lowered the barriers to entry, making ETFs easily accessible to independent investors. At the same time, there is a greater focus on net performance. We are seeing a generation of investors who value transparency and take personal responsibility for building their wealth.

How is Invesco positioning itself in Switzerland in the face of fierce competition, both in the active and passive sectors?

We deliberately focus on innovation rather than simply maximising volumes. What sets us apart is our technical expertise and products that offer measurable added value. Our strength lies in combining the global expertise of one of the largest asset managers with bespoke local service.

How is your distribution team structured and how do your sales channels operate?

Our team adopts a consultancy-based approach. We work closely with institutional clients and intermediaries, placing a strong emphasis on professional dialogue with portfolio managers. Digital interfaces help to enhance the quality of our service. This structure enables us to respond flexibly to the evolving needs of the Swiss wealth management industry.

Which specific client needs are currently at the top of the agenda?

At the top of the agenda right now is the search for effective diversification in an environment of volatile markets and geopolitical uncertainties. Many clients are specifically asking for solutions that offer protection against inflation risks or generate stable returns in the fixed-income sector. In addition, demand has risen for bespoke solutions that are precisely tailored to Switzerland’s regulatory and tax framework.

Which developments in the Swiss asset management industry do you perceive most strongly?

I am observing increasing professionalisation in the use of ETFs within discretionary mandates, where they are being used more and more frequently as tactical and strategic tools. At the same time, margin pressure in the industry is leading to consolidation and forcing providers to optimise their value chains. Digitalisation is also changing the way investment advice is provided, opening up new opportunities for scalable ETF solutions. Overall, the industry is becoming more transparent and client-focused, which I view as a very positive development.

What goals have you set yourself in your role?

My goal is to further consolidate and expand Invesco’s position as the leading provider of innovative ETF strategies in the Swiss market. We want to be the first port of call for clients when it comes to intelligent additions to traditional portfolios. This also involves actively shaping the dialogue on the benefits of active ETFs and specialised fixed-income solutions.