Is Selma's fee a good deal? Practical price example.

Updated 2 months ago by Niklas Linser

Investing fees are hard to understand. We're often asked how Selma's price differs from the complicated fees of a classical bank. Our transparent prices keep you safe from nasty surprises. Here's a real life example of why you need to be careful with offers that look cheap on the first glance.

Our client asked us to compare our offer with an offer he got from a Swiss bank. Out of friendliness, we will not publish this bank's name. The costs are not estimates, but real numbers found on bank's webpage and in its fund prospects.

  a. Selma     b. Example mutual fund
Investment amountCHF 10'000CHF 10´000
Annual management fee0.72 % (max)0.60 % (cheapest fund)
to 1.23 % (most expensive fund)

Beware of the small print
The costs are depended on the fund.
They may increase to max 2% – 3 %.
Product's own costs0.22 % (average)0 %
Transaction fee0 %Beware of the small print
Transaction costs not included
* This is  what was written on the bank's page: "Die Total Expense Ratio’ (Gesamtkostenquote) zeigt an, welchen prozentualen Anteil des Nettovermögens die Kosten bei einem Fonds pro Jahr ausmachen. Als Kosten gelten dabei alle Aufwendungen gemäss Erfolgsrechnung, einschliesslich Management-, Verwaltungs-, Depot-, Revisions-, Rechts- und Beratungsgebühren. Nicht berücksichtigt werden die Transaktionskosten im Fonds."
a. Selmab. Example mutual fund
Asset based fee0 %       1 % 
Exit fee0 %Specific information missing
Read the contract carefully!
Swiss stamp dutyincludedca. 0.15%
Swiss tax statement includedCHF 10 per fund, min. CHF 25 + VAT
Deposit costs 0 %Minimum CHF 90 / year
Total costs
94 CHF / year
That is 0.94 %      
290 – 353 CHF / year *
That is ca. 2.9% – 3.53%
in the first year.
* Unfortunately, we couldn't calculate the costs precisely, because of the unclear transaction costs.

What does that mean in practice?

Let's assume you would earn a stable 5% return on your initial CHF 10'000 investment every year . 

After 15 years, in 2032, once robots have taken over the world and Elon Musk has built a Hyperloop from NY to Paris, this is where you stand: 

A. Selma

B. Mutual Bank

Initial investment

10’000

10’000

Return on investment5%5%

costs in the first year

0.94%

2.90%

running costs0.94%1.90%

Account balance  in 15 years

+ 18'165.90

+ 15'650.05

Profit in 15 years

8'165.90 CHF

5'650.05 CHF

Because of the compounding costs the difference is staggering  2'515.90 CHF. It's  25.16% of your initial investment!

How did we do?