How are 3rd pillar investment strategies designed? 

To make your life easier, the app offers ready-made investment strategies. But you always have the final say. Find out how to choose and tailor your strategy to your profile, so you can build a secure future with peace of mind.

What are your investment options for your retirement savings?

When it comes to investing your 2nd or 3rd pillar assets, you have options. You can opt for a traditional savings plan or choose to invest in ESG funds. You can also combine the two and adjust your strategy at any time.

• For savings, Pilla offers a fixed-interest investment in Swiss francs, providing a predefined and stable return over a given period. This is the solution with the lowest risk and a clear long-term outlook.
  
• At Pilla, all investment funds are ESG funds. Unlike traditional funds, which base their selection solely on financial performance (revenue, profit, growth, etc.), ESG funds also incorporate “non-financial” factors to assess companies’ environmental impact (E), their management of social issues (S), and the quality of their governance (G).

ESG Funds: Our 5 Investment Strategies

Pilla offers 5 strategies tailored to different investment profiles. They consist of exchange-traded funds (ETFs), investment products that track the performance of a stock market index (such as the S&P 500, for example). This is a simple, hassle-free way to invest. Registered in Switzerland, these ETFs are globally diversified and cover stocks, bonds, and real estate.

How do you choose the right investment strategy?

The choice is yours. You don’t need to know the financial markets to grow your retirement savings. The strategies are diversified, designed for the medium to long term, and tailored to your goals.

To help you select an investment strategy that suits you, we recommend starting by assessing your risk profile: conservative, balanced, dynamic, growth, or capital appreciation. Based on the information you provide, Pilla will suggest a suitable investment profile. You can then compare the available strategies.
The maximum equity allocation is an important factor. The higher the percentage of equity exposure, the greater the potential return—and the more significant the short-term fluctuations may be. Of course, expected returns are a key factor in making your decision. It’s also wise to compare the fees charged by different providers, while keeping in mind that low fees do not necessarily equate to high returns.

What returns can you expect from different types of investments?

Traditional savings accounts offer returns of 0% to 1%, while third-pillar life insurance plans offer returns between 1% and 2%, but are often more expensive and less flexible. Historically, and although they are more volatile, mutual funds can generate returns of between 3% and 7%.

Thanks to index funds, such as those offered in the Pilla Selection Index ESG strategies, investors have access to professional, structured financial exposure that can potentially outperform individual, stand-alone investments.

Understanding and Comparing Fees

This is a very important and sometimes misunderstood topic. At Pilla, total fees are transparent and clearly displayed. They consist of management fees and the TER (Total Expense Ratio), which should be distinguished from one another.

• Management fees are deducted directly from your invested assets as a flat fee. They therefore do not apply to the cash portion of your portfolio. At Pilla, management fees amount to 0.5% per year.
• The TERs are the fees for the various funds that make up each investment strategy and are deducted from your returns. At Pilla, they range from 0.19% to 0.23% and depend on the selected investment strategy.

Don’t confuse low fees with returns

When comparing the solutions and fees offered by different providers, remember that low fees do not necessarily mean a better net return!
Let’s look at a concrete example by comparing Pilla to a competitor offering particularly attractive fees. This data alone could mislead you if you don’t take expected performance into account.

For a more realistic comparison, look instead at the historical net performance over 3, 5, and 10 years, the quality and diversification of the underlying funds, and the consistency of the strategy over time—including during market downturns.
At Pilla, our fees reflect the choices we’ve made: high-quality ESG funds, a platform designed to support you, and an approach built to last.

In summary, how to get started

Whether you choose to open a Pillar 3A account or transfer your Pillar 2 assets to a vested benefits account, always ask yourself these three questions before investing in the financial markets:

1. How far in the future will you need this money?
2. What is your risk profile?
3. What are your plans?

This will help you determine whether you prefer to preserve your capital with low risk (conservative), aim for more growth and long-term gains while accepting more risk (capital gains), or fall somewhere in between (conservative, balanced, dynamic, growth).

Pilla is here to help you optimize your financial planning and guide you toward a solution and strategy that’s truly tailored to your needs.