The graph below illustrates the potential impact of costs on an investment of CHF 10,000 over a 30-year period. (This hypothetical example does not represent any particular investment.) The graph assumes 6% average growth per annum which is compounded year on year. As this shows, fund expenses of 0.3% compared to 1.2% could potentially lead to savings of CHF 11,943 over a 30-year period. Understanding the impact of costs on long-term returns is a key step towards investment success.
It is important to note that cost is not the only factor. This example assumes growth of 6%, but in reality, returns may vary and you may get a lower return from a fund with lower investment costs.
Growth of a CHF 10,000 initial investment over a 30-year period, assuming 6% growth per annum.
This hypothetical example assumes an investment of CHF 10,000 over 30 years. Annual compounding is used for both the assumption of 6% average growth per annum and the investment costs. Costs are applied to average annual growth of 6% for each year. As it is hypothetical, this example does not represent any particular investment. Source: Vanguard.
We believe that successful investing begins by setting measurable and attainable investment goals and developing a plan for reaching those goals. Keeping this plan on track means evaluating progress on a regular, ongoing basis.
There’s no reward without risk. This familiar lore is as true of investing as it is of anything else in life. You can’t control what happens in the markets, but understanding the historical patterns of equities and bonds can help you handle risk in your own portfolio and select the balance of investments that is right for you.
Although the asset allocation decision is one of the cornerstones of any investment strategy, it only works if you stick to it over time and through varying market environments.
Important information on investment risks
Investing involves risks. The value of the investments and the resulting returns may rise or fall, and investors may suffer losses on their investments.
Important risk information
Past average returns are no reliable indicator of future investment results. The performance of an index is not an exact representation of any particular investment, as you cannot invest directly in an index.
Important information
Vanguard Investments Switzerland GmbH only gives information on products and services and does not give investment advice based on individual circumstances. If you have any questions related to your investment decision or the suitability or appropriateness for you of the product(s) described in this document, please contact your financial adviser.
The information contained herein is not to be understood as an offer or solicitation to make an offer to buy or sell securities in any jurisdiction where such an offer or solicitation is unlawful, or to persons to whom such an offer or solicitation may not legally be made, or when the person making the offer or solicitation is not qualified to do so The information does not constitute legal, tax or investment advice. You should therefore not rely on the content when making investment decisions.
The information contained in this document is for educational purposes only and is not a recommendation or solicitation to buy orsell investments.
Published by Vanguard Investments Switzerland GmbH.
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