Performance

The performance, or profitability, of a capital investment is normally shown as a percentage. For example, if you deposit 100,000 francs as an initial investment and end the year with 105,000 francs, your investment’s performance would be 5%.

To find the performance, you would divide your profit (5000 francs) by the amount you invested (100,000 francs), which in this case would be 0.05 = 5%.

However, there are differences in the way profits are defined. Many wealth managers only deduct costs after calculating performance. In order to deduct costs before calculating performance, you will first need to determine the total costs charged by your wealth manager. Additional costs and fees may apply, depending on the investment type.

Example: Annual fees are equal to 1% of your invested capital. If your invested assets total 100,000 francs, you would pay 1000 francs in fees. If the pre-cost performance of your investment is 5%, then the post-cost performance of the investment would be 4% (4000 francs divided by 100,000 francs). So your total assets at the end of the year would come to 104,000 francs.

More on this topic:
Profits earned on a bond
Swiss private banking compared

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