Interview with ETF expert Roger Bootz: «The trend towards passive investments is intact»

Mr. Bootz, what is the current demand for passively managed investment products in Switzerland?

In Switzerland, 278 billion Swiss francs were invested in ETFs as of the end of March. That’s more than 17% of all money invested in investment funds in Switzerland. Or 14% of the ETF volume in all of Europe. In Switzerland, equity ETFs account for 75% of the total ETF volume. This is certainly still due to the very low interest rate years of the past, when other asset classes were virtually yield-free. Since the beginning of 2025 and until April, the inflow of funds is almost twice as high as in the same period of the previous year. Passive investments continue to be in high demand.

What’s behind the strong demand for passively managed capital investments?

The trend towards passive investments remains unbroken. We see that institutional and professional investors such as private banks or pension funds are increasingly using such products for their investment concepts.

How readily do private investors turn to passively managed investments?

At Vanguard, we observe increasing interest from private investors. In Switzerland, the concept of savings plans is becoming increasingly established. For example, in 2024, Yuh, the joint venture of PostFinance and Swissquote, launched a savings plan offering. New brokers like Neon are now also offering ETF savings plans with very low or no transaction costs. Such developments contribute to the significant growth of the business.

What is commonly included in ETF portfolios?

In the equity sector, we can see that there is a trend away from the US. Instead, investors prefer to buy globally positioned products or those that primarily invest in Europe or Asia.

Vanguard offers several hundred ETFs or index funds. What are your personal favorites?

There are three that I really like. These are two equity funds and one bond fund. The first is the FTSE All World ETF. It invests broadly in the stock markets and invests in both the developed world and emerging markets. The second fund, FTSE All-World High Dividend Yield, focuses on dividends. This is the only fund where Vanguard moves at all in the direction of an investment theme. It is a generally popular fund in Switzerland. Third, from the bond world, a fund that replicates the Bloomberg Global Aggregate Index. These are the most important products for me.

And what thoughts should guide investors when considering buying such investment products?

We believe that investment success is defined by the right allocation of assets, i.e., the ratio of stocks to bonds. At Vanguard, a clear investment philosophy with four principles was defined decades ago.

What does it look like?

First, you need to set clear goals for your capital investment to maintain focus. They must match the investor’s personal risk-return profile and investment horizon. Second, one should not invest thematically, but as broadly diversified as possible. It is better to buy, so to speak, the entire stock market rather than trying to pick out promising individual stocks.

And the other two principles?

Third, markets cannot be influenced. Investment themes or preferences are always active bets. However, you can control the costs of your investment and should strive to keep them as low as possible. This leads to a focus on cost-effective ETFs that ideally replicate a broad market index. Over decades, this generates massive performance contributions. Fourth, you must be disciplined and remain invested. Market crashes like the 2008 financial crisis and the current volatility in the market should be weathered. The portfolio should also be regularly adjusted to the asset allocation defined at the beginning.