Residential property prices in Switzerland - 1st quarter 2017

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• The UBS Swiss Real Estate Bubble Index remained in the risk zone at 1.39 points in the first quarter of 2017 following a moderate increase.

• The increase in home prices outpaced the increase in rents and income.

• Demand for buy-to-let investments also rose, in spite of heightened market risks.

The UBS Swiss Real Estate Bubble Index remained in the risk zone in Q1_2017 at 1.39 index points. The index increased moderately over the slightly revised figure for the previous quarter. The rise was driven mainly by a slight acceleration in nominal price increases for owner-occupied homes amid stagnant rents and income. Demand for buy-to-let investments rose as well. Buy-rent ratio deteriorates further Stagnant rents caused the buy-rent ratio to deteriorate for the tenth time in a row in Q1 2017. At the same time, the percentage of loan applications received by UBS for properties not intended for personal use experienced another slight increase. This can be explained by the fact that buy-to-let investments can produce high returns on equity if they are highly leveraged. Given the continued large number of building permits, it seems likely that construction activity will remain (too) strong in this current year. We estimate that the construction of new apartments will exceed the additional demand for apartments by approximately five to ten thousand units this year. This should keep rents on a downward trajectory, particularly for new apartments. In other words, life is about to get even more difficult for landlords. Investor demand for owner-occupied homes is primarily attributable to the entrenched expectation that interest rates will remain low. However, a rate increase would most likely bring strong demand for buy-to-let investments to an abrupt halt.

Regional analysis The Geneva, Nyon and Morges regions are in a correction phase. Local owner-occupied housing markets have already cooled in these regions. In the past three years, price corrections in Valais, Bernese Oberland and parts of Grisons mean that there are no longer tourist regions on the risk map. The regional risk focus is gradually shifting from Lake Geneva to the regions of Zurich and Central Switzerland.

Methodology The regional risk map shows those regions posing the greatest macroeconomic risks in the event of a Swiss-wide correction. The analysis is based on the population size, the price level and the price behavior for owneroccupied homes.

Chief Investment Office WM | 5 May 2017 | Translation: Matthias Holzhey, economist, Claudio Saputelli, economist, Maciej Skoczek, CFA, economist, Source UBS.

Swiss National Bank : economic and monetary conditions update

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Interest on sight deposits at the Swiss National Bank remains at 0.75% below zero, policymakers said on Thursday. They also decided to leave the target range for the three-month Libor (London Interbank Offered Rate) unchanged at between 1.25% and 0.25% under the neutral level. The central bank reiterated it will "remain active in the foreign exchange market as necessary," willing to intervene to ease upward pressure on the franc.

The inflation outlook was slightly dampened. After 0.3% this year, the main gauge is expected in 2018 at 0.3% or 0.1 percentage points less than what was estimated in March. The rate-setters took the forecasted rate also 0.1 points lower for the year after that, to 1%. Growth in 2017 is still expected to reach 1.5%.

"In the first quarter, growth in mortgage lending remained constant at a relatively low level, and momentum in residential real estate prices continued at a measured pace. At the same time, owing to developments in fundamentals and the generally subdued activity on the mortgage and residential real estate markets, imbalances have fallen slightly in recent quarters. Nevertheless, they are still just as pronounced as they were in 2014, when the sectoral countercyclical capital buffer was set at 2%," the statement said.

Largest component of household Wealth - USA vs China

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SWISS PROFILINVEST has been a long-term advocate of assets diversification through financial and real assets.

For information or advice, please contact : This email address is being protected from spambots. You need JavaScript enabled to view it.


Fin vs Real Investments 05.2017




Would you invest in a US biotechnology company... ?

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Would you invest in a US biotech company... ?

- with a 2017E P/E of 6.4x and a debt/equity ratio of 1,29

- paying a dividend yield of nearly 2.8 %

- its current book-value is estimated at 4.6x

- its EBIT margin at 58 % and net margin at 44 %

- its cash-flow and its free cash-flow are largely positive


Please meet one of our Partners to be informed of the latest investment opportunities. 

During a meeting, we will define your investment and your risk profile as to suggest the best solution according to your affinities and needs.

For contact : This email address is being protected from spambots. You need JavaScript enabled to view it. 


CHRISTIAN DIOR shares : another new M&A

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Do you hold CHRISTIAN DIOR shares ?

In the past, Christian Dior shares were traded at a discount compared to LVMH shares due to a less liquid market in the former share. Holding Christian Dior shares was attractive because you held the Dior Couture brand also.

Now, the consolidation will suppress the difference and the gap between them. After its share price jump, clients will cash in a nice profit !

The main features of the project are the following:

  • The public offer values each Christian Dior share at €260;
  • It represents a premium of 14.7% over the closing share price as of April 24th, 2017 and 18.6% over the 1-month average share price;
  • This public offer values Christian Dior at its Net Asset Value;
  • The acquisition of Christian Dior Couture allows its integration within LVMH;
  • Christian Dior is among the most iconic brands worldwide and benefits from a high growth potential;
  • Christian Dior Couture's enterprise value of €6.5bn represents a 15.6x EBITDA multiple;
  • It ensures the regrouping of the entire Dior brand, further enhancing synergies between Christian Dior Couture and Parfums Christian Dior;
  • It will be accretive to LVMH earnings per share from the first year;
  • These transactions demonstrate the greater commitment of the Arnault Family Group;
  • They result in a simplification of the structures.

Feel free to contact : This email address is being protected from spambots. You need JavaScript enabled to view it. to get a Partner that will fit your needs and your interests. We will help you to find it.

US Prime Working-Age Population near 2007 Peak

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Two articles about demography.

The prime working age population peaked in 2007, and bottomed at the end of 2012. As of May 2017, there were still fewer people in the 25 to 54 age group than in 2007.

At the beginning of this year - based on demographics - it looked like the prime working age (25 to 54) would probably hit a new peak in 2017.  

However, since the beginning of the year, the prime working age population has declined slightly.

Changes in demographics are an important determinant of economic growth, and although most people focus on the aging of the "baby boomer" generation, the movement of younger cohorts into the prime working age is another key story. Here is a graph of the prime working age population (25 to 54 years old) from 1948 through May 2017.

Note: This is population, not work force.

Prime Working Age Populaton

There was a huge surge in the prime working age population in the '70s, '80s and '90s.

The prime working age labor force grew even quicker than the population in the '70s and '80s due to the increase in participation of women. In fact, the prime working age labor force was increasing 3%+ per year in the '80s!

So when we compare economic growth to the '70s, '80, or 90's we have to remember this difference in demographics (the '60s saw solid economic growth as near-prime age groups increased sharply).

The good news is the prime working age group should start growing at 0.5% per year - and this should boost economic activity.  


By: Calculated Risk | Wednesday, June 7, 2017 at 03:59 pm EST


Would you use a Robo-Advisor for your investments ?

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Pros & Cons of Using a Robo-Advisor

By Barbara A. Friedberg | Updated April 11, 2017 — 11:07 AM EDT

Robo-advisors are shiny new investment platforms. But what are their advantages and disadvantages? Can all digital financial advisors be painted with a broad brush?
Robo-advisors differ from brokerage to brokerage. The catch-all term includes a class of investment managers and software that uses complicated computer algorithms to administer your investment portfolios. Some robo-advisors are completely automated while others offer access to human assistance as well. Regardless of the model, they all provide customer service to assist you through the process.
The robo-advisor's' overriding assertion is that each company’s proprietary algorithm claims to take the emotion out of investing and will grant the investor better returns for a lower cost than traditional financial advisors. Yet, each advisor can’t have the ‘best’ proprietary algorithm. Let’s look under the hood at the pros and cons of using a robo-advisor.
We’ll start with the cons first and finish up with the advantages of this new and ever-expanding class of investment management.
Cons: What's Wrong with Robo-advisors?
1. They Aren’t Personalized: You’re more than just an investment portfolio. You have many goals, both for the near and long-term. While many robo-advisors now allow you to set and edit your goals using their financial planning software you also have money related issues and concerns which may benefit from a chat with a human being.
Most (although not all) robo-advisors will not hold your hand and talk you off the ledge after a significant market drop. The human financial advisor is there to assuage your fears and explain how the investment markets work. A financial planner works to integrate your finances, taxes, and estate plans. The advisor’s office may have a diverse pool of advisors to help with many aspects of life beyond just ‘money' concerns.
If you want to sell call options on an existing portfolio or buy individual stocks, most robo-advisors won’t be able to help you. There are sound investment strategies that go beyond an investing algorithm. Sophisticated and newbie investors may want a broader investment portfolio with a wider range of asset classes than the typical robo-advisor offers.
2. They Falsely Bash Advisors’ Price Schedules: It’s true that most robo-advisors have low price schedules, but not all. It’s not true that all financial advisors are expensive. There are financial advisors who charge approximately 1.0% of assets under management (AUM) for their services. This fee compares to several robo-advisors.
There are other advisors who will charge an hourly or fee for service. This practice gives the consumer a chance to control costs while receiving more personalized information. The newer ‘web-based’ personal advisors can forgo the cost of a fancy office and serve you personally via web-chat for lower fees. Additionally, there are advisors that ‘lease’ robo-advisors’ platforms and combine them with their own advisory services, thereby cutting fees and charges.
3. Falsely Claim There’s No Place for the Little ‘Guy or Gal’: There are financial advisor alternatives for those without big bucks or those just starting out. The XY Planning Network is a fee-only financial planning collection of advisors with an affordable monthly fee structure. The XY Planning Network advisors also cater to a younger clientele.
A fee-for-service advisor will put a cap on the client’s charges. Trade infrequently with an advisor paid by commission, and your costs can remain low. With the multitude of financial advisors, there are pay models and investment approaches to fit every type of investor.
4. No Face-to-Face Meetings: If you want to sit across the desk of your advisor, then a robo-advisor isn’t for you. The robos don’t have an office where a client walks in and talks directly to an advisor. This type of personal contact is relegated to the traditional financial advisory models. If you’re someone that wants a personal and in-person relationship with your financial advisor, then most robo-advisors aren’t for you. (For more, see: Can You Really Trust a Robo-Advisor?)
Pros: What's to Like about Robo-advisors?
1. Low Fees: Prior to the introduction of the robo-advisor platforms, investors were lucky to receive professionally managed investment assistance for less than 1.0% of assets under management (AUM). The robos have significantly changed that paradigm. From a cost of zero for Charles Schwab Corp.'s Intelligent Portfolios to 0.25% for a Betterment portfolio (after the first free year), there are many low-cost robos to choose from. Wealthfront and Betterment's models favor the cost-conscious consumer.
2. Nobel Prize-Winning Algorithms: Betterment and many of the robo-advisor’s algorithms rely on Nobel Prize-winning investment theory to drive their models.
From, “When the Nobel committee announced last month that Eugene Fama and Robert Shiller would share this year’s prize for economics, it was a great moment for their research in the field of investing—and validation for Betterment, which relies on many of their insights.”
In general, best practices investment theory strives to create an investment poThe Bottom Line
The robo-advisory sphere is just getting started. The new entrants into the landscape benefit the consumer by lowering fees while contributing many paths to professional asset management. As with any life choice, the investor should figure out what type of investment guidance he or she needs and select a robo-advisor or financial professional to suit their individual style.
rtfolio with the greatest return for the smallest risk. From 1990 Nobel Prize winner, Harry Markowitz to 2013 Fama and Shiller winners, the robos use cutting edge investment portfolio research informed by these luminaries to drive their products.
2. Access to Robo-Advisor Services Through a Financial Advisor: It’s becoming more common for traditional financial planning practices to ‘white label’ robo-advisors’ platforms for their clients. This takes the cumbersome task of choosing assets out of their hands so that the financial advisor may spend more time with their clients addressing individual tax, estate, and financial planning issues.
In the Dec. 23, 2014, Advisor Perspectives article, “Three Reasons Why Robo-Advisors are a Huge Benefit to the Advisory Profession,” Bob Veres cites Betterment, Motif, and Trizic as robos with ready-made portfolios available to the advisors. Jemstep also white labels its platform for advisors. This trend gives the consumer an opportunity for lower cost investment management while retaining the personal touch of an advisor.
3. Expanding the Market for Financial Advice: Some consumers, younger investors or those with lower net worth, may not have considered professional financial advice. The robo-advisors are growing the existing market of financial advisory clients. Because of the easy access and lower fee models for prThe Bottom Line
The robo-advisory sphere is just getting started. The new entrants into the landscape benefit the consumer by lowering fees while contributing many paths to professional asset management. As with any life choice, the investor should figure out what type of investment guidance he or she needs and select a robo-advisor or financial professional to suit their individual style.
ofessional financial management, more consumers may choose robo-advisors’ professional management in lieu of the DIY model. (For more, see: Are Robo-Advisors a Good Idea for Young Investors?
4. Robo-advisors Aren’t One-Size Fits All: There are low-fee robo-advisors for different types of clients. For example, if you’re interested in a certain sector or investment theme then Motif’s 151 existing portfolios offers a platform for you. Motif excels at giving their users many idea-based portfolios - there’s a ‘shale gas’ portfolio and even a ‘fight fat’ offering for investors interested in the weight loss providers. The caffeine portfolio culls coffee-related companies for you, mentioned Bob Veres. If your primary concern is rock bottom fees, there are several robo-advisors with broadly diversified low-fee ETF portfolios.
Some robo-advisors claim rebalancing and tax loss harvesting in their arsenal. There are single approach and hybrid style robo-advisors. Other’s such as Rebalance IRA and Personal Capital have higher barriers to entry with respectively, $100,000 to recently lowered $50,000 minimum entry fees. That said, even the robos with high entry requirements are more accessible than the finThe Bottom Line
The robo-advisory sphere is just getting started. The new entrants into the landscape benefit the consumer by lowering fees while contributing many paths to professional asset management. As with any life choice, the investor should figure out what type of investment guidance he or she needs and select a robo-advisor or financial professional to suit their individual style.
ancial advisors with $1 million portfolio minimums.
5. Low Minimum Balances: It’s a boon for investors with a small net worth to get professional robo-advisory management. Zero minimum balance technology enhanced robo-advisors include Folio Investing and Wise Banyan. Betterment has no minimum balance as well. Other robo-advisors are accessible with $1,000 to $5,000 to get started. And Personal Capital is free for those interested in access to portfolio monitoring, with the higher balance tiers reserved for exposure to a dedicated financial advisor.
The Bottom Line
The robo-advisory sphere is just getting started. The new entrants into the landscape benefit the consumer by lowering fees while contributing many paths to professional asset management. As with any life choice, the investor should figure out what type of investment guidance he or she needs and select a robo-advisor or financial professional to suit their individual style.

Demographics will decide the world’s history

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Demographics will decide the world's history within the next decades. 2045 is the year in which, as the U.S. Census Bureau projects, Whites will become a minority in their own country. The same trend is observable in Europe. In the eighties these continents began their transformation from relatively monolithic into multi-ethnic or multicultural societies, which resulted in a rapid increase in the US Latino population, and the influx of immigrants from Africa and Asia into Europe. 

The native European population growth will soon reach its peak and then the reverse trend, already observable in Russia and Poland, will set in. The population of the Netherlands and Germany is only expanding due to the rising number of second generation non-Western migrants. In no time (historically speaking) will the European ethnic composition resemble that of Brazil or India.

The unprecedented rise of Front National, the riots in the Banlieu, the first Turkish party in the Dutch Parliament, Islam-driven terrorism, the Black Lives Matter movement and the endless discussions in the Western media between multi-cultural opponents and proponents, Whites and non-Whites, Islamists and Christians are just a few pieces in the broader picture, and we expect much more to come.

Significant demographic changes are by no means restricted to Europe. The population of Africa, which is likely to keep on growing at the current unprecedented pace till 2100, is already outnumbering that of Europe, and India’s population will outnumber that of China, which will be at its peak in 2030. In 2100 Africa will make up 40% of the world’s population, while contributing close to nothing to the world’s GDP. Africa’s GDP is only 2% of the World’s total GDP.

Far more people will live in Africa and South Asia than in Europe and North America. A neoliberal economist’s take on this phenomenon is that we are all the same, replaceable human beings, irrespective of race, heritage, or religion, hence there is no reason to believe why Africans should not be as productive as the Japanese and as efficient as Germans. If such is the case then the shrinking populations of Europe, Japan, the US and China will be compensated for by Africa’s young, energetic, vibrant men and women who will, they say, successfully take over and handle the world’s growth engine.

A cursory look at the condition of those American cities with African-American majorities, Haiti or African states does not raise such high hopes, which is why our team holds a different view. Sub-Saharan Africa’s recorded history started about a hundred years ago, hand in hand with the beginning of the European colonization, which shows that even African historical consciousness has been shaped by Europeans, to say nothing of the continent’s economy, which continues to be dependent on the technical and financial support from Europe and China. The approaching shift in demographics will create ethnic tensions, and will have a profound impact on the world’s economy at large.

Article published by Gefira on May 5th, 2017

U.S. Renewable Energy Won’t be Derailed on Ending of Clean Power Plan

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energy costs 04.2017


U.S. Renewable Energy Won’t be Derailed on Ending of Clean Power Plan

President Donald Trump’s signing last Tuesday of an Executive Order to effectively nullify the U.S. Clean Power Plan signals the new administration’s support for the coal industry and intention to turns its back on Obama-era climate change efforts. However, the move “won’t derail U.S. decarbonization” due to the plummeting cost of renewable energy and the decreasing profitability of coal power, according to BNEF.

While repealing the bill is deeply symbolic, and spells concern that the U.S. may pull out of the 2015 Paris climate agreement altogether, it will likely have little impact on the U.S. renewable energy industry. The cost of wind and solar farms has dropped significantly in recent years, to the extent that these technologies can now compete with fossil fuel plants on price. Energy generated from the sun and wind accounted for more than half of the new capacity added to U.S. grids in the past two years. In addition, the low price of natural gas is driving down the price of electricity and forcing record numbers of aging coal plants to close.

Crucially, the federal tax credits for wind and solar power, coupled with state laws requiring that utilities source a certain portion of their electricity from renewables, play an important role in fueling the growth of the industry.

“As long as you have the tax credits, you should continue to see solid growth of renewables over the next three to four years,” Ethan Zindler, a senior BNEF analyst in Washington, said in an interview with Bloomberg News.

Even without the Clean Power Plan, BNEF forecasts that wind and solar energy will grow by some 51% in the U.S. over the next three years. Among the plethora of clean energy deals struck in the past week was $59.8 million in loans arranged by GCL New Energy Holdings for an 84.5-megawatt portfolio of solar projects in North Carolina, and First Solar’s sale of a 250MW solar PV plant in Nevada to a unit of Capital Dynamics, the Swiss asset manager.

Nevertheless, President Trump’s move last week to cancel policies quantifying the damage from carbon pollution and regulating methane emissions on federal land are a setback to environmental protection measures in the U.S.

“This is not the time for any country to change course on the very serious and very real threat of climate change,” said Erik Solheim, executive director of the United Nations Environment Program, quoted in the New York Times. “The science tells us that we need bolder, more ambitious commitments.”

There are concerns that last week’s Executive Order puts the U.S. on a path to miss its commitment to cut CO2 emissions 26% from 2005 levels by 2025, agreed at the COP21 negotiations in Paris two years ago. And that this in turn could embolden resistance to climate action in other countries.

Article from Bloomberg News as of 05.04.17