Swiss Investors Overestimate ETF Fees, Missing Out on Opportunities

Swiss investors are overestimating the fees associated with exchange-traded funds (ETFs), a misconception that’s preventing them from benefiting from this investment product’s advantages, including lower costs, accessibility, and diversification, according to a new study by the Lucerne University of Applied Sciences and Arts in collaboration with stock market app Finanzen.ch.

The study, which surveyed 3,460 adults in Switzerland in 2025, found that 58% of non-ETF investors and 28% of ETF investors believe that an ETF incurs annual fees exceeding 1%. However, Swiss ETFs typically cost only 0.3% on average.

This finding suggests an important misconception of ETFs, and indicates that a substantial portion of Swiss investors don’t accurately assess the cost advantages of these products compared to traditional investment funds. Consequently, this makes them less likely to consider ETFs in their investment strategies.

ETFs are investment funds that hold a basket of assets and trade on stock exchanges. They provide investors with exposure to a specific industry, investment category, country, or a broad market index. They may also offer exposure to asset classes beyond equities, such as bonds, currencies, and commodities.

ETFs are traded like stocks, offering flexibility and liquidity. Since they are passively managed, they tend to have significantly lower expense ratios compared to actively managed mutual funds, which face higher costs from management fees, accounting and trading expenses, plus load fees charged during purchase and sale.

Fees affect Swiss investment decisions

Fees play a crucial role in the decision-making process for Swiss investors. Survey participants were presented with a fictional investment product that offered an average annual return of approximately 7%, similar to the performance of the Swiss Market Index (SMI). Half of the respondents were shown a fee of 0.25%, while the other half were shown a fee of 1.75%.

Among respondents who invest in ETFs, the fee had a significant impact. When presented with the low fee, 92% of these investors approved of it. However, when presented with the high fee, this approval rate dropped substantially to only 54%.

Conversely, among individuals who do not invest in ETFs, the fee had little impact. The approval rate stood at 76% for the low fee, and 68% for the high fee, underscoring minimal influence on decision-making.

These findings indicate that experienced ETF investors are more sensitive to cost differences compared to less experienced investors. For less sophisticated investors, this oversight can lead to unnecessary high fees and reduced long-term returns. This also underscores that financial literacy plays a crucial role in investment decisions.

ETFs’ growth potential

These findings highlight the significant growth potential for the Swiss ETFs market if investors are adequately informed about the benefits and advantages of these products. They align with findings from other research.

BlackRock’s People & Money study, conducted with YouGov in 2025 across 15 European countries, estimates that 850,000 Swiss adults were very likely to invest in ETFs in the next twelve months. Of these, 310,000 were predicted to be new ETF investors.

When asked the reasons for choosing ETFs, 39% of Swiss ETF investors cited diversification, making it their top reason. This was followed by low fees (37%), ease of trading (35%), and the potential for better returns than cash rates or other investments (34%).

This is despite ETFs having already experienced significant growth over the past years. In 2020, only 17% of Swiss investors invested in ETFs, according to research by Swiss online comparison platform Moneyland.ch. By 2025, that proportion had surged to about 30%, according to a 2025 survey conducted by Swiss online wealth management firm Truewealth in collaboration with Dr. Michael Kendzia from the ZHAW School of Management and Law. This placed ETFs as the second most popular investment product in Switzerland, trailing behind shares with a penetration rate of 51%.

Featured image: Edited by Fintech News Switzerland, based on image by Mr.Mockup via Magnific

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