ETFs in Pillar 3a: what Swiss providers really offer

1. What is an ETF in Pillar 3a?

ETF stands for Exchange Traded Fund, an exchange-traded fund that tracks an index as closely as possible. Instead of picking individual shares, one unit buys you all the securities in the index at once. That lowers both the single-stock risk and the costs.

Anyone investing passively in Pillar 3a, however, predominantly does not buy an exchange-traded ETF but an institutional index fund. Many providers therefore call their products "index-managed" or "passive pension funds". The difference is smaller than it sounds:

• What stays the same: Both track the same index passively, both spread across thousands of securities and both cost little.
• What differs: The index fund is not tradable on an exchange. In tied pension provision that plays no role, because you hold the capital until retirement and do not trade it continuously.

What counts for you is not the label but what sits underneath it: a passively tracked index at low cost. Both are investment funds and belong to the common investment products of Pillar 3a.

2. Which ETFs can I choose in Pillar 3a?

Individual ETFs are not freely selectable in Pillar 3a. How much room you have follows the type of provider:

• Banks and insurers: You choose from predefined pension funds with different equity shares, for instance 25, 45 or 75 percent. The indices behind them are set.
• Pension apps: You assemble your portfolio from individual index building blocks yourself and determine their weighting.

The building blocks are the same in both cases. Three of them are common:

• Global equities (MSCI World, MSCI ACWI): around 1'500 to 3'000 companies from developed and emerging markets. The broadest building block.
• Swiss equities (SPI, SMI): the home market without currency risk, but heavily concentrated on a few large corporations.
• Bonds: they dampen the swings but bring less return than equities.

The same indices are also available in sustainable variants, which filter companies by ESG criteria. The diversification stays similarly broad, individual sectors drop out.

The MSCI World, however, is less broadly diversified than its name promises. Around 70 percent of the index falls to US securities, a large share of that to a handful of technology corporations. Anyone relying on it alone carries a country risk and a currency risk. How high the equity share turns out in the end is decided by your investment strategy anyway, not by the choice of a single index.

3. What does an ETF in Pillar 3a cost?

It is not only the ETF fees that count, but the total costs of your 3a solution. They consist of up to three parts:

• Fund costs (TER): the ongoing costs of the index product, 0.2 to 0.5 percent per year.
• The provider's custody fee: for safekeeping the securities. With bank solutions it is charged separately, in the order of 0.3 percent per year.
• Transaction fee: some banks charge it on every purchase and sale. Anyone contributing monthly there pays it twelve times a year. Other providers do without it entirely.

Pension apps combine these parts into one flat total fee. With bank solutions you have to add them up yourself. The longer the term, the more strongly the costs come through.

Example calculation: You pay in the maximum contribution of CHF 7'258 for 30 years, at a 5 percent return before costs. What is compared is the total cost, not the fund fee alone.

Between the cheapest and the most expensive variant lie around CHF 56'000. The gross return is the same in all three cases. The difference comes solely from what is left after the costs.

How strongly the costs act in your case follows from the contribution, the term and the equity share. The wealth calculator lets you estimate that in advance. Which of the three cost components a provider charges and which it leaves out is set out in its fee schedule.

This article was first published on 06/05/2026