Balanced Portfolios FAQ

What is SaxoSelect?

SaxoSelect is a fully digital and automated investment service that enables clients to follow the strategy of an expert manager.  Trades of such expert manager are copied automatically on behalf of the client with minimum latency.

When you decide to invest in a SaxoSelect strategy, a new sub-account in the currency of the strategy will be created and the investment amount will be transferred from your default account to the sub-account. 

Balanced Portfolios

Balanced Portfolios for the long term investors containing portfolio of Stock and Bond ETFs built on BlackRock research. These portfolios offer attractive investment opportunities and are also ideal as repositories of funds used for margin trading, where a percentage of the value of the portfolio’s investments can be used as collateral for trading margin products such as FX, CFDs and futures.

How do I get started?

You simply choose the portfolio that fits your investment goal best, log in to your SaxoTrader, complete the short online suitability process, sign the portfolio management agreement and decide how much you want to invest. Investments will be processed and implemented in real time, in front of your eyes.

The portfolio will be rebalanced automatically on a regular basis to keep the portfolio in line with your chosen risk level of the strategy.

Where can I monitor my Balanced Portfolio?

You keep full control and visibility of your Balanced Portfolio.

When you allocate an investment amount to a Balanced Portfolio, Saxo Bank creates a dedicated sub-account for the respective strategy. This sub-account works as a folder under your existing SaxoTrader account.

You will be able to monitor investments on behalf of such sub-account and to increase or decrease funds allocated to such sub-account at any time. Please be aware however, that each strategy has a certain investment horizon.

What is a Balanced Portfolio made of?

Balanced Portfolios are built with exchange traded funds (popularly known as ETFs).

An ETF combines the benefits of a fund and a stock. Like a fund, an ETF invests in a collection of bonds, stocks and/or other asset classes. Like a stock individual ETFs can be bought or sold throughout the day as long as the market is open.

Holding a sufficient number of individual bonds and stocks to build a well-diversified portfolio requires a large investment. But with ETFs, Balanced Portfolios investors can have a cost-efficient and well-diversified solution without the need to commit a large amount of capital.

What does it cost?

For the provision of the SaxoSelect Balanced Portfolio service, Saxo Bank (Switzerland) Ltd. (the „Bank“) applies a service fee equal to 0.85% per annum. This fee is calculated on the closing value of the assets under management at the end of each day and is due at the end of each quarter in the reference currency of the client.

The Bank does not charge securities trading commissions when setting up or when rebalancing the portfolio. Furthermore, the Bank does not apply custody fees, reporting fees, inactivity fees or apply minimum ticket fees to the portfolio. Funding is free of charge as well. The client will incur a currency conversion fee (0.5% of the transaction amount) for those trades inc ollective investment schemes (i.e. ETFs) denominated in currencies other than CHF. Other fees and charges (e.g. stock exchange fees, VAT, stamp taxes) are charged as they occur. There are additional costs charged directly to the ETFs used for the implementation of the Balanced Portfolio. Information on the total cost for the management and operation of the ETFs, i.e. information on the Total Expense Ratio (TER), can be found in the fund documentation, which is available on the Bank’s website or on the client trading platform under the category “SaxoSelect”.

What are iShares exchange traded funds?

Saxo Bank has chosen to build its Balanced Portfolios with iShares exchange traded funds from BlackRock.

iShares is a global leader in exchange traded funds with more than a decade of expertise and commitment to individual and institutional investors of all sizes. With over 700 funds globally across multiple asset classes and strategies and more than $1 trillion in assets under management as of 30 June 2016, iShares funds help clients around the world build the core of their portfolios, meet specific investment goals and implement market views. iShares funds are powered by the expert portfolio and risk management of BlackRock, trusted to manage more money than any other investment firm.* 

(*Based on $4.890 trillion in AUM as of 30 June 2016)

What is an expense ratio?

Unlike stocks an ETF has embedded costs. These costs consist primarily of management fees and additional expenses, such as trading fees, legal fees, auditor fees and other operational expenses. 

Since a Balanced Portfolio is a collection of ETFs we publish a weighted average expense ratio to express the cost already embedded in the building blocks (ETFs) of the Balanced Portfolio. The weighted average Expense Ratio may change from time to time. Saxo Bank’s Service Fee is calculated separately and is not contained in the weighted average expense ratio (please refer to the above section for Saxo Bank charges).

Can I try a Balanced Portfolio in a demo environment?

Unfortunately, the service is not available as a demo.

Can I stop my investment at any time?

You can stop following a strategy, i.e. the management in relation to a strategy at any time by simply pressing on the “Stop” button next to the strategy in your SaxoTrader platform.

When you decide to stop investing, you will be given the choice of either keeping your existing positions or closing or selling all positions which is the default option. If you decide to close all open positions at this stage, market orders will be generated. Should the underlying markets be closed these orders will be executed as soon as the markets re-open.

Please be aware, that if you decide to keep positions it is your own responsibility to manage them at all times. You will have to close the positions yourself after you have clicked the “Stop” button.

If I have terminated management in relation to a strategy, can I restart?

You may reactivate your management in relation to a strategy by using the “Restart” button. You will be required to confirm that your financial situation has not materially changed since you last invested and you will need sufficient funds available to cover the minimum investment required.

Can I sell single positions in my Balanced Portfolio?

As long as your funds are being managed in relation to a strategy, no single positions can be sold.

This would jeopardize the investment goal of the strategy, i.e. the following of the strategy of the professional manager.

What is the Balanced Portfolio page?

This page provides an overview of the past performance generated by the Balanced Portfolio in a real money account funded by Saxo Bank and similar to any investor account. Please be reminded that past performance is not necessarily indicative of future performance.

How is performance of the Balanced Portfolio calculated?

The performance will be calculated as time weighted performance. This is an industry standard for comparison of performance of portfolio managers. The time-weighted performance shows the performance for the period to be measured and is not sensitive to contributions or withdrawals. 

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