Comparison of swiss neobanks Neon and Yuh for ETF investments

Swiss neobanks are continuously innovating in the investment space, offering increasingly attractive and accessible options for investors. Among the leading players, Neon and Yuh stand out with their ETF (Exchange-Traded Funds) investment offers. However, Yuh seems to take the lead thanks to its flexibility and advanced features, which are ideal for investment strategies like the core-satellite approach. In this article, we’ll explore the key points that differentiate these two neobanks and explain why Yuh is the better option for investors seeking both automation and reactivity.

Overview of Neon and Yuh: origins and values of swiss neobanks

Neon is an independent Swiss neobank launched in 2019. It partners with Hypothekarbank Lenzburg to offer simplified and affordable banking services. Initially focused on free current accounts, Neon recently expanded its offering by introducing an automated ETF savings plan, positioning its product as an accessible solution for beginner investors.

Yuh, founded in 2021, is a joint venture between PostFinance and Swissquote. This strategic partnership combines the financial strength of PostFinance with Swissquote’s expertise in investment. Yuh emphasizes flexibility, automation, and reactivity, making it an ideal solution for modern investment strategies like the core-satellite approach.

Comparison of investment features: Neon vs. Yuh

1. Investment automation: advantages of fractional shares and programmed purchases

One of Yuh’s main strengths is its ability to automate ETF purchases on a weekly, daily, or monthly basis. This flexibility allows investors to smooth out risks and adapt their strategy according to market fluctuations.

• Yuh allows users to set up automatic purchases for various ETFs. For example, a commonly used strategy involves investing every Tuesday, Wednesday, and Thursday in three distinct ETFs, creating a solid and diversified base. The ability to purchase fractional shares (starting from 25 CHF) is another major advantage, making investment accessible even for those with smaller budgets.
• Neon offers an automated savings plan but is limited to a single monthly purchase at the end of each month. While this solution might suit long-term investors, it’s less flexible compared to Yuh, especially for those looking to adjust their positions regularly based on market conditions.

Verdict: Yuh wins this point thanks to its flexibility and the option to set up more frequent automated investments.

2. Core-Satellite Strategy: An Ideal Approach with Yuh

The core-satellite strategy involves building a portfolio with a solid core and more specialized satellite investments to boost overall performance. Here’s how Yuh is particularly well-suited for this strategy:

• Core: Investors can establish a stable foundation with a set of well-diversified ETFs, such as the Vanguard FTSE All-World or iShares MSCI World. With Yuh, you can set up an automated savings plan for these ETFs, investing a fixed amount each week (e.g., 25 CHF every Tuesday, Wednesday, and Thursday). This approach takes advantage of dollar-cost averaging while minimizing transaction fees.
• Satellite: Users can complement their portfolio with more specific investments, such as sectoral ETFs (technology, real estate, gold) or even cryptocurrencies. For example, it’s possible to add a gold ETF to protect against inflation or a real estate ETF to generate additional income.

Verdict: The ability to mix automation and low-cost diversification makes Yuh the ideal choice for the core-satellite strategy, compared to Neon, which is limited in terms of investment frequency.

3. Transaction fees and federal stamp duty

Fees are a crucial factor in maximizing returns, especially in the long term. Yuh and Neon have different approaches in this regard:

• Yuh currently offers a selection of six ETFs with no transaction or custody fees, making it a highly competitive option for investors looking to minimize costs. Additionally, each transaction is rewarded with 5 Swissqoins, Yuh’s native cryptocurrency. These Swissqoins, revalued each month, can offset part of the federal stamp duty, making the investment more profitable.
• Neon offers fee-free transactions for ETFs in its monthly savings plan, but lacks a rewards program similar to Yuh’s. Standard custody fees also apply outside of this savings plan.

Verdict: Yuh wins again, thanks to its Swissqoin rewards program and zero fees on selected ETFs, making it a more cost-effective option in the long run.

4. Flexibility and transaction speed

One of Yuh’s key strengths is its reactivity. The app allows users to quickly sell their ETFs or other assets in the event of a sudden market downturn, which is essential for investors looking to protect their portfolio during market crashes.

• Yuh: Buying and selling ETFs or stocks can be done in just a few clicks, with near-instant confirmation. This allows for quick reactions to market fluctuations and reallocating funds to safer assets when needed.
• Neon: While the app is responsive, it’s slightly less fluid for buying and selling transactions. Transaction management is not as optimized as Yuh’s, partly due to the lack of an equally developed infrastructure as Swissquote’s.

Verdict: Yuh outperforms Neon in terms of speed and agility, which is crucial for active investors.

Comparison table: Neon vs. Yuh for ETF investments

Conclusion: Yuh wins the comparison

After a thorough evaluation, Yuh emerges as the best option for Swiss investors looking to automate their investments while enjoying great flexibility. Its support for advanced investment strategies like the core-satellite approach, its reactivity in case of market crashes, and its Swissqoin rewards make it a unique solution in the Swiss market.