My wife is inheriting an investment holding company that belonged to her grandpa, who passed away a few years ago. The ownership transfer is in the final stages, so we’ll need to start thinking about what we ought to do with the assets it holds. Could you guys give us some guidance?
The company’s assets are in a Swiss account that includes:
- 175 ozt fine gold (0.995), valued at about $500K USD;
- 2,000 shares of UBS Asia Flexible Bond Fund USD P-acc, valued at about $300K USD;
- Cash, mostly in Euros, valued around €350K/$360K.
The Asia bond fund invests in a variety of countries, including Indonesia, the Philippines, and Sri Lanka. About a quarter is sovereign bonds, and the rest is a mixture of bonds in those emerging markets.
The performance is not terrific, but now does seem like a good high point to sell. The percentage growth over the years was -5.7% in 2021, -16.4% in 2022, 3.9% in 2023, and 5.8% in 2024. Am I correct in thinking it’s rational to sell these shares?
As for the gold, I’m not actually sure what makes the most sense. Thoughts?
Do not use any manager or bank that charges a percentage of assets to manage the account. This is a common scam which will cost you tens of thousands over the years. I call it a scam because in the US (I don’t know Swiss laws if you are a Swiss citizen.), money managers are allowed to recommend (or purchase on your behalf if they are managing it) stocks that they get kickbacks for telling you to buy. Obama made it illegal but Trump reversed this and made it legal again.
Money Managers might try and claim they don’t do it but of course they get performance bonuses. Where did their department get the bonus money from? From the other departments that are getting paid for recommendations. So they can technically claim they didn’t get paid for the stocks they told you to buy but which their bonus money comes from anyway. And because of Trump it’s perfectly legal.
A one time hire of a manager to look at your accounts is fine.
Yep, for sure. We’ll also make sure anyone we work with is a fiduciary, to help guard against those kinds of corrupt practices.
Even with fiduciaries is that as I said, they will claim they don’t take kickbacks which is technically true. Meanwhile their research department that doesn’t directly advise customers but gives the fiduciary the list of stocks to buy is taking kickbacks which adds profit to the company that pays the fiduciary’s bonus.
Active managers underperform the market. And charge a fee to do it.
What you should look at is a tax accountant that can advise you on how to minimize taxes as you transfer any stocks you don’t like into index funds like SPY.