Don’t switch just yet
With Sygnia buying the five exchange-traded funds (ETFs) from Deutsche Bank and a few newly listed competing products coming to market recently, many are asking if they should be switching to another product.
The reasons put forward for the switch is because the soonto-be-rebranded Itrix is more expensive than the competition.
This is indeed the case and when I asked Sygnia CEO Magda Wierzycka if they’d be dropping the total expense ratios (TERs), the answer was no. She did concede they’d review them from time to time. Truthfully, I had hoped they would drop the fees as these ETFs are relatively expensive. Wierzycka commented that the new competing products have targeted TERs and have not been operational for a year, so they may not meet the target. That’s a fair point, but I suspect any possible miss on the target TERs would be modest.
Another point for not switching just yet is that there are costs involved, and the savings are at best a third of a percent. So for now I am waiting to see how it all shakes out on the fee front. The new ETFs may not end up as cheap and Sygnia may still drop its fees. ■
Magda Wierzycka CEO of Sygnia