Here you can find answers to the most frequently asked questions. If you need any further information, please contact us. 


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1.1 What does quantitative portfolio management mean?

Portfolio management is a question of strategic decisions and trade-offs aimed at maximizing investment returns at a given risk level, based on currently available financial information. Quantitative techniques use historical data such as prices, returns and volumes to make investment decisions. You will find more information and details in our “User Guide”.

1.2 How does quantitative portfolio management work?

The underlying universe for portfolio allocation includes over 1,000 securities (equities and ETFs). By combining these instruments in different ways, you can construct many different optimal portfolios representing the whole universe (see the detailed description in our “User Guide”).

1.3 What does CVaR mean?

It is the average weekly Conditional Value-at-Risk (CVaR) of your strategy portfolio, with a 95% confidence level. CVaR is a more conservative risk metric than the traditional Value-at-Risk (VaR) measure. VaR is a statistical measure of market risk of an investment instrument. For example, a VaR of -2% means that for a week holding period, the probability of losing more than 2% of your portfolio value is 5%. Conversely, there is a 95% probability of not losing more than 2% of your portfolio value during a one–week period.

1.4 What does “reference currency” mean?

All the calculations are done in the chosen currency (if you are considering securities in other currencies, their historical data will be converted into the chosen reference currency for all calculations and simulations).

1.5 What does back-testing mean?

Back-testing consists in simulating your strategy over a past period according to the universe/parameters predefined by Swissquote or set by you. The back-test is performed on the longest possible period according to the available data.

1.6 What does granular universe mean?

A granular universe means that the size of the client’s universe depends on his asset under management (AUM). The idea is the following: For a low AUM value, it is difficult to offer diversification with individual financial vehicles, such as stocks or tracker funds on given commodities, since transaction fees imposes to get low number of stocks. To address this issue, diversification will be achieved firstly through ETFs representing global asset classes or particular investment grades for financial instruments. As soon as AUM increases, ETFs are replaced by their constituent stocks. Diversification is then done with the Swissquote algorithm itself at a thinner level.

1.7 What is currency hedging?

Currency hedging, or exchange rate hedging, gives protection against fluctuations in the exchange rate between the reference currency and the other currencies in which investments are denominated. Hedging currency risk means that, with respect to reference currency of the strategy, the client will be exposed only to market fluctuations of a stock in is own currency.


2.1 Who can open an ePrivate Banking account?

Private clients can open an ePrivate Banking account. Companies/Banks interested in Swissquote’s ePrivate Banking platform should contact Swissquote’s White Label Team (wlsales@swissquote.ch or +41 58 721 97 74).

2.2 What is the minimum amount required to open an account?

The minimum amount for opening an ePrivate Banking account is CHF 20,000.

2.3 Is there a minimum holding period for which the money must be invested?

No, the investment strategy can be stopped at any time. Please note, however, that investments in shares should be made over a medium to long-term horizon (approximately five years).

2.4 Asset allocation – what costs should I expect?

Depending on the amount you choose to invest, our yearly all-in fees start at 1.25% and decline on a sliding scale to 0.95%. All-in fees cover all transactions and rebalancing operations performed by our algorithm or by Swissquote Bank. Manual transactions triggered by the user are possible at all times but are not included in these yearly all-in fees. The costs of these manual transactions can be up to 0.1% of the transaction amount (min. 9.- / max 99.-). Administrative tasks, such as dealing with corporate actions, generating income statements, and carrying out custody duties, are all included in the all-in fees. Third party costs, such as Federal stamp fees, market place taxes, and brokerage fees, are not included in the all-in fees. Inbound payments are free of charge. Outbound payments within the SEPA zone are also free of charge. Outbound payments outside SEPA (for example the UK) cost CHF 2 / EUR 2 / USD 10. For a detailed overview of costs, please check our Fees & Conditions or call us directly on +41 44 825 88 44.

2.5 What are the costs of modifying the investment strategy?

The All-in Fee includes all portfolio management fees, with no limit on the number of times the portfolio is rebalanced annually.

Manual transactions generated by the client, not the algorithm, are billed in addition to the above, at a rate of 0.1% of the transaction amount (min. 9.00 / max. 99.00).

2.6 What exchange rate is used when buying shares in different currencies?

The rates used are the current exchange rates (major currencies: mid rate + 100 pips, i.e. percentage in points) at the time of the trade.

2.7 What are currency hedging costs?

Currency hedging costs are determined by the differences in short-term interest rates between the foreign currency and your reference currency, plus a spread to cover the administration of the hedge. We will be able to display the hedging cost in your account at a later stage when setting up your strategy; in the meantime, please contact +41 44 825 88 44 should you want more details on this topic before the strategy is activated.

2.8 Are fees taken into account when back-testing?

Yes, the chart shows the changes in the amount invested in the strategy. The Swissquote transaction fee and annual management fees are calculated during back-testing, but dividends are not taken into account.

2.9 What average amount should be taken into account for additional fees (stock exchange costs, stamp duty, etc.)?

It depends on the frequency of reallocation. The higher the reallocation frequency of the portfolio, the higher the additional fees. Calculating the average additional cost percentage is dependent on the final cost of selecting the risk level and white and/orblack lists. The approximate costs are already taken into account in the back-test.

2.10 Are dividends taken into account in back-testing?

No they are not.


3.1 What does “universe” mean?

The universe is the collection of all admissible investment instruments.

3.2 Which assets are taken into account to create the investment universe?

Over 900 stocks from the following markets: Switzerland: about 50 (SMI / SPI) Germany: about 130 (DAX / MDAX / SDAX) Europe: about 220 (STOXX Europe 600, Portugal not included) USA: about 500 (S&P 500) Note: Some stocks may be excluded due to special foreign trading restrictions (e.g. those listed in Hong Kong, Poland, Romania, Brazil and Norway).The list of stocks taken into account is therefore subject to change. Several hundred ETFs quoted on Swiss, European and US markets (excluding fixed income and short ETFs). An exchange-traded fund (ETF) is an investment fund traded on a stock exchange, much like a stock. Most ETFs track an index such as the SMI and may be attractive as investments because of their low costs and stock-like features. ETFs are an easy way to invest in a particular country, region, sector or asset class. ePrivate Banking 2.0 is based on four asset classes: cash, fixed income, stocks and commodities.

3.3 How can I check my portfolio before investing?

Before clicking on “Invest”, you can display the list of all assets selected for your portfolio.

3.4 How can I keep track of the purchased assets?

Once an allocation has been made, the list of purchased assets is visible in the account overview.

3.5 Is it possible to watch a demo portfolio evolve in the present/future?

No, the demo version can only be used for back-testing purposes.

3.6 Why does my portfolio include similar stocks, e.g. issued by four different cantonal banks?

The investment algorithm optimizes the portfolio by carefully selecting the assets with the highest potential returns according to the maximum risk level chosen. All the constituents of the investment universe that satisfy the chosen strategy parameters are taken into account both for maximizing portfolio returns and for matching the risk set by the client. As a consequence, the optimal portfolio could potentially include similar stocks if this would mean that it has a better expected return for a given level of risk. Note: It is possible that the algorithm will not take account of certain portfolio diversification criteria, such as geographical area. This diversification is strongly linked to the investment objective you have chosen.


4.1 What are the white and black lists?

It is possible to define specific assets that should be included (white list) in or must be excluded (black list) from the investment universe. The algorithm can invest up to 25% of the portfolio value in the assets that belong to the white list. Securities on the white list are not guaranteed to be in the portfolio. As the portfolio has a global risk constraint, the allocation model may not be able to include them.

4.2 What is the difference between instructions and preferences?

You have the possibility to define specific securities you would like to be included in or excluded from your portfolio. These are preferences, not instructions: we will do our best to take them into consideration, but this will not always be possible depending on the parameters of your strategy.


5.1 Who picks the instruments that are available in the investment universe?

The stocks available in the ePrivate Banking investment universe are picked by our Investment Committee.

5.2 How does ePrivate Banking select instruments that are suitable for my investment profile

Based on your own risk profile and preferences, our home-grown algorithm will perform a selection of suitable stocks. Should you wish to modify your preferences, the algorithm will adapt to your requirements and perform a new selection.

5.3 How does the reallocation process work?

You can choose from three options for the reallocation frequency: 3, 6 or 12 months. When the strategy parameters are modified, a reallocation is triggered immediately. The portfolio is tested each week with a CVaR check to ensure it remains within the predefined risk range. If not, the portfolio is reallocated immediately, regardless of the reallocation frequency.

In adition, the constituents of the portfolio are monitored on a daily basis and any extraordinary decisions are taken by the Investment Committee on this basis.

5.4 Is it possible to make manual reallocations?

A reallocation can also be triggered manually. The reallocation will then be performed immediately in order to construct the new optimal portfolio.  

5.5 The risk will be tested with CVaR. How does this actually work?

The portfolio is tested every week with a CVaR check to ensure it remains under the predefined maximum risk level. If not, the portfolio will be reallocated immediately, independently of the chosen reallocation frequency, to re-establish the optimal allocation (according to the strategy chosen initially).

5.6 Is there a stop loss function integrated in the system?

There is no stop loss-function in ePrivate Banking. We tested billions of simulations and it turned out that using this function, whether for trailing, fixed or volatility-based stop loss, never enhanced performance. The system is therefore always invested. However,  a reallocation is triggered if the global risk exceeds the limit.

5.7 Are there any options for having drawdowns lower than the benchmark?

If the risk level of a selected portfolio (e.g. CVaR 2% - 3%) is below that of the benchmark, then the drawdowns of this portfolio are substantially lower than those of a comparative index. In this case, it is important to know the precise reference index.

5.8 What profit/loss is to be expected?

It depends on various factors such as the current market situation, the entry date of your investment, chosen risk profile, etc.

5.9 How does the system react when faced with a market collapse?

In case of a strong market correction, depending on the CVaR risk level () chosen by the client, the system will proceed as follows:

In order to avoid a yo-yo effect resulting from upward and downward movements in financial markets, the system will take a few days to perform a reallocation of the portfolio before putting it into cash. Putting a portfolio into cash is a way of avoiding a well-known and solid phenomenon: volatility clustering. When volatility goes up, it tends to remain high for a certain period of time.

Our experience with ePrivate Banking has shown that whenever financial markets enter a period of correction, our portfolios lose less than the markets. Depending on the risk level, the recovery can be slower than the financial market recovery. The above phenomenon can be observed in our back-testing. 


5.10 What benchmark does the system use?

It is possible to select an index to compare its performance with that of the selected investment strategy (Europe: SMI, DJ Euro Stoxx 50, DAX, CAC 40; United-States: DJIA, S&P 500, Nasdaq).


6.1 Once an investment strategy has been activated, is it still possible to modify or stop it later on?

Yes, once a strategy has been activated you can always decide to change it, modify its parameters or even abandon it. If the strategy is stopped, the system will ask the user if he/she wants to keep or sell the assets in the portfolio.

6.2 Once a strategy is stopped and the assets have been sold, how long does it take for the cash to be credited to the ePrivate Banking account?

Once the assets are sold, it generally takes at least one working day for the cash to be credited to the account.


7.1 What do I have to do in the event of a corporate action?

Nothing at all. Swissquote will take all necessary corporate action decisions in your interest.


8.1 What documents/notifications will I receive?

You will receive the following notifications in your account:

  • Stock exchange advices
  • Tax statement
  • Account overview
  • Full transaction record


9.1 Does the system send me any alerts?

No alerts are sent. However, you will receive notifications on a regular basis in your message account. The list of events that are relevant to your portfolio is accessible at all times in the Reporting-section of your ePB account. 

9.2 What about security?

Access to your account is protected by a combination of user name, password and a level-3 security card, as well as the personal e-mail inbox.


10.1 “I find the system lacks transparency – on what criteria are the selection of securities based”?

The system is not based solely on an assessment of individual assets; instead, it focuses on interactions between various securities. It chooses different assets based on a mathematical formulation of the “diversification” concept. In other words, the strategy selects a combination of securities that collectively has a lower aggregated risk than any individual security. This is possible because different assets sometimes change in value in opposite ways and thus compensate for risk. 

10.2 “How long does it take me to manage my investments in ePrivate Banking?”

ePrivate Banking is an optimal solution for people taking an active interest in financial markets without necessarily devoting all their time to them or even keeping regular track of what is happening on them.

The objective of our service is precisely to offer a solution for investing in financial markets without having to sacrifice time or build up the necessary knowledge.

The time taken to set up an investment strategy depends on the number of simulations performed by the user and can therefore take less than 5 mins or much longer. 

10.3 “I would like to have more manual involvement, with possibilities similar to those on my trading account.”

The Quantitative Portfolio Manager is based on statistics, mathematics and algorithms. The goal is to avoid emotional bias in the investment process. Nevertheless, it is possible to define specific assets which should be included (white list) or must be excluded (black list) from the portfolio. Furthermore, it is possible at all times to define category preferences in order to overweight or underweight specific investment categories during future allocations.

You can also sell one or more securities in your portfolio at any time.