The Peaks portfolios are being updated: here’s why

We've made some improvements to the Peaks portfolios, meaning you now have the option of refreshing your Peaks portfolio to reflect these changes. In order to help you make an informed decision on this we've explained the main reasons for the change in this blog. In a nutshell, refreshing your portfolios will instruct Peaks to exchange a number of existing ETFs for new ones and to adjust some weightings of ETFs in your portfolios. The risk level of your portfolio will remain unchanged.

The new funds allow you to achieve 3 things:

• reduce your costs
• reduce dividend tax
• bring your Peaks portfolios back in line with the global market

Please note: this article is intended to help you make your own choice regarding your ETF portfolios. As an execution-only platform, we don't provide personal advice. Be sure to decide for yourself whether the new funds and portfolio allocation suit your financial situation and goals.

The most important changes at a glance

Read on to learn more about what will change if you opt for the update:

1. Lower fund costs

The new ETFs have lower fund costs. Depending on your portfolio, this will save you around 10% to 14% in fund costs per year.

2. Lower dividend tax

For your US shares, we’re using a new fund based in Ireland instead of Luxembourg. Thanks to a favourable treaty between Ireland and the US, you pay half as much dividend tax: the rate drops from 30% to 15%. Because you pay less dividend tax, you retain more return – approximately 0.22% per year on your investments in US shares.

3. A portfolio that better tracks the global market

The stock and bond markets never stand still. To ensure that your Peaks portfolios continue to track the global market closely, we have updated the distribution of funds in the four Peaks portfolios. In concrete terms, this means that you invest slightly more in US shares at the expense of European shares, and slightly more in European government bonds at the expense of European corporate bonds.

Other features of the new ETFs

The new ETF that invests in European government bonds takes into account the CO2 emissions of the European countries in which it invests and qualifies as a sustainable fund. Furthermore, all ETFs are now “accumulating”. This means that dividends are automatically reinvested for you. 

What should I take into account when updating?

The decision to update your portfolio or not is up to you. Consider the following when making your choice:

• Investing involves risks. The value of your investments may fluctuate and past performance is no guarantee of future results.
• A new portfolio composition may lead to different results compared to your current portfolio. This can be positive, but also negative.

What do I need to do to update my Peaks portfolio?

Want to update your Peaks portfolio? Open your app and you’ll see a prompt for the ETF switch.

Are there any costs involved?

The total cost for the switch is a one-off fee of 0.02% of the portion of your assets that is being adjusted. These costs are included in the price of the ETFs you buy and sell. You only pay these costs once, when you update your portfolio.

Furthermore, the switch is made at the closing price of the day. This means you do not pay a “spread” (the difference between the purchase and sale price of the ETFs).

When will my portfolio be updated?

If you give us consent to update your portfolio now, we will replace your old ETFs for new ones on February 4, and we'll change the weights within your portfolio on February 5. 

You can also update your portfolio after this date, but you will pay more costs (spread) because the orders will then be executed via the stock exchange. You will not be able to take advantage of the low rate that we have now agreed upon for our customers.

Am I obliged to update my Peaks portfolio?

No, updating your Peaks portfolio is not compulsory. If you prefer to continue investing with your current Peaks portfolio, you don't need to do anything and nothing will change for you.

I have a custom portfolio: can I also update it?

Yes. Even if you’ve built your own portfolio, you can update it. Follow the same steps in the app to exchange your current ETFs for the new ones. The ratios within your portfolio will remain unchanged: you will retain the distribution you have chosen. In this case, you will also pay a one-off fee of 0.02% on the invested capital that you adjust.