Education Fund: “I am convinced that with money also comes responsibility.”

Dr. Anja Hochberg is Head of Multi-Asset Solutions at the Asset Management division of Zürcher Kantonalbank. The economist, who holds a PhD, has been a dedicated member of the Fondsfrauen Advisory Board from the very beginning. Today, Fondsfrau Anke Dembowski speaks with her not about traditional investment solutions but about a recently awarded initiative by the Swiss cantonal banks.

Anja, at last year's Fondsfrauen Award you were honored as Woman of the Year. What does this award mean to you?
It means a great deal to me. It’s a confirmation that my commitment to gender equality is being recognized. At the same time, it motivates me to keep pushing forward on this topic. I hope it serves as an inspiration for many women and men to continue supporting professional equality with energy and joy.

The award you received recognizes women with entrepreneurial achievements. You launched a very special product with the Swiss cantonal banks that was recently honored with the “Ethics in Finance” award by the University of Neuchâtel. Can you tell us more about it?
Of course. The initiative is an investment solution where part of the return is donated to “Education Cannot Wait” (ECW), the UN fund for education in emergency situations. There are more than 250 million children and young people worldwide without access to education. That’s a lot of missed opportunities. I believe education is a basic human right, and supporting this goal unites us across the cantonal banks. Until now, there was no investment product dedicated to this cause. The idea came from Swiss Federal Councillor Ignazio Cassis, who called at WEF 2023 for private capital to be mobilized to support education (UN Sustainable Development Goal 4). The opportunity to create real impact through financial solutions was a huge motivation for me. I connected with many stakeholders in the financial ecosystem to make this happen. The investment solution is now live, and we’ve already supported 2,800 children and adolescents.

How exactly does the investment solution work?
We wanted to keep it as simple as possible. So we used an existing strategy: a multi-asset fund classified under Article 9 SFDR that can be distributed both in Switzerland and in the EU. We aim for a long-term net return of 4.0% p.a. Of this, 2% goes to the clients, and 2% is donated to Education Cannot Wait.

Are clients okay with this model?
Yes, they consciously choose this fund. After all, they could just as well buy a classic balanced fund that doesn’t donate 2% annually. While clients donate part of their return, the cantonal banks waive most of their fees. Additionally, we provide an impact report. It shows how many children benefited from the project and which specific initiatives were supported. We break it down per fund unit - meaning, for every unit invested, a certain number of children are supported. The Swiss Confederation audits the impact reports from Education Cannot Wait - the organization we donate the funds to. This level of transparency is essential when it comes to donations.

At least in Switzerland, there’s a small tax incentive for the fund...
Yes, we’ve received confirmation from some Swiss tax authorities that only 50% of the fund’s value must be declared for wealth tax purposes due to limited beneficial ownership. We’re still clarifying how to handle the tax situation abroad, but we didn’t want to delay the fund’s launch in Switzerland.

Another way to support education would be through student loans. Why not take that route?
That’s a more limited investment segment mainly aimed at institutional investors and not suitable for broad participation. Our fund allows every retail investor to both invest and donate. With the Swisscanto (LU) Portfolio Fund Sustainable Balance – Education Initiative Swiss Cantonal Bank we wanted to offer an affordable, transparent investment solution with an impact report. As a Luxembourg UCITS structure, the fund offers daily liquidity.

How is the distribution going?
The fund is distributed through the cantonal banks. Our target audience is primarily private investors.

Is the donation tied to the fund’s performance in a given year?
No, we donate 2% each year, regardless of performance. The donation is accrued on each valuation day. Even if the performance in a given year is -5%, we still donate 2%. This continuity is essential for donation planning, since funding programs require predictability. Over the long term, the return is split 50:50 between the client and the donation.

Swiss cantonal banks are known for being quite conservative. How did you manage to get them all on board for this project?
I had the full support of my CEO, Urs Baumann. Yes, we are competitors among the cantonal banks, but we also share strong common values - education being one of them. Support from the Swiss government certainly helped, but it still took some persuasion and coordination to align 24 CEOs. I believe all 24 CEOs are now glad they joined, especially as it allows them to offer their clients a philanthropic investment option.

What does the educational support look like? How do you choose the projects?
We decided to focus on what we do best -managing money. The actual implementation of educational projects is handled by the UN organization Education Cannot Wait. One of its key advocates is former UK Prime Minister Gordon Brown, who serves as a UN Special Envoy for Education. The LEGO Foundation is also involved, promoting learning through play. Switzerland is represented at a high level, where strategic priorities are discussed - for example, how to support girls’ education in Iran or respond to the Ukraine crisis, where many schools have been destroyed. On the ground, local organizations implement the projects.

Since we are at Fondsfrauen, I’d like to ask - are girls being given special support in this project?
We make sure to maintain balance and avoid reinforcing gender disparities. This is also reflected in our KPIs. In Iran, for example, we have women-focused projects, whereas in Ukraine it’s more of a 50:50 approach. We also support education initiatives directly in refugee camps.

How does this product reflect positively on the Swiss cantonal banks?
The fund has received positive media attention, though I think there’s still room for growth. In October, we had the opportunity to present the fund at the Yale Club during the UN General Assembly. We’ve appeared on Swiss television and even local radio, and we presented our progress this year at the WEF. Now, as mentioned, we’ve received the “Ethics in Finance” Award from the University of Neuchâtel, supported by the Swiss Bankers Association, AMAS, CFA Society, SSF, and others.

How is the fund being received by clients? How much AUM have you collected so far?
It’s important to remember this is a niche fund. Almost one year after its launch - and under tough market conditions - we’ve reached around CHF 14 million in assets under management. That’s a solid start, but of course we’re aiming higher. I’m particularly pleased that we’ve attracted a broad mix of investors: classic retail clients investing 1,000 francs, and wealthier private clients investing up to 100,000 francs.

Is a special fund for foundations also in the works?
Yes, we recently launched a foundation fund in Switzerland that allows smaller foundations to invest very efficiently.

And how will the foundation fund work?
The Swiss Philanthropy Performance Index (SwiPhiX) replicates the average performance of around 80 foundations that manage their assets with us. We replicate the average allocation of their individually tailored strategies and follow a strict sustainability approach. We provide full performance data to the foundations so they can pursue their individual philanthropic missions.

As Woman of the Year, you also serve as a role model. What career advice would you give to our readers who want to pursue a career in finance?
I’d like to share four pieces of advice that I consider essential:

• Do what you truly enjoy. Then do it with passion and go the extra mile.
• Make yourself visible. Block time in your calendar for strategic projects that help increase your visibility. A great example is the education fund we’ve been discussing.
• Don’t fall into the “busy bee” trap.
• Celebrate achievements - when you and your team accomplish something, take time to acknowledge it. That builds unity and sets the stage for the next great idea.

Wonderful tips. One last question: you seem incredibly motivated. What drives you?
I firmly believe that with money comes responsibility. To me, this is a philosophical principle. If we can inspire like-minded clients to invest in this fund, that truly energizes me.

Thank you, Anja, and we wish you great success with your impressive product.

Here you can find more information on the educational fund “Swisscanto (LU) Portfolio Fund Sustainable Balance (CHF) – Education Initiative Swiss Cantonal Banks” (ISIN: LU2825509388)

 

 

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