Neon Invest Review and Test (September 2024)

Neon Invest – Accessible Low-Cost Investing

With more than 240,000 users, Neon Bank has established itself as one of the largest neobanks in Switzerland, alongside Yuh Bank. Since 2023, Neon has enriched its services with Neon Invest, an investment solution directly integrated into its banking application. If you are looking for a platform that allows you to manage both your investments and your bank account, Neon Invest could be an ideal option.

The offering enables a seamless transition between your daily banking and financial investments, giving you the opportunity to invest in stocks and ETFs while having a clear and complete overview of your finances. Neon Invest stands out with its access to more than 240 stocks and 70 ETFs listed on the BX Suisse (Bern stock exchange), and positions itself as a simple and transparent solution, without custody fees or exchange fees.

We took the time to explore in depth everything that Neon Invest has to offer, and here is what we think. In this guide, you will find an overview of the benefits, essential features, as well as fees to be aware of. The idea is to help you decide if this platform is a good fit for your investment goals and day-to-day financial management.

Neon Invest Features – 6/10

Neon Invest providers a variety of features that simplify the investment process for Swiss investors, with a focus on making the investment journey both accessible and manageable for beginners. The platform provides essential tools for long-term investors, especially those interested in automated investing and a diversified portfolio of global stocks and ETFs.

Access to Global Stocks and ETFs

One of the important features of Neon Invest is its goal of providing investors with a diversified portfolio of global FTSE stocks and global ETFs. With access to over 240 stocks and 70 ETFs, the platform offers investors a comprehensive selection of options. The platform’s stocks and ETFs are primarily traded on the BX Swiss Exchange (formerly the Bern Stock Exchange).

For investors looking to tap into international stocks or expand their portfolio with global ETFs, Neon Invest provides an effective entry point. However, due to the smaller size of the BX Swiss Exchange, liquidity can be an issue, which may result in wider spreads on trades. This may be less of a concern for long-term or passive investors, but for those looking to trade frequently, the low trading volume on the exchange can be problematic.

Buying Cryptocurrencies

Neon Invest does not currently offer direct access to cryptocurrency trading.

As an investor, you can still access the cryptocurrency market through Crypto ETFs or blockchain-related ETFs available on the platform. These funds offer indirect exposure to digital assets without directly holding cryptocurrencies, making them a safer option for traditional investors.

Neon currently offers 3 crypto-related ETFs with high TERs:

• Bitcoin Tracker : Leonteq Tracker Certificate on Bitcoin – CH1171799823 – TER : 1.5%
• Ethereum Tracker : Tracker Certificate on Ethereum – CH1171799807 – TER : 1.5%
• Ripple Tracker : Leonteq Tracker Certificate on Ripple – CH1171799815 – TER : 1.5%

While there are other ETFs or ETPs in Switzerland with much lower TERs, for example:

• 21Shares Bitcoin Core ETP – TER : 0.21 %
• 21Shares Ethereum Core ETP – TER: 0.21% (available at Alpian)

Neon Invest could potentially expand its offerings to include crypto-friendly investments, further diversifying its platform. For now, Yuh offers direct cryptocurrency trading, but Neon remains a solid choice for those focusing on traditional investments.

Stock and ETF prices are displayed in CHF

Neon displays stock and ETF prices in CHF to simplify the user experience. This avoids currency conversion fees when trading and provides full transparency on costs.

Additionally, since trading is done via the Swiss exchange BX Swiss, where prices already include currency conversion, this ensures favorable spreads and avoids additional fees for the investor. This allows you to trade directly in CHF without worrying about currency fluctuations.

Savings plan with 0% fees and automated investments

Neon Invest includes a savings plan with 0% fees on selected ETFs, along with automated investments.

You can easily create an individual investment plan and allocate funds to their selected assets, whether Swiss stocks, global ETFs or specific Invesco ETFs or Vanguard FTSE funds.

This allows you to gradually build wealth over time without the need for constant monitoring. You can schedule monthly contributions, which are then automatically invested in stocks or ETFs of your choice.

For example, if you allocate CHF 500 per month, the platform automatically allocates this amount according to your predefined allocation (e.g. 70% in a global ETF and 30% in a Swiss stock), helping you stay on track with minimal effort.

This feature is especially appealing for passive investors who prefer a hands-off approach to managing their portfolio, as the system ensures that your money is automatically invested according to the predefined plan. However, since Neon Invest does not offer fractional trading, your contributions are only used to buy whole stocks, leaving funds remaining until the next purchase cycle.

Market Orders Only

Currently, Neon Invest only supports Market Orders, which means that a Buy or Sell is executed immediately at the current market price.

While Limit Orders would offer more flexibility by allowing users to set a specific buy or sell price, Neon’s Market Order system simplifies the process for those focused on long-term investing. The platform does not require users to constantly monitor the market, making it accessible even to beginners.

Neon plans to soon introduce the ability to place Limit Orders. With this type of order, you can set a minimum or maximum price for buying or selling a stock. Once the stock reaches the price you set, the order is automatically executed, whether it is to buy or sell.

Stock Transfers and Portfolio Management

Neon Invest allows you to transfer stocks to another broker for CHF 100 per position. This is relatively rare among low-cost brokers, making it an attractive option for investors who may want to switch platforms without selling their holdings.

On the downside, it is currently not possible to transfer stocks from another broker to Neon Invest, limiting flexibility for new users who may want to consolidate their investments in one place.

Portfolio management on Neon Invest is straightforward, with users able to track their holdings via the Neon app, which integrates both banking and investing services into one seamless experience. While the app only supports market orders, the portfolio interface makes it easy to manage and track performance.

Our opinion on the features of Neon Invest

Neon Invest is intuitive and accessible, ideal for beginner investors. It offers a limited number of securities, mainly Swiss stocks and ETFs. In comparison, platforms like Swissquote, Interactive Brokers or Saxo Bank offer a more investment products, including thousands of global stocks, bonds, options and derivatives. These platforms also offer advanced analytical tools and sophisticated trading features, such as margin trading or hedging options, making them better suited for experienced and active investors.

Ergonomics and use of Neon Invest – 8/10

Direct investment with Neon Invest

By clicking on the “Invest” icon in the menu you arrive on the Neon Invest home screen and can see:

• The Popular stocks this week.
• The “Top movers“: the stocks that gain and lose the most.
• Stocks and ETFs grouped by theme

By clicking on a theme, you access the list of available stocks or ETFs:

• Swiss stocks
• ETFs
• 0% plan: ETFs without fees available in the savings plan
• 0% specials: ETFs with 0% fee
• Crypto: crypto-linked ETFs
• Real estate, Finance, Technology, AI, Raw materials,… for other stocks and ETFs

By clicking on a value, NVIDIA stock for example, you can see the share price in CHF.

2 options are available: Buy or Sell. Your order is then placed immediately at the market price, during the opening hours of the BX Swiss: Monday to Friday between 9:00 a.m. and 5:30 p.m.

If you place an order outside of opening hours, it will be recorded and placed as soon as the market opens at 9:00 a.m.

Savings plan and automatic investment with Neon Invest

At the bottom of the screen you can click on Savings plan (Investment plan on the image) and select the values ​​you want to add among the 0% ETFs, ETFs and stocks.

Here we select “AI & Big Data” and the next screen shows us the price of the ETFs, its Full Name, its ISIN, its TER and also allows us to access its full file.

If you click on the button at the bottom “Add to investment plan“, you just have to enter the amount in CHF that you wish to buy each month, then confirm the addition to your savings.

The following screen allows you to see the composition of your savings plan and manage the assets:

Our opinion on the ergonomics and ease of use of Neon Invest

The ergonomics of Neon Invest is one of its strong points. The app is designed to be intuitive and easy to use, even for investment beginners. The process of creating portfolios and automating investments is seamless, with clear instructions and a clean design.

Neon Invest Trading Fees – 8/10

Neon Invest’s pricing structure is designed to meet the needs of frequent traders and long-term investors.

Neon Invest Trading Fees

Fees at Neon Invest are transparent and competitive:

• Swiss Stocks and ETFs: 0.5% of the transaction amount.
• International stocks: 1% of the transaction amount.
• Currency Conversion Fees: None, as all transactions are processed in Swiss Francs.
• Custody Fees : None, unlike other platforms that often charge annual fees for managing securities.

In addition, the tax on stock market transactions applies:

• 0.075 % on Swiss securities,
• 0.15% on international securities.

Neon Invest transaction fees

The platform applies a minimum trading fee of CHF 1 per transaction, which makes it particularly attractive for small investors who want to get started on the stock market without having to deal with costs high initial fees.

For example:

• A transaction of CHF 200 on a Swiss stock incurs a fee of only CHF 1.
• A transaction of CHF 1000 would incur a fee of CHF 5, which remains reasonable even for medium-sized transactions.

Unlike other platforms, Neon Invest does not impose a maximum on transaction fees. Although this is advantageous for small transactions, this may increase costs for larger transactions. For example, trading CHF 5,000 on a Swiss stock will cost CHF 25 in fees, which can be expensive for larger trades.

Stamp Duty

As with most Swiss brokers, you will also need to take into account the stamp duty, which is levied on all transactions. This tax rate is 0.075% on Swiss shares and 0.15% on international shares. Although these fees are relatively minor, they are still a factor to take into account when calculating overall transaction costs.

Dividends and currency conversion

There is, however, one notable exception when it comes to dividend payments. If you own shares in companies that pay dividends in foreign currencies, these dividends will be converted into CHF and you will have to pay a currency conversion fee of 1.5% on these dividends. This can add up over time, especially for investors who focus on building wealth through dividend stocks.

ETF Trading

When it comes to ETF trading, Neon Invest offers a wide range of Swiss and European ETFs with low trading fees. As mentioned earlier, Swiss ETFs have a fee of 0.5% for buying and selling, making the platform ideal for those who want to trade or invest in ETFs regularly.

However, due to currency conversion fees on dividends, some investors may find accumulation ETFs, which automatically reinvest dividends, to be a more attractive option than distribution ETFs, which pay dividends to the investor.

Trading Fees Comparison: Neon Invest vs. Yuh vs. Alpian

When it comes to investing, fees play a significant role in determining the overall profitability of your portfolio. Here’s how Neon Invest, Yuh and Alpian compare in terms of fees:

Yuh Bank

• Transaction fees: 0.5% fee on all transactions (Swiss and international stocks).
• Foreign exchange fees: 0.95% fee for non-CHF denominated transactions, which can significantly increase costs for those investing in global markets.
• Custody fees: None, making it competitive for long-term holders.

While Yuh offers the same 0.5% fee for all stocks and ETFs, its 0.95% currency conversion fee can become expensive for those investing in foreign stocks or ETFs. However, it remains competitive for domestic CHF investments.

Alpian

• Management Fee: 0.75% of managed portfolios, which covers personalized investment services and portfolio adjustments.
• Foreign Exchange Fees: Minimal but present, as Alpian supports multi-currency accounts, making it a better option for clients with international banking needs.
• Transaction Fees: Included in Management Fees
• Custody Fees: Included in Management Fees

Alpian’s 0.75% management fee covers full wealth management, making it suitable for investors seeking a more hands-off approach. However, for cost-conscious traders or those focused on investing on their own, Neon Invest’s lower per-trade fees may offer better value for money.

Security and asset management – 10/10

Investments at Neon are secured in several ways. Your assets are securely held with the bank Hypothekarbank Lenzburg,  ensuring that they do not become part of the bank’s balance sheet. This means that in the event of Neon or the bank going bankrupt, your investments remain your property.

They are also protected by the regulation of the BX Swiss, a recognized Swiss stock exchange, and are classified as separate assets, which ensures that your investments are not affected by the financial problems of the company or the bank.

In addition, Neon allows investors to transfer shares from their Neon account to another broker for a small fee. This flexibility is a rare feature among digital investment platforms and can be beneficial for investors who want to transfer shares between brokers.

Neon Invest vs. traditional brokers

If you compare Neon Invest with traditional online brokers, you will quickly notice significant differences. Neon Invest offers an attractive fee structure, with no custody fees and low transaction fees, making it an attractive option for small investors or those who want a passive approach, especially in ETFs.

However, where Neon Invest may be limited is in the range of products available. With around 300 tradable securities, it still lags far behind traditional brokers like Swissquote, which offer access to millions of products, including bonds, options, and stocks on various global markets.

Additionally, trading features are limited on Neon Invest. Unlike more robust platforms, you can only place market orders with no option to use limit orders. This could be a turnoff for active investors looking to maximize their strategies.

On the other hand, Neon Invest stands out for its simplicity and intuitive interface, which is ideal for beginners. If you’re new to investing and looking for an easy-to-use platform with no hidden fees, Neon Invest could be a great option. But if you plan to trade frequently or diversify your portfolio heavily with international stocks, a traditional online broker might be a better fit for your long-term needs.

Neon Invest vs. Yuh

The comparison between Neon Invest and Yuh is common in the Swiss investment community. Both platforms offer low trading fees and access to global stocks and ETFs, but there are a few key differences.

• Currency Exchange: Neon Invest offers the advantage of no currency exchange fees, while Yuh charges a 0.95% fee on currency conversion.
• Breadth of Offering: Yuh offers a broader offering by giving you access to over 300 stocks, 50 ETFs, and 60 cryptocurrencies. There are also more features at Yuh, such as buying fractions of shares.
• Savings plans: Neon Invest allows users to set up an individual investment plan, in which investors can automatically allocate funds to up to three stocks or ETFs each month. In contrast, Yuh offers a more limited savings plan structure.

We will do a more detailed comparison of Neon vs Yuh in a future article.

Who is Neon Invest suitable for

If you are a beginner or intermediate investor looking to limit costs, Neon Invest allows you to benefit from transparent and affordable fees, especially on Swiss stocks and ETFs. There are no foreign exchange fees, which means you will avoid unpleasant surprises when trading on foreign markets. In addition, the absence of custody fees makes it an attractive choice for those who want to maximize their returns over the long term.

For those who wish to manage their portfolio themselves without the constraints of high fees often imposed by traditional banks or other brokers, Neon Invest stands out with its clear fee structure, adapted to small investors. Thanks to its seamless integration with the Neon banking app, you can easily track and adjust your investments while keeping an eye on your bank accounts and daily transactions.

In short, whether you are looking to invest small amounts regularly or explore opportunities in Swiss stocks and ETFs, Neon Invest offers an efficient, cost-effective platform that is perfectly suited to self-managing your investments.

Frequently Asked Questions (FAQ) about Neon Invest