High-dividend stocks: How to secure your passive income!

High-dividend stocks: How to secure your passive income!

On August 16, 2025, monetary policy continues to concern savers and investors in Switzerland. The Swiss National Bank (SNB) has reduced the key interest rate to 0% since March 2024, which means that savers and investors receive hardly any interest on fixed-interest securities and savings accounts. Against the background of rising inflation, savings are increasingly being devalued. In this situation, many investors are actively looking for alternatives, especially for stocks with high dividend payments as well as corresponding funds and ETFs.

Dividend strategies, known in the Anglo-Saxon financial world as “income stocks”, are very popular with private investors. Loud NZZ Funds and ETFs are based on indices such as the FTSE All-World High Dividend Yield and the S&P High Yield Dividend Aristocrats. René Stiefelmeyer from Hinder Asset Management recommends considering high-dividend strategies as a useful complement to world stock indices.

Stock selection and risks

When selecting stocks for dividend strategies, not only the dividend yield is important, but also the stability of future distributions. However, investors should be aware that high dividend yields often indicate risky stocks. Historically, investors with dividend strategies suffered significant losses during the 2007-2008 financial crisis, particularly in financial stocks.

Dividend indices are often heavily represented in the financial sector, as well as in the pharmaceutical, utilities, real estate and energy sectors. Stiefelmeyer points out that dividend strategies are considered a subcategory of value strategy that focuses on valuable stocks. He also recommends using ETFs instead of actively managed funds because they typically have lower fees.

Costs and returns

A study by the VZ Vermögenszentrum shows that there are only two dividend ETFs in Switzerland with fees of 0.15% and 0.2%, while actively managed funds have fees between 0.71% and 1.83%. The SPI Select Dividend 20 index returned 5.54% annually over the past seven years. However, investors should note that dividend products also come with disadvantages, such as less diversification and overweighting in certain sectors.

Another risk is that dividend strategies are often invested in saturated industries, which can limit the growth potential of the investments. In addition, dividends must be taxed as income, which is why it is recommended to make purchases via the tax-advantaged Pillar 3a. Despite the potential benefits, high dividend stocks are not necessarily safe investments; The general risks of stocks remain, and high payouts do not guarantee above-average performance.

Alternative investment options

There are still interesting alternatives to increasing income, such as utility funds or infrastructure stocks. In the current market situation, these options could represent a suitable complement to existing dividend strategies.

Finally, it should be noted that investors should carry out a comprehensive risk analysis when deciding for or against dividend-bearing investments. This is the only way to ensure the growth of the portfolio in the long term.