How a Passive Income Plan can help generate returns from idle assets

Lending securities has long been a tool used by major financial institutions to generate additional returns from their portfolios.

Today, Swissquote is making this opportunity accessible to private investors through its Passive Income Plan, a secure, transparent and flexible way to earn passive income from existing holdings.

Swissquote’s Passive Income Plan is designed to allow clients to temporarily allow the transfer of ownership of a stock, bond or ETF to a borrower in exchange for a fee.

Importantly, the investor retains economic exposure to the security, meaning they continue

• to benefit from dividends,
• interest payments, and
• any price appreciation while earning an additional revenue stream from lending it.

Instead of letting securities sit idle, investors can generate extra income from the same holdings, effectively putting their portfolios to work around the clock.

This makes securities lending particularly attractive in periods of market uncertainty or low interest rates, when traditional sources of yield may be limited.

Beyond short-term gains, the program can also provide a

• steady,
• compounding source of revenue.

Small but consistent fees collected on loaned securities can accumulate over time, supplementing returns from capital appreciation and dividends. For investors seeking both stability and enhanced income, Passive Income Program offers a way to diversify portfolio returns and increase overall efficiency without adding complexity or taking on excessive risk.

The launch of the program is part of Swissquote’s ongoing mission to deliver innovative ways for clients to maximize the value of their assets.

Securities lending is a well-established practice among the world’s largest asset managers, who have used it for decades to optimize returns. By extending access to private investors, Swissquote empowers clients to benefit from the same efficiency once reserved for institutions.

The initiative fits seamlessly into Swissquote’s

• multi-asset,
• multi-currency and
• multi-service approach — offering investors the broadest possible toolkit for managing and enhancing their portfolios.

Typical yields on loaned securities range between 0.5% and 4%, depending on factors such as

• market demand,
• the type of security, and
• prevailing economic conditions. 

While the exact returns can fluctuate, these yields offer investors a reliable source of supplementary income in addition to dividends, interest payments and capital appreciation.

The results since the program’s launch in Switzerland have been particularly encouraging. Within just a few months, several clients have earned over USD 10’000 in passive income, demonstrating the tangible benefits of participating in securities lending. Many others have generated smaller but consistent returns, illustrating how the program can provide steady, compounding income even for investors with modest portfolios. Notably, one exceptional participant has earned more than USD 50’000, highlighting the significant earning potential for those with larger or highly diversified holdings.

Participating in Swissquote’s Passive Income program does not change the way investors manage their portfolios. All positions remain fully visible and fully tradable, meaning clients retain complete control over their assets at all times. Investors can buy, sell, or adjust their holdings just as they normally would, without any restrictions or interruptions caused by the lending process.

The program is designed to be

• seamless,
• user-friendly, and
• fully transparent,

Clients can benefit from additional income without needing to actively monitor or manage the lending activity. Earnings from loaned securities are automatically credited, providing a hands-off, passive income stream that complements traditional returns from dividends, interest, or capital gains.

This approach allows investors to continue their usual trading strategies and portfolio management decisions with peace of mind, knowing that the securities lending process works quietly in the background. It effectively turns idle assets into an active source of revenue without adding complexity or operational burden.

While any investment-related activity involves some level of risk, Swissquote’s securities lending framework is designed to minimize exposure and protect clients’ assets. The process is backed by multiple layers of protection, including:

Borrowers — typically large financial institutions — use securities lending for a variety of legitimate and essential purposes.

These include

• hedging, where institutions offset risk in their own portfolios;
• market making, which ensures liquidity and smoother trading in the markets; and,
• liquidity management, helping firms meet short-term funding needs or operational requirements.

By borrowing securities, these institutions can maintain efficient trading, manage risk and support overall market stability.

While short selling is often associated with borrowing securities, it accounts for only 20–30% of total securities lending activity. This means the majority of lending serves constructive, risk-management and operational purposes rather than speculative strategies. For investors concerned about their securities being used to bet against their position, this offers reassurance that lending activity is largely supportive of market function rather than purely contrarian trading.

Historically, securities lending was largely restricted to institutional investors because it required sophisticated infrastructure, years of experience, and significant capital — often tens of millions — to set up a program suitable for private clients. For most individual investors, the complexity and cost made participation impractical, leaving a substantial opportunity untapped.

The collaboration between Swissquote and Sharegain changes this landscape by bridging the gap between institutional-grade solutions and private investing. By combining Swissquote’s robust trading platform and regulatory oversight with Sharegain’s technology, operational expertise and pooled resources, the partnership allows private investors to access a level of sophistication and efficiency previously available only to large financial institutions.

This synergy not only provides access to new revenue streams, but also ensures that clients benefit from advanced risk management, transparency and seamless execution.

Swissquote’s securities lending program stands out for several reasons:

• Multi-asset, multi-currency, and multi-service access – Clients can lend a wide range of securities across different asset classes, including stocks, bonds and ETFs, in multiple currencies. This flexibility allows investors to generate additional income across their entire portfolio, rather than being limited to a narrow set of instruments.
• A pool of tier-one borrowers – The program connects clients to a select group of high-quality, well-capitalized borrowers. This ensures strong utilization of loaned securities, maximizes potential returns, and maintains stability and security in the lending process. Competitive fees are achieved by tapping into this trusted borrower base.
• Transparent revenue sharing (50/50) – Earnings from securities lending are split equally between the client and Swissquote, providing a clear, fair and straightforward way to benefit from the program. Clients can easily track how much income they generate, reinforcing transparency and trust.
• Robust risk management framework – Every transaction is closely monitored to minimize risk. Collateralization, insurance coverage, and strict oversight ensure that securities are protected. Swissquote’s team applies industry-leading risk controls and compliance measures to safeguard clients while allowing them to earn additional revenue.

By making securities lending accessible, Swissquote allows investors to extract more value from their portfolios without taking on additional complexity. It’s an elegant solution: keep your investments, retain full control — and let your assets work harder for you.

Being able to lend securities is no longer a privilege of large institutions. With Swissquote’s Passive Income Program, it’s now an opportunity for every investor who wants to make the most of their holdings.

The content in this article is provided for educational purposes only. It does not constitute investment advise, financial recommendations or promotional material.