We review Schwabcore’s commodity investments paying “from 12% upwards”

Schwabcore offers investment in portfolios of commodities. On its “Foundation Investments” page, it states

Our clients see yields on a monthly, quarterly or yearly basis as returns are procured. Capital invested has an average growth of 12% (Capital Only). Upon full exit, our clients receive above 12% return and in certain cases, more subject to regular compound growth.

On the following “Our Investments” page, it goes on to say:

We only work with capital safe investments. Therefore, if you have experienced recent losses in the market or you are making very little from current savings, then taking advantage of our expertise is what you should consider in order to recoup a solid capital return.
Our basic commodity investments perform from 12% upwards, and are free from capital taxation. We have structured it this way so that investors know their exact capital when they invest and also know the exact amount they will receive upon exit from investment. This is one of the main reasons why property investors enjoy the variety of products we have constructed.

Who are Schwabcore?

No corporate identity details are provided by Schwabcore. This is a major red flag.

Schwabcore lists contact addresses for Germany, the UK, Dubai and New York, with the German address first.

Its website however is in English only, with no German-language pages revealed by a Google site search, and the website is peppered with references to UK law: for example, “It is important to note for clients based in the United Kingdom that commodities in the United Kingdom are not required to be regulated by the FCA” on the “Foundation Investments” page, and references to the UK’s Financial Services & Markets Act in its “Client Policy” page.

This suggests that Schwabcore is in fact being run out of the UK or by people linked to the UK.

There is no company with the name Schwabcore listed on the UK’s Companies House, the German company registry, or the multinational Opencorporates database. No corporate details are disclosed on Schwabcore’s website.

Schwabcore claims to have been established in 2000. However, whois data shows that its website was registered in June 2013, and web.archive.org found no web pages at that domain until 2017. The registration is, unsurprisingly, anonymous. In the absence of a corporate entity there is zero evidence that Schwabcore existed before 2013 (at a stretch).

Schwabcore claims to be run by CEO Peter Lee, who, given the lack of corporate details provided by Schwabcore, may or may not exist.

How safe is the investment?

Schwabcore refers to its investments as “capital safe” and claims that they should be considered by investors looking to improve the rates on their savings.

In reality, commodities are highly volatile, and discretionary managed portfolios of commodities are extremely high risk with potential for anything up to 100% loss.

Given the lack of transparency over its identity and its blatant porkies over how long it has been in business, it is questionable whether Schwabcore’s commodity portfolios even exist.

Schwabcore’s claim that its investments are tax free is also dubious, even if taken at face value. Gains on commodities are subject to capital gains tax in the UK. Naturally, the question of tax on gains is moot if you make a loss due to Schwabcore’s anonymous owners disappearing with your money.

Should I invest in Schwabcore?

This blog does not give financial advice. The following are statements of publicly available facts or widely accepted investment principles, not a personalised recommendation. Investors should consult a regulated independent financial adviser if they are in any doubt.

Any investment offering yields of above 12% should be considered extremely high risk.

Before investing investors should ask themselves:

• How would I feel if the investment defaulted and I lost 100% of my money?
• Is my portfolio big enough that I could lose 100% of my investment and not worry about it?

Most importantly, investors should think long and hard before handing their money to a firm that appears to have no registered corporate identity, claims implausibly high investment returns for “capital safe” investment, and lies about how long the firm has been in business.

Do not proceed unless you are prepared to lose all your money.