We have now managed to reduce costs significantly once again, without having to make substantial changes to how our portfolios are structured. The cost ratio of our funds (TER) is falling from an average of 0.40% to an average of 0.26% (the exact figure depends on the choice of risk category). Together with quirion's management fee of 0.48%, this now results in total costs of just 0.74% per year – even lower than what is already common among the low-cost digital wealth managers. Even better: at the moment we waive the management fee entirely on the first €10,000 of an investment for our clients. quirion thus offers by far the most affordable broadly diversified securities portfolio on the German market.
What helped us achieve this cost reduction is that a few weeks ago the fund company Vanguard entered the German market. Vanguard invented the index fund in the USA and, thanks to the growing popularity of these low-cost funds, has risen to become the world's second-largest asset manager. Vanguard is known for putting the interests of its investors first. What helps here is a unique
"Following the switch, we will in future hold funds from 8 different providers in the portfolio."
Share
ownership structure: the company is owned by its own funds and thus by its investors. In future we will use Vanguard funds to cover the European and Japanese markets.
Our equity portfolio is diversified worldwide; we are invested in all the relevant countries around the globe. That won't change in the future either. Going forward, however, we will map individual regions using region-specific index funds and thereby cut costs significantly. For globally diversifying funds, for example, you have to reckon with roughly 0.30% in annual costs; to invest in the USA – which accounts for a large share of the global capital market – we now instead use a region-specific fund at a cost of just 0.05%. "Breaking down" the world market into individual regions on their own would involve noticeable and cost-intensive extra effort for private investors – whereas, with the help of our automated processes, we can exploit such price differences among funds with no extra effort for our clients.
In addition, as part of these optimisation measures, we are saying goodbye to a fund-specific investment in German government bonds. This streamlines our bond segment; German government bonds continue to be represented in our portfolios as part of European government bonds, where they serve as an anchor of stability.
The funds that mainly have to make way are those from the providers Dimensional Fund Advisors and iShares. However, products from both providers will continue to be represented in the portfolios.
Naturally, all newly added funds meet the strict quality criteria of our fund selection, which include favourable real total costs and a high quality of index replication.
As a result, quirion will in future hold funds from 8 different providers in the portfolio. This number underlines our independence and demonstrates that we select the best products for our clients from the entire product range available on the market.
