quirion has long offered its clients professional investing at unbeatably low rates. Because we know: every euro saved on costs increases our clients’ returns. We have now managed to reduce costs noticeably once again, without having to make any significant changes to the orientation of our portfolios. The fund costs (TER) in our portfolios are falling – depending on the chosen strategy – to 0.20% to 0.22% p.a. In the previous composition, costs of 0.23% to 0.29% still applied. With an example investment amount of €50,000, our clients therefore save around €25 per year thanks to the adjustments. Below we describe the product changes in detail.
Equities
In the equity segment, we have newly added the „Lyxor Core STOXX Europe 600“ to our portfolios. The fund replaces the „Vanguard FTSE Developed Europe“. The switch comes with a lower cost ratio (now just 0.07% p.a.), a historically better return for the new product and better market coverage, including the small-cap coverage we were looking for.
In addition, the „Global Targeted Value“ from the fund company Dimensional Fund Advisors had to leave our universe. We have replaced it with the „Vanguard Global Value Factor“ and the „SPDR MSCI World Small Cap“. In favour of these two additions, the weighting of the „Lyxor MSCI World“ was also reduced somewhat. The lower costs combined with high product quality speak in favour of the new products, which together take on coverage of small-cap and value stocks in the world’s developed markets. In doing so, we were even able to slightly expand our emphasis on these sources of return. In our assessment, the use of Dimensional funds is now – unlike in earlier years – no longer necessary, thanks to the significantly improved range on offer in the ETF segment. For this reason, we parted ways with the fund, which by our standards is comparatively expensive.
Bonds
In the bond segment, we have until now covered each market segment – that is, safe bonds, high-yield bonds and long-maturity bonds – with separate ETFs in each case. We are now loosening this structure in favour of a slightly improved cost ratio: the „iShares Core Global Aggregate Bond“, with a total cost ratio of 0.10% p.a., has now made its way into our universe. This fund covers both government and corporate bonds of the most varied maturities worldwide in a single product. The weightings in the existing ETFs were reduced accordingly so that our target weighting of the market segments mentioned above remains unchanged. In addition to the improved cost ratio, the fund is distinguished by a very high number of holdings, which should provide for slightly improved diversification.
In addition to the stated ongoing costs, once again we took a wide range of further criteria into account in our fund selection. In particular, we paid attention to a low bid-ask spread, a sufficient fund size, a high index replication quality and a historically better performance of the fund compared with its alternatives. We also took a close look at the construction of the indices tracked as well as the quality and security of the fund companies.
Once again it has become clear that, with a strictly independent selection from the fund universe available in Germany, a wide range of product providers comes into play: as before, we fill our portfolios with funds from eight different issuers. As far as we know, no other digital wealth manager uses such a broad spectrum of different issuers.
We carried out the product changes automatically over the past few days as part of our regular rebalancing, without our clients having to do anything for this.
