There are all sorts of rumours going around about what robo-advisors like quirion actually do. We clear up a few misunderstandings and explain what defines our investment strategy.
What should I cook today? Where do I find my tax number? Why do people get hiccups? Anyone looking for answers to every conceivable question quickly "googles" it on the internet. Search engines seem to somehow know everything. Since 2004, "to google" has even featured as a standalone entry in the Duden dictionary. Whether it's research or booking a trip: digitalisation has made life easier in many respects.
That applies to investing too. Asset management — that used to be something only for an exclusive circle of the especially wealthy. Using digitalisation to make asset management accessible to many people: with this goal in mind, quirion launched in Germany in 2013 as one of the first robo-advisors. And it continues to pursue that goal.
The thing about "artificial intelligence"
The very term "robo-advisor", however, invites misunderstandings in a way. You quickly think of machines and algorithms processing enormous amounts of data in fractions of a second. And the keyword "artificial intelligence" is quickly dropped — AI which, at best, is supposed to be able to squeeze a bit more return out of the markets. "Better performance through artificial intelligence" is one of several misconceptions about robo-advisors that have persisted especially stubbornly for years.
Using modern information technology goes without saying at quirion. It is only through digitalisation that we can offer asset management with no minimum investment and on very favourable terms. But "digital" does not mean that algorithms make the investment decisions. At quirion, people keep a firm hold of the reins.
Forecast-free into the "global equity market"
How will prices move tomorrow, how in a week's time, and how next year? No one knows — not even an "intelligent" algorithm. There is no formula for stock market success that a machine would merely have to compute. Because it's unknown which shares will one day be among the winners: wouldn't it be a good idea to bet permanently "on all of them" and thus take risk spreading to the extreme? In a "global portfolio", the winners are always on board.
Bringing the global equity market into your portfolio, however, is not so simple. There is no single product for it. Buying all the shares in the world yourself, on the other hand, would be far too expensive, not least because you would constantly have to readjust whenever companies drop out or come newly to the market. Yet, drawing on capital market research and with the help of ETFs, it is possible to construct a portfolio that maps the relevant return factors of the global equity market quite precisely while staying cost-effective.
quirion's fees for the Digital package are 0.48% per year. For comparison: in 2020, the ongoing costs of active equity funds in the EU were on average 1.4% per year. And the performance of most active funds lags behind the market.
Tailored to your risk profile
quirion's global portfolio comes in ten variants that differ in their mix of equities and bonds. In steps of ten, the equity share ranges from 10% to 100%. Isn't this approach too heavily standardised? This is another criticism you hear fairly often when it comes to robo-advisors. Yet standardisation is not a disadvantage at all: the long-term return of the global equity market is the same for everyone. Differences exist "only" in the risk profiles of investors. To cushion the swings of the equity market, bonds are still better suited than any other asset class. As for how finely graded the blend should be, that in turn is a question of costs and benefits regarding how individually tailored the offering should be. The more specifically a product or service is designed, the more expensive it usually is.
With a digital asset manager like quirion, though, you don't have to do without individual service. It's true that many online investment platforms limit themselves to telephone customer support. At quirion, things are different: on request, we additionally offer independent advice that can be booked flexibly and easily. What's more: since 2022, investors with a suitable risk profile can set their own priorities with us. On the new quirion marketplace, a total of 14 ETF portfolios are available for this, oriented towards economic and social megatrends. These, too, you'll find only with us.
You can find the global ETF portfolio right here and the new quirion marketplace right here.
