Passive wealth management

In passive wealth management, the portfolio is linked to a broad market index (e.g., SMI, MSCI World, S&P 500) as cost-effectively as possible and for the long term – usually via ETFs or index funds. There is no active selection of individual securities by a manager. Instead, the market is simply replicated. The aim is to achieve market returns, generate the lowest possible costs, minimize transactions and taxes, and achieve maximum diversification. The advantage of this strategy lies in its cost efficiency, transparency, scientific basis (efficient market hypothesis), and the fact that it often proves to be better than active management in the long term after costs.

Digital wealth managers such as True Wealth rely on a passive investment approach.