What is True Wealth's investment approach?
We pursue a passive (i.e. index-oriented) investment approach based on scientific principles and implement this approach consistently for our clients. Out of conviction, we do not use expensive investment products that claim to beat the market. Numerous scientific studies conclude that low-cost and liquid investment funds achieve better returns on average than expensive ones.
That is why we mainly use ETFs, exchange-traded funds that track a market index. However, there are over eight thousand ETFs on the market, and not all of them are suitable. We select the best ETFs for you. In addition to the product costs, we also take into account the market liquidity and the counterparty risk resulting from the structure of the ETF. Finally, we analyse how well the ETF effectively tracks the market index (so-called tracking error).
Index funds are also used for the securities portfolios in Pillar 3a for tax optimisation reasons.