The index is less diversified than it sounds
A cap-weighted index puts the most money into whatever has already grown biggest and most expensive. A handful of mega-caps end up carrying your result.
The Smart Beta strategy
The efficient path
to global markets.
A globally diversified portfolio of low-cost ETFs, tilted by set rules toward return factors that academic research has studied in depth. Built around your risk profile, from €20,000.
Capital at risk. Investing involves risk: the value of investments can go down as well as up, and you may get back less than you invested. Past performance and any simulated/back-tested performance are not reliable indicators of future results. Tax treatment depends on individual circumstances and current law, both of which can change.
The starting point
Why not just buy the index?
Buying "the market" through a standard index fund is a reasonable start, and far better than guessing. But it has weaknesses that research describes well. Smart Beta keeps the broad reach of an index, then gives more weight, by rules, to factors linked to higher long-run returns. That has a price: our management costs more than an index fund, and factors can trail the index for years.
What you pay us for is the rules you don't have to run yourself (factor selection, regular rebalancing, the bond portion) and an advisor you can call.
The price you pay shapes the return you get
Long-run returns are linked to today's valuations. An index that ignores price buys the expensive and the cheap in exactly the wrong proportions.
Well-researched return drivers exist
Peer-reviewed research links certain company characteristics, called factors, with stronger long-term, risk-adjusted returns. A plain index does not target any of them.
The return factors
Six return factors, working together.
We tilt the portfolio, deliberately and systematically, toward six characteristics that research has associated with stronger long-term results.
Value
Companies priced below their fundamental worth. Paying less for the same stream of earnings has historically been rewarded over long horizons.
Size
Smaller companies that analysts and large institutions follow less. Their prices swing more, and the extra return research finds does not show up in every period.
Momentum
Sustained, established price trends. Markets absorb news gradually, so trends tend to persist longer than intuition suggests.
Quality
Highly profitable companies with strong balance sheets, the kind that tend to hold up better when conditions turn difficult.
Low volatility
Steadier stocks that cushion the depth of market falls, which makes the portfolio easier to hold through bad periods.
Equal weight
Removing the dominance of a few mega-caps, so your money is spread more evenly across the whole market.
No single factor wins every year, which is why we combine six. Value has lagged for years at a time, momentum can reverse sharply, and small companies swing more than large ones. Because these factors move fairly independently of each other, the combination has historically swung less than any single factor. That is not guaranteed.
We name the research we rely on. Eugene Fama and Kenneth French described the value and size effects (1992, 1993), Narasimhan Jegadeesh and Sheridan Titman momentum (1993), Robert Novy-Marx profitability (2013), and Ang and co-authors low volatility (2006). The research also shows a limit: effects that academics publish tend to weaken after publication (McLean and Pontiff, 2016). So we do not bet on any single factor.
The other half
The bond portion has a job: cushioning equity falls.
It is built in several layers, as carefully as the equity side.
- Globally diversified bondsThe broad, stable core of the bond portion.
- Government bondsHigh-quality sovereign debt as the anchor.
- Longer-dated government bondsThey have often risen when equities fell, but not always: in 2022 they fell together.
- Inflation-linked bondsProtection for purchasing power.
- A short-dated liquidity bufferKeeps the portfolio flexible without forced selling.
Tax-aware by design. We use accumulating ETFs, where dividends are reinvested inside the fund. That defers tax on dividends and keeps more of them invested.
Honest about the trade-offs. A diversified, factor-based portfolio still fluctuates. In bad periods its value can fall and you may get back less than you invested. The aim is a smoother path over time; it cannot remove the falls.
How it runs
We rebalance by rules.
Your risk profile sets the frame
The suitability questionnaire that MiFID II requires places you on a scale from 1 to 7, which sets the permitted ranges for equities and bonds. Smart Beta is available across all seven profiles.
Built almost entirely through ETFs
We implement the strategy roughly 100% through ETFs from the world's largest providers: low costs, high liquidity, and holdings you can always see.
Quarterly, rules-based rebalancing
Every quarter, or sooner if the portfolio drifts further from the ranges of your profile, we bring it back to its targets. When equities fall, their share of the portfolio shrinks, so rebalancing buys more of them. If the value of your portfolio falls by 10% or more since the last report, we tell you, as the law requires, and explain in writing what we did and what we did not do.
You watch everything in the app
You receive a report on your portfolio, costs and returns every month, and you can see where you stand in the app at any time, together with your transactions and the documents you need for your tax return (eDavki).
| At a glance | Smart Beta |
|---|---|
| Goal | Efficient long-term growth with factor tilts |
| Implementation | Roughly 100% ETFs from the world's largest providers |
| Approach | Rules-based, systematic |
| Rebalancing | Quarterly (or sooner on a larger drift from the profile ranges) |
| Risk profiles | 1 to 7 |
| Minimum investment | €20,000 |
Private banks often offer this kind of management only for much larger sums. With us it starts at €20,000.
Fees: in the open
See exactly what you pay.
We charge no trading costs. A high-water mark means the performance fee is only charged on new gains above the highest value your portfolio has previously reached.
| Smart Beta | |
|---|---|
| Management fee | 0.7% + VAT / year |
| Custody fee | 0.2% / year |
| Performance fee | 10% + VAT of positive return, high-water mark |
| Trading / execution | €0, we cover them |
| Underlying fund costs | 0.05% to 0.45% a year, depending on the fund |
The ETFs in the portfolio have their own costs, on average less than 0.20% a year (individual funds 0.05% to 0.45%). The fund deducts them from its value; they are not our income.
We are licensed and supervised by the ATVP. Your assets are not on the firm's balance sheet. Client cash is held in fiduciary accounts at a bank, and securities are held by regulated custodians in a pooled client account, separate from the firm's assets; our records show what belongs to whom. The firm's creditors cannot reach these assets.
- Long-term investorsPeople investing for goals that are years away, who want a disciplined process without having to run it themselves.
- A first larger portfolioFor people who want a broad, understandable portfolio run by clear rules.
- People who value their timeYou follow everything in the app; we do the watching, rebalancing, and reporting.
And who it's not for: money you will need within a couple of years, or an emergency reserve. Markets can fall at exactly the wrong moment for a short horizon. In that case we'll point you toward something more suitable.
Capital at risk. Investing involves risk: the value of investments can go down as well as up, and you may get back less than you invested. Past performance and any simulated/back-tested performance are not reliable indicators of future results. Tax treatment depends on individual circumstances and current law, both of which can change. This website is a marketing communication. It is not investment advice, a personal recommendation, or an offer to enter into any contract. Detailed pre-contractual information is provided before any agreement is concluded.
Other paths
Smaller start, or a more active path?
The same strategy, from €500
Through the tax-advantaged Individual Investment Account, we manage your money with the Smart Beta strategy from as little as €500.
The active path
Quantitative selection of individual global stocks, for experienced investors with risk profiles 6 and 7, from €70,000. Prices swing more, and falls can be deeper.