Wettlauffer Wirtschaftsberatung and Universal Investment launched the Smart & Fair fund as a mutual fund for church investors and foundations.
The new fund consistently focuses on the needs of church investors and foundations and relies on a rule-based investment approach with very low fees. For the asset structure, a target allocation of 30% shares focusing on Europe and 70% euro bonds is targeted. It’s sustainability concept is based on a best-in-class approach, excluding particularly critical sectors and countries in line with the recommendations of the Evangelical Church of Germany and the Catholic Church’s Episcopal Conference.
“Given the low interest rates, it is important that all costs are as low as possible to provide the investor with an attractive return. In order to achieve this, the Smart & Fair fund also waives costly active distribution through banks and financial intermediaries, “says Frank Wettlauffer, fund initiator and managing partner of Wettlauffer Wirtschaftsberatung.
The fund is being initiated not only for but above all by several institutional investors. Low costs and high returns should result in the absence of active management. However, instead of investing passively in indices using ETFs, the fund uses a smart approach. Universal Investment’s portfolio management sorts around 1,700 stocks of sustainable companies every two months according to their volatility. From this, the 50 stocks with the lowest fluctuation expectation from different sectors and countries are selected and form, balanced, a very broadly diversified stock portfolio. The bond component consists of around 150 widely diversified bonds denominated in euros. These are managed according to the transaction cost saving ladder strategy.
“We value a reduction in transaction costs and construct a sustainable portfolio with the intention of holding the acquired securities rather than exchanging them on short notice,” said Jens Olm, portfolio manager, Universal Investment.
“For us rule-bound fund fits, which relies on companies with boring, but understandable and ethically clean business models”, said Stefan Grosse, Finance Department of the Evangelical Church of Central Germany, which has participated in the conception and also significantly involved in the starting volume, which is around €20m.