Investment Strategy
We create an investment portfolio that is tailored to your life situation and objectives, and continuously adapts to your investment horizon and the ever changing world economy.
The four principles at froots
Value Driven
Value means price in relation to earnings. In the long run this has proven to be the most important predictor for future returns. Therefore, froots always looks for undervalued investment opportunities around the globe.
Rules Based
People have emotions, especially when it comes to investing. To protect ourselves against emotional biases, froots has a clear set of rules. All investment decisions are based on facts and never on emotions.
Long-Term
Predicting what financial markets will do tomorrow is impossible, but in the long-term markets have always gone up. This is because companies adapt to new conditions and create growth through innovation. With our long-term perspective, we participate in this upside.
Goal Oriented
We don't believe in one-size-fits-all solutions. A solid portfolio must be tailored to you. We create a portfolio that suits you today and adapts over time as your life and investment horizon change.
This is how we build your investment portfolio
1. Definition of the Investment Universe
Based on your personal goals and circumstances, we determine the right asset classes for you and how their allocation should evolve over time.
2. Valuation of Asset Classes
Valuation is a key driver of long-term returns. We use both absolute and relative valuation to decide the optimal weight of each asset class in your portfolio.
3. Valuation Within Asset Classes
The same principles apply within each asset class. For example, in equities, we overweight regions that are attractively valued.
4. Independent Product Selection
froots selects the best products worldwide to implement your asset allocation. Key criteria include cost, liquidity, tracking error, and replication method.
Risk and Return Matching Your Time Horizon
In the long run, higher volatility should increase expected returns. At the same time, it increases downside risk. This is why we adjust our strategy as the investment cycle matures. We don’t try to avoid risk, we manage it.
How froots compares to other solutions
A "balanced" portfolio is likely the most common portfolio composition that banks offer to their clients today. It consists of 50% fixed-income securities and 50% stocks. The reason for its popularity is that it aims for a balance between growth and volatility limitation. Our long-term growth strategy exhibits a similarly limited volatility but significantly outperforms a balanced portfolio. This is made possible through our systematic, value-oriented approach combined with active, counter-cyclical measures. You can find all the further details about our investment approach in our whitepaper.
froots is 100% Independent
No Conflicts of Interest
froots has no own products or agreements with product providers. This enables us to objectively select the best products for you.
The Broadest Investment Universe
Our independence allows us to select from all financial products worldwide. Our only criterion? The best product for you at the most attractive price.
Independent Product Selection
Whether replication method, tracking error or bid-ask spread, our independence allows us to select the right products at the best possible price. Download our white paper for a better understanding on how this process works.
This is how your portfolio would have developed with us.
Despite turbulent times, froots has managed to achieve attractive returns.
*We started to invest in September 2019. Source: Own data. Yearly performance before fees. Historic developments are not an indicator for future performance. Investments involve risks.
Always the right Asset Allocation
We don’t believe in one-size-fits-all. Your portfolio is continuously adjusted to your investment horizon and market conditions.
The graphic shows examples from long-, medium-, and short-term strategies.
The power of an investment horizon
Risk and volatility are not the same thing. In a well-diversified portfolio, volatility only becomes a risk as the investment horizon shortens. Therefore we accept volatility initially and reduce it over time to avoid unnecessary risk. That’s how we keep returns that are made early on safe.