VisualVest experiences: Union Investment’s robo-advisor put to the test

VisualVest experiences: Union Investment’s robo-advisor put to the test

VisualVest funds

Each asset class is represented in the portfolios by at least one fund. They are selected through a multi-layered evaluation process with various quality criteria.

When selecting passive index funds (ETFs), the most important criterion is that the funds have a high correlation to the selected index, which reflects the sub-asset class in the portfolio. Other criteria such as costs, performance and tracking error are also taken into account. Size and liquidity are also criteria that play a role in the selection. VisualVest only selects ETFs that have demonstrated over time that they track their index as closely as possible and can be expected to do so in the future. Furthermore, the robo advisor makes sure that the passive index funds come from well-known and well-known companies.

The special thing about sustainable investments is that, in addition to the classic criteria such as security, profitability and liquidity, there are also ethical, social and ecological aspects – the so-called ESG criteria (environment, social, governance). The GreenFolios consist of up to six funds and ETFs in the asset classes equities and bonds. GreenFolio funds must meet strict criteria:

Sustainable orientation: Sustainability must be an integral part of the investment strategy and the fund must adhere to the principles of sustainable investing.

ESG-Score: The fund must have at least a 6 out of 10 point in the ESG score. The score determines how well the fund adheres to ethical, social and environmental criteria.

CO2 emissions: The CO2 emissions must be significantly lower than with comparable, non-sustainable funds. Only the funds with the lowest CO2 emissions are shortlisted. VisualVest also shows the CO2 footprint of the individual GreenFolios on the website.

Financial Criteria: The funds must also pass a quantitative test. Among other things, performance, tracking error, fund company, etc. are checked.

Comparison with Union Investment: VisualVest compares how the sustainability of the fund was rated by the parent company Union Investment.

In the end, only those funds are selected that, in addition to the financial criteria, best meet all of the sustainability criteria mentioned.

Tipp: You can read more about this in our guide to sustainable investments.

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