Investing with more options – but also more decisions

The world of investing has rarely been as diverse and, at the same time, as confusing as it is nowadays. With traditional investment funds, low-cost ETFs, booming cryptocurrencies, and a growing number of online brokers, investors are faced with more options than ever before. However, as this diversity becomes increasingly confusing, the complexity of the decisions involved also increases.

Between tradition and Innovation

For a long time, investing was relatively straightforward: in most cases, people opted for a savings book, perhaps a fund, or occasionally individual shares. Today, however, a wide variety of investment options compete for investors’ attention.

A key consideration for many investors is whether to opt for a traditional investment fund or a low-cost ETF. Whereas ETFs generally track an index passively, actively managed funds aim to outperform the market through the targeted selection of securities. Both approaches have their merits as well as their limitations. ETFs score highly, particularly for their low costs and simplicity. Actively managed funds, on the other hand, offer the opportunity to react specifically to market changes or to give greater weight to certain themes.

Digital assets on the rise

At the same time, a completely new asset class has emerged in the form of cryptocurrencies. Digital assets such as Bitcoin and Ethereum represent technological innovation and new financial structures based on blockchain technology. More and more investors are attracted by the potential for high returns, yet at the same time are wary of the extreme volatility of this “digital gold”.

The role of the online broker

Another driver of this trend is the boom in online brokers. Internet platforms now make it possible to trade securities quickly and easily – often at significantly lower costs than with traditional banks. Access to ETFs, shares, and even cryptocurrencies has thus become easier than ever before.

But this simplicity has a downside: the responsibility lies more heavily with the investor themselves. Anyone investing via an online broker must independently grapple with issues such as product selection, risk diversification, fee structures, and tax implications. The technical barrier to entry is low – but the substantive one is often high.

Complexity as challenge

Novices, in particular, often underestimate how much know-how is required to take successful investment decisions. Even with ETFs, the detailed questions start to arise: which index is the right one? How is it tracked? What are the actual costs involved? On top of this there are tax differences, for example between different fund structures.

Things get even more complex when it comes to cryptocurrencies. As well as the investment decision itself, technical aspects also play a role here – from wallets and security issues to choosing reputable trading platforms. At the same time, the markets are heavily influenced by emotions, hype, and short-term fluctuations.

Thematic focus on future trends

The fund combines traditional equity investments with innovative themes and invests in digital assets that reflect the future and focus on long-term trends:

• 50% of the fund’s assets are invested in MSCI World ETFs,
• 30% in thematic ETFs that track trends in blockchain, fintech, and related technologies,
• and up to 20% in crypto-assets such as Bitcoin and Ethereum.

The combination of equity funds, equity ETFs, and ETPs within a single fund is notable for its cost-effectiveness and is specifically aimed at investors willing to take risks who wish to invest in the performance of crypto-assets for the first time, prefer a passive approach, and do not wish to manage trading or reallocation themselves.

An overview of the fund mix:

• Global equity ETFs allow for broad diversification across regions and sectors and form the solid foundation of modern investment strategies.

• Crypto-assets are digitally generated units based on blockchain technology that are used as investment and payment instruments. At the same time, they are associated with high levels of volatility – a factor that can be better mitigated within the context of a broadly diversified fund.

• Alternative energies encompass technologies for generating electricity and heat from renewable sources such as the sun, wind, or water.

• Cybersecurity acts as a digital shield for modern businesses and facilitates trust in an increasingly interconnected world.

• Artificial intelligence and big data transform vast amounts of data into intelligent solutions and driving the next generation of technological innovations.

Expertise in multi-asset management

Even those who are willing to take risks and are open to modern financial instruments appreciate having a trusted partner at their side who knows the market and has many years of experience. Erste Asset Management is the market leader in the investment fund sector and manages assets of about EUR 107.25bn, invested across more than 380 funds. Approximately EUR 11bn is managed in mixed portfolios in Austria.

The investment department at Erste Asset Management comprises consist of 100 investment professionals across all the group’s countries. They have an average of over 20 years’ professional experience. To ensure optimal investment outcomes, Erste Asset Management’s fund managers also work closely with the in-house research department.

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Opportunities and risks:

The fund employs an active investment policy and is not oriented towards a benchmark. The assets are selected on a discretionary basis and the scope of discretion of the management company is not limited.

Benefits for the investor

• Investment focus on equities and digital assets.
• The investment objective is long-term capital growth.
• By investing across different asset classes, risk is diversified, which can help to reduce the risk of loss.
• Investment funds are special assets.

Risks to bear in mind

• The assets may be exposed to market, liquidity, exchange rate, deposit, and operational risks.
• Investments in cryptocurrencies such as Bitcoin and Ethereum are subject to high price volatility and may result in significant losses in value. Cryptocurrencies are considered speculative, are highly volatile, and may be subject to regulatory changes that could have a negative impact on the fund’s value.
• Capital loss is possible.
• The following risks may be of particular relevance to the fund: credit risk, counterparty risk, liquidity risk, deposit risk, derivative risk, and operational risks. For comprehensive information on the risks of the fund, please refer to the prospectus and to the information for investors according to sec. 21, part II, chapter “Risk notices” of the Austrian Alternative Investment Fund Managers Act.

 

This document is an advertisement. Unless indicated otherwise, source: Erste Asset Management GmbH. The language of communication of the sales offices is German and the languages of communication of the Management Company also include English.

The prospectus for UCITS funds (including any amendments) is prepared and published in accordance with the provisions of the InvFG 2011 as amended. Information for Investors pursuant to § 21 AIFMG is prepared for the alternative investment funds (AIF) administered by Erste Asset Management GmbH pursuant to the provisions of the AIFMG in conjunction with the InvFG 2011.

The currently valid versions of the prospectus, the Information for Investors pursuant to § 21 AIFMG, and the key information document can be found on the website www.erste-am.com under “Mandatory publications” and can be obtained free of charge by interested investors at the offices of the Management Company and at the offices of the depositary bank. The exact date of the most recent publication of the prospectus, the languages in which the fund prospectus or the Information for Investors pursuant to Art 21 AIFMG and the key information document are available, and any other locations where the documents can be obtained are indicated on the website www.erste-am.com. A summary of the investor rights is available in German and English on the website www.erste-am.com/investor-rights and can also be obtained from the Management Company.

The Management Company can decide to suspend the provisions it has taken for the sale of unit certificates in other countries in accordance with the regulatory requirements.

Note: You are about to purchase a product that may be difficult to understand. We recommend that you read the indicated fund documents before making an investment decision. In addition to the locations listed above, you can obtain these documents free of charge at the offices of the referring Sparkassen bank and the offices of Erste Bank der oesterreichischen Sparkassen AG. You can also access these documents electronically at www.erste-am.com.

Our analyses and conclusions are general in nature and do not take into account the individual characteristics of our investors in terms of earnings, taxation, experience and knowledge, investment objective, financial position, capacity for loss, and risk tolerance. Past performance is not a reliable indicator of the future performance of a fund.

Please note: Investments in securities entail risks in addition to the opportunities presented here. The value of units and their earnings can rise and fall. Changes in exchange rates can also have a positive or negative effect on the value of an investment. For this reason, you may receive less than your originally invested amount when you redeem your units. Persons who are interested in purchasing units in investment funds are advised to read the current fund prospectus(es) and the Information for Investors pursuant to § 21 AIFMG, especially the risk notices they contain, before making an investment decision. If the fund currency is different than the investor’s home currency, changes in the relevant exchange rate can positively or negatively influence the value of the investment and the amount of the costs associated with the fund in the home currency.

We are not permitted to directly or indirectly offer, sell, transfer, or deliver this financial product to natural or legal persons whose place of residence or domicile is located in a country where this is legally prohibited. In this case, we may not provide any product information, either.

Please consult the corresponding information in the fund prospectus and the Information for Investors pursuant to § 21 AIFMG for restrictions on the sale of the fund to American or Russian citizens.

It is expressly noted that this communication does not provide any investment recommendations, but only expresses our current market assessment. Thus, this communication is not a substitute for investment advice.

This document does not represent a sales activity of the Management Company and therefore may not be construed as an offer for the purchase or sale of financial or investment instruments.

Erste Asset Management GmbH is affiliated with the Erste Bank and austrian Sparkassen banks.

Please also read the “Information about us and our securities services” published by your bank.