Fund of funds, without the fee stack.

Fund of funds have long been a popular solution for professional investors. Investing across low-correlated portfolios in the same asset class should lead to a portfolio less exposed to volatility swings than direct investments in securities or single funds, and to better risk-adjusted returns.

The difficulty is cost. Returns generated by fund managers are already exposed to an accumulation of operating fees carried by the underlying funds, and fund-of-funds managers charge their own fees on top for the investment process. Investors end up carrying a high total expense ratio simply to access a professionally diversified portfolio.

Access is the second problem. Not all funds are open to professional investors. Many of the more prestigious funds carry hurdles and special requirements just to participate.

An actively managed certificate on funds achieves the same broad diversification and asset allocation through a single instrument, structured flexibly and without the second fee layer.

• Structured simply. Asset managers structure the AMC on funds in a flexible and straightforward way.
• Bought through a bank. Investors buy the AMC, with its Swiss ISIN, through their bank to participate in the performance of the fund portfolio.
• Your counterparties. The asset manager designates a custodian per note and selects the broker for trading and rebalancing.
• Lower cost, more flexibility. A lighter structure than a fund of funds, and a gateway to funds that would otherwise be out of reach.