The UnitPlus Mountain series

4 min 160

The UnitPlus Mountain portfolios offer an intelligent selection for long-term growth and global diversification. They are developed by experts using state-of-the-art analysis tools to exploit global return opportunities and broadly diversify risk factors. All portfolios aim to generate a risk-adjusted excess return compared to active funds and investments in individual equities and ETFs, enabling a well-balanced investment for long-term wealth accumulation with reduced risk. The award for the UnitPlus Mountain series as the best investment newcomer from the Institut für Vermögensaufbau 2023 reflects the high standards of the portfolios.

How are the portfolios put together?

The UnitPlus Mountain series consists of five portfolios: Zugspitze, Mont Blanc, Matterhorn, Kilimanjaro, and Mount Everest. They are each composed of seven different ETFs and take into account the two asset classes equities and bonds to increase diversification and thus further reduce idiosyncratic risk. Idiosyncratic risk is the risk of an individual investment, for example, the company-specific risk of a share. This risk can be virtually eliminated in investments by diversifying across many investments.

The equity side reflects the equity market in a diversified manner and based on global gross domestic product, whereby investments are not made in companies that conflict with this through the use of sustainability criteria. To avoid overweighting in individual regions or countries, the portfolios are divided geographically into the US, European, Japanese, and emerging markets. As a result, the Mountain portfolios achieve better diversification than an investment in the MSCI World alone, for example, as this has a very strong focus on the IT sector and the USA, which means a cluster risk. Nevertheless, the USA accounts for the highest percentage of the overall portfolio on the equity side, even with UnitPlus. On the bond side, however, Europe is given greater prominence, as investments are made exclusively in bonds denominated in euros to reduce exchange rate risk.

In addition to broad geographical diversification, the sector allocation is broadly spread across various industries, with the technology sector accounting for the largest share on the equity side, while the financial industry has the highest weighting, particularly in bonds.

On the bond side, a distinction is made between government and corporate bonds. The aim here is also to achieve a diversified investment profile across different issuers and maturities. Sustainability criteria are taken into account here with our ESG approach and the focus on “green bonds”. To reduce the credit default risk of individual bonds, investments are only made in investment grade bonds and therefore in companies that have a high credit rating but also pay attractive interest rates, which explains the higher proportion of BBB-rated bonds.

What historical returns have I achieved with the Mountain portfolios?

The historical portfolio return of the UnitPlus Mountain series has been positive in the last 4 out of 5 years, with returns in the double-digit plus range in three years. Only in 2023 were the portfolio returns negative due to major market distortions in the wake of the rapidly rising interest rate environment.

The German DAX share index, which is made up of the 40 companies with the highest market capitalization, is used as a benchmark (= comparative index). It should be noted that a one-to-one comparison is not possible, as the UnitPlus Mountain portfolios always include a bond component. Bonds bring more stability to the portfolio and reduce the risk, but generate a lower return in the long term. Nevertheless, the Mount Everest portfolio, which invests 90% in equities and 10% in bonds, has generated a higher return in three out of five years with a lower overall risk. The overall performance of the UnitPlus portfolios can therefore be described as above average.

Why is a long-term investment with UnitPlus worthwhile instead of other investment options?

The main reasons are professionalism, the low-cost structure, and the possibility of combining the Mountain series with other UnitPlus products.

While brokers are particularly interested in trading as much as possible and investing in individual ETFs is good, but not good enough for a professionally balanced investment, the Mountain series is designed to combine a professional investment with attractive risk/return ratios over the long term. As the portfolios are constantly monitored and adjusted if necessary, no further effort is required after the one-off investment or the creation of a savings plan. In a balanced portfolio context, individual ETFs cannot make this possible, which leads to higher risk and more potential for error in the long term.

Compared to actively managed funds, where the fees can average around 1.5% of the money invested per year, or so-called “robo advisors” with fees of around 1.0%, the Mountain portfolios can be classified as above average at 0.5% of the money invested, which increases the long-term return expectation.

In addition, the Mountain portfolios can be combined with any number of other portfolios and complement each other very well with CashPlus as an alternative to call money and FestPlus as an alternative to fixed-term deposits. This makes it possible to use UnitPlus for the short and long-term investment horizon. With the UnitPlus bank card in combination with CashPlus, you also receive the highest-interest bank card in Europe and a cashback of 0.10% on every card payment.

Statutory safety notice

This article is not intended as an investment recommendation. Nor is it intended as advice to buy or sell financial instruments. There are risks associated with capital market investments that can lead to a total loss. Historical performance is not a reliable indicator of future performance.

Fabian Mohr