How does Selma select investment products?

Updated 4 years ago by Patrik Schaer

Note that although this is a nice read, you don't have to understand these details to invest with Selma 🙂 

Selma looks through all available investment products and picks the best ones – from different providers.

Selma has a strict no kickback policy. This means that we are unbiased and independent in our product choices.

Selma selects investment products (especially ETFs) based on the following criteria

Hard Facts – Quantitative Factors

  1. Costs

    How expensive the investment products are. Measured with TER (Total Expense Ratio).
  2. Amount of Managed Assets

    How much money is managed by a fund. Measured by AuM (Assets under Management).
  3. Tracking Error

    How precisely the product is tracking the underlying index.

    Selma prefers full physical replication over synthetic replication. Also ETFs with low tracking errors are preferred.
  4. Liquidity

    Selma favours large AuM and multiple market makers. High liquidity and low spreads are preferred.
  5. Low price per share

    In order to make rebalancing easier and more efficient, Selma prefers ETFs with low absolute prices.

Qualitative Factors

  1. How well does the index cover the asset class?

  2. The quality of the underlying index. What does it have in it? How is it calculated?

  3. Do the investment products have negative tax consequences in your home country?

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