Why Use August Invest Solutions

Paul Samuelson, Nobel Prize (1970)
William Sharpe, Nobel Prize (1990)
Harry Markowitz, Nobel Prize (1990)
Eugene Fama, Nobel Prize (2013)
Investmentexcel.com is philosophically and mathematically founded on the framework calibrated by this panel.
“Markets are efficient, but there are different dimensions of risk and those lead to different dimensions of expected returns. That's what people should be concerned with in their investment decisions and not with whether they can pick stocks, pick winners and losers among the various managers delivering basically the same product”

“I can't figure out why anyone invests in active management (…). Since I think everything is appropriately priced, my advice would be to avoid high fees”
Academic approach and BlackRock Inc.
Professor Fama with these famous quotes, popularly summarizes an almost unambiguous signal to investors from the academic world. Namely, access as cheaply as possible, a fully diversified portfolio that is optimized according your individual risk preferences (risk-appetite). A two-step procedure that involves a fast PC, Exchange-Traded-Funds (ETF) and some human touch.

It does NOT involve any active or speculative trading decisions throughout the investment horizon. Markets are efficient and any excess risk-adjusted return can only be achieved from luck. Our approach relies on sophisticated algorithms and the approach from the world’s largest asset manager, BlackRock Inc.

Redundant banks and FREE access
We are NOT a bank. As such, you never transfer your money to any black-box account by us. All your cash, equities, bonds etc. stay in your own custody and account. However, we do provide or suggest professional bank solutions in wealth management. As investor you do not need expensive bank relationships. Say, your bank had 1.000 people instead of 1 working on just your portfolio. Would it improve results? No, this is the core message from academia.

All you need is simply an access to an “ready-to-trade” portfolio solving your individual preferences for risk and hence return. August Invest offers all this for free through an access to a simple PDF file that describes the exact nature of the investment.

Broad range of solutions with home-bias
Currently, Investmentexcel.com offers AIS to investors in the United States, in Great Britain, in the European Union,in Denmark and India. What we mean by this, is that for each of these regions, we offer 4 standard solutions (portfolios), all with a regional home-bias and 8-12 underlying ETF’s with regional currency as base currency.

India is though a special case as currently INR denominated ETF’s are not present beyond the broad Indian Stock Market. As such Indian investors in AIS has a substantial USD/INR or EUR/INR risk. The exchange rate (FX) risk is however compensated for in expected returns calibrated implicitly from the FX Forward Premium, as this is the (opportunity) cost of closing down the FX risk in AIS India.

We offer 3 classical low, medium and high-risk profiles, and 1 profile which is constructed as a “green” climate-friendly alternative. August Invest Green. All solutions are constrained by standard deviation and asset class weights. Additionally, we offer customized solutions, where users or investors on Investmentexcel.com can submit an online request to have constructed optimal portfolio strategies. Also delegated benchmark construction.

Rebalancing of solutions
Your investment portfolio will not be traded over and over again following random fluctuations in the financial markets. Your portfolio is an equilibrium long portfolio, that will be rebalanced (traded) as a minimum on the 30.06 and 31.12 in every calendar year.

However, Investmentexcel.com further rebalances if either of the following conditions materialize. 1) market drift is so large that your portfolio is significantly out of sync with promised risk settings, or 2) if, for some reasons, equilibrium conditions have changed. The rebalanced solutions will be freely available on the site. Would you prefer a personal monitoring where you will receive a notification and explanation in due course, this can be achieved by signing up for a monthly or yearly subscription on the "Read More" links on individual AIS solutions. An Excel and video guide for rebalancing is available for free here

Low costs and full diversification
Banks charge you very high fees that over time accumulate and reduces your current investment by approximately 50% on a long horizon. With AIS you pay only for the underlying fees in the ETF funds, which implies for our August Invest Solutions, a total fee of around 0,25% p.a. This contrasts to active investment fees of 2,25% p.a. or other Robot all index platforms with 1,25% p.a. See here for further on costs. The vast 500+ securities inside the individual ETF’s for a broad range of asset classes and regions, secure full diversification.
Historical performance
We have launched our solutions in 2019, so historical results are obtained, as it is standard in the financial industry, by simulation backwards. From this presentation (link to read more US) it is clear, that the 4 standard risk solutions exhibit strong diversification benefits, and outperform simple equity/bond portfolio over 10 years. Both in returns and in risk-adjusted returns. Consequently our 3 traditional Low, Medium, High solutions are in top on Sharpe Ratios (>1). Also interesting is that these 3 solutions have delivered the highest returns. Why) Cost-difference. Higher cost is lower return
Transparency
Banks do not deliver transparent solutions. You will not in a bank be invited into the mechanism of your portfolio construction. You will not notice that banks switches low-cost to high products in your portfolio. Even into their own products. You will not find the total portfolio holding publicly and you will not find bank’s expected return and risk. We upload the entire portfolio and all its holdings including ISIN codes, currency risk, equity risk, bond risk etc. We show the expected risk and expected return. Not, just transparency of realized actual results.
Responsible and “Green” investment
All solutions have a high degree of responsible score. Better known as Environmental, Social and Governance (ESG) score. ESG is included on a significant part of the equity holdings in the solutions. The “Green” alternative solution, August Invest Green, has a 30%-45% holding of green technology equities.