The first half of Protected Investing
Your Vantik account is designed to help you retire with more money than you would have saved on your own. We do this by placing your savings in the Vantik Fund. It’s a fund built on risk averse, long term and varied investments. Contrary to most types of investments your contributions to the fund are protected by the Vantik Trust when you retire.
Cash to fund shares
When you keep your savings in a normal bank account the exact value of your money stays the same one day to another. In financial terms, this is simply called cash. It’s good to keep your money in the form of cash if you’re going to use it soon (say, if you’re saving up for a holiday). If you’re building a nest egg over several years you should consider placing your savings in a passively managed fund. Saving money in this kind of fund has two important effects:
- You now have a chance of ending up with much more money than you could have saved on your own. History shows that the chance of profit increases the longer time you leave your savings invested.
- Compared to normal cash, the precise value of your savings will start moving up and down, often day to day. This is because the Vantik Fund follows the average performance of many markets over the world. Because the Vantik Fund is optimised for long term stability, rather than the maximised profits, the fluctuation tend to be less extreme, but it’s still noticeable.
Growing the money in the fund
The Vantik Fund makes use of Nobel prize winning science to invest its money into many markets, places and materials, all over the world. Or, for the financially literate: it’s a mutual fund designed according to Modern Portfolio Theory with highly diversified range of assets. When these many investments do well, you get returns. The approach to investing can be summarised like this:
- Aiming for a return of 3% per year
- Long term security over of maximised profit
- Diverse investments all over the world
- Passive, scientific investments
1. Aiming for a return of 3% per year
It can be hard to comprehend what importance 3% (after all costs) has to your savings but in the long term it makes a big difference. To put it in more relatable terms: Assuming a growth rate of 3% per year, any investment today will have doubled in size about 23 years later. And for younger savers: a period of 38 years would make your investment triple in size. Part of why this can be surprising if due to an effect called compound interest.
2. Long term security over of maximised profit
The investment philosophy behind the Vantik fund is not to maximise profits at the highest rate possible, as it introduces high risk. Instead investments choices are made to keep as close to our target return as possible (3% after all costs) while keeping security as high as possible.
3. Diverse investments all over the world
The Vantik fund makes use diversification: so despite investing into one fund you’re still putting your eggs in hundreds of baskets. No single market in the world is responsible for the growth of the Vantik Fund, but rather you’re investing in the human economy as a whole.
4. Passive, scientific investments
Investments are made with proven maths and science by our investment managers. Because the Vantik Fund is built for the long term it’s a so called “passively managed fund”. This means that our fund managers don’t make bets based on their subjective perspective or chase market trends. Instead they simply shift the allocation of shares between the main categories of assets every year to get as close as possible to the 3% yearly return.
More about the Vantik Fund
Your contributions are safe when you retire
You can invest your retirement savings in many places but the Vantik Fund has an important benefit over normal funds: any money you put in the fund is protected by the Vantik Trust when you reach retirement age. In other words, you set yourself up for a chance of retiring with more money than you saved yourself while minimising the risk of losing a single cent from your retirement nest egg.
Regulated by the German Federal Financial Supervisory Authority
The Vantik Fund is approved and regulated by BaFin; the Federal Financial Supervisory Authority in Germany.
Investing and risk
Despite being a risk averse fund, as with any form of investing, your money is at risk. The value of your savings can go up as well as down, day by day, year by year. Historically, the risk decreases the longer the investment period. The Vantik Trust reduces the risk of losing money significantly but it’s protection does not cover withdrawals before your retirement.