Tradition meets Innovation

Nick Jenni, Co-Head of Investment Management & Solutions at swisspartners, on sustainable and future-proof investments

Sustainability is a key issue everywhere. At swisspartners, too, we are seeing strong demand for sustainable investments. With effect from 1 January 2022, we officially launched our sustainability strategy in asset management. swisspartners clients now have the choice: Do I opt for a more ‘conventional’ investment strategy, or should I go for an investment product centred on factors such as sustainability and corporate social responsibility?

Three-step process to evaluate and screen for sustainability

The financial markets so far lack a set of uniform sustainability standards. swisspartners has developed a three-step approach to evaluate how well an investment meets clear-cut sustainability criteria, based on databases such as Morningstar (Sustainalytics).

Step 1: Exclusion criteria

First of all, the swisspartners experts use database filters to exclude specific sectors and activities that are a no-go in terms of sustainability. Examples include weapons manufacture or trading, nuclear power and environmental destruction (coal-fired power plants), the tobacco industry, and human or labour rights violations.

Step 2: Best-in-class-approach and positive screening

The best-in-class-approach allows swisspartners cherry-pick the companies with the best sustainability performance in a specific sector. To this end, potential investees are ranked against their sectoral peers on the basis of sustainability ratings. Only companies with at least a specified minimum rating are eligible for investment. Contrary to filtering out the negatives, in this positive screening approach we pinpoint candidates based on upside criteria such as environment-friendly products and good corporate citizenship.

Step 3: Ensuring transparency

The funds we select for our investors must provide transparent sustainability data in Morningstar’s analysis. If they fail to do so, we seek out alternatives wherever possible.

Innovative investment: digital assets

Another strong growth market alongside sustainable investment relates to digital investments such as cryptocurrencies. Beginning in summer 2021, swisspartners has extended its comprehensive range of services to include the management of digital assets. Thanks to a partnership with Sygnum, a regulated Swiss bank, our private clients are able to hold digital assets with us as asset managers – securely and in full compliance with the rules. In addition to efficient trading in cryptocurrencies, this partnership also simplifies safekeeping with regard to digital assets. Investors for whom the minimum investment in this approach is too high have various alternatives:

• Exchange-traded products based on
• cryptocurrencies
• Investment funds
• Certificates
• Personal wallets

Blockchain: innovation meets tradition

In addition to cryptocurrencies, a further new technology offering attractive investment opportunities is blockchain. This technology is growing in importance across many different sectors. Together with external partners, swisspartners identifies and analyses business areas where new ventures are springing up – mostly in the form of private equities or startups.

Traditional industries are also looking to future uses of blockchain. Established names such as Microsoft, Amazon and Continental are taking a highly future-oriented approach and anticipate strong long-term returns. So even a ‘conventional’ portfolio can be highly innovative.