In order to be granted the seal, a fund must meet five criteria:
1. Flexibility - the fund must invest in several asset classes / regions / industries and be able to flexibly react different market phases. Active asset management funds are generally eligible.
2. Profitability - the fund must have proven the ability to outperform competitors. The decisive element hereby is its return compared to a group of similarly oriented funds.
3. Secure hedging - the fund should meet eligibility criteria in terms of wealth preservation as well. This can either manifest in a defensive strategic selection of asset classes (limited proportion of shares, investment mainly in bonds or in equally safe asset classes), a sophisticated multi-investment or a special hedging system. Possible hedging system options are, for instance, an absolute return approach or another form of overlay.
4. Sustainability - foundation investment must increasingly meet sustainability criteria. Achieving the highest possible degree of ethical, ecological and social sustainability is, however, not the main concern. What matters is a convincing and tenable concept.
5. Cost-consciousness - foundations are investors that handle rather large volumes and have long-term objectives; i.e., they may reasonably expect goodwill as regards a fund’s fee structure. This in particular applies to the management fee (in connection with a profit-dependant component) as well as to other distribution and portfolio commissions.