By the end of 2016, we surveyed German wealth managers on ETFs and mutual funds (UCITS). A major part of the conversations focused on challenges the wealth managers are facing on their sales side. Plans to reach clients and potentials over online channels and how Robo Advisory could be part of a solution, were among the topics covered. Continue reading
We are currently cooperating with wealth managers and private banks in Germany for a new ETF study. A major focus is on the implementation of ETFs, substitution of active funds, and the most important pro and cons from the wealth manager’s perspective. The challenges from regulation (Mifid2) and the continuous digitalization (robo advisors) are other relevant topics encompassed.
A survey is a vital part and is taking place at the moment. If you would like to participate (only wealth managers and private bankers), please contact us. Your data and privacy will be protected. Subsequently, you will receive comprehensive material on findings and future developments.
News over the last few days suggest that amid the Greek debt crisis, a potentially more important China crisis has emerged. Looking at the following chart, one can see a nearly identical downward move of German and Chinese (Hong Kong) stock markets. Continue reading
The volatility indices for US and European equities currently exhibit a wide gap. In response, we take a look at the relation of these two indices over the last few years. Without diving deeper into the indices compositions or forward curves, we want to find out, which influence the current volatility environment might have on equity markets. Continue reading
Over the last five years, the S&P 500 index had nine drawdown periods with downward moves of more than 5% from its 1-year high. We evaluate some characteristics of these drawdowns and show a simple strategy which would have benefited in these periods. For the future, this strategy might still be attractive for short-term market timing or as an equity rotation strategy. Continue reading
Update in January 2015
In this short case study we show that within a regional equity universe diversification is achieved by combining independent strategies. Sharpe ratios can increase significantly even without a weighting methodology or an overlay for explicit protection. Continue reading
Update in January 2015
Trend following strategies did a good job timing the markets during the 2008 crisis and continued to work well in the recovery 2009. For the subsequent years, these systems seem to have failed amid political influence on markets. Blind faith in optimized and complex systems is dangerous. We are convinced that more robust trend following approaches offer added value. Robustness is achieved by making the right assumptions and by trend classification. Besides looking at calculation methods, we also examine capital flows and especially behavioral market patterns. Continue reading
With the rise of exchange-traded funds (ETFs) in the last few years, the discussion about active vs. passive investing has taken off. Portfolio managers that see their strategies in competition with ETFs seem to be the strongest supporters of active investment approaches. The meaning of “active” is often just equated with deviation from a market index. Smart Beta could easily take care of this. We are convinced that active management adds value for investors but we believe “active” stems from activity. The question then turns into “How to combine active and passive?” Continue reading
Performance fees for investment products are often criticized and perceived as not fair by investors. The structure of performance fees can be a reason for potential investors to shy away from a manager. There is a way to design performance fees to better align interests of investors and managers by including risk into the definition of performance. We show a simple model that prevents managers from increasing risk at the expense of their investors. Continue reading