Avoid the complexity

Bart van de Ven, investment adviser at Accuro Independent Private Bankers, describes the firm’s fund selection process.

Antwerp based Accuro relies on a team of 12 individuals including nine advisers of which four are directly involved in fund selection like Bart van de Ven.

The independent advisory firm invests either directly in equities and bonds, in tracker funds or in actively managed funds.

Funds represent 60% of the investments made by Accuro. Around 50 strategies have a spot on the buy list, all being invested in bonds or equities.

Accuro excludes alternative strategies from the selection.

“We try to avoid unnecessary complexity. We do not advise in structured products, alternative or smart beta funds. Complex products are often expensive, not transparent and, last but not least, performance disappointments.

“We typically do not invest in infrastructure or distressed securities. Our clients have long-term objectives and we help them to achieve these objectives by working alongside them on long-term strategies,” says van de Ven.

Accuro looks at the quants side through screenings of Morningstar’s data before conducting a qualitative due diligence.

“Our analysis starts with an algorithmic based analysis. This quantitative analysis is only approximately 20% of the analysis work. The big chunk of our analysis is qualitative.”

“We want to find out whether a strategy is able to continue generating strong performance going forward. We go deep in understanding the investment process and the thinking of the people. We talk to the portfolio managers and ask the right questions,” van de Ven points out.

Among other red flags for an investment in a fund, van de Ven picks up fund size and style drift.

“Fund size can be a red flag. Multiple studies show fast rising AUM can destroy alpha,” he says.

Van de Ven explains that he recently met a European equities fund manager whose strategy had an excellent track record mainly driven by catching alpha on mid-caps.

But as the fund size increased to over €4bn, the strategy’s outperformance flipped into a dramatic underperformance.

“The portfolio manager decided to dispose of some subfunds under the same strategy. These disposals plus outflows from disappointed investors led to a decrease in assets to a manageable size. A year later the fund turned back to outperformance,” van de Ven says.

He adds: “Style drift is another concern. Today lots of highly-ranked funds run a similar style: quality growth. I like the style but we should analyse why those funds rank highly.

“Is the outperformance explained by the style only, or is the strategy working in different markets? We want to avoid the one-trick pony.”

To that end, Accuro’s fund selection results in a mix of small boutiques and big global asset managers.

“We have selected big players for our global bond strategy. We think being big in global bonds is a huge advantage. Small boutiques can be more appropriate for example in European equities. Sometimes small is beautiful, sometimes big is better,” van de Ven highlights.

Regarding moves on the buy list, van de Ven says Accuro has removed some bond funds.

“Low or negative yields in the European bonds market make most bonds unattractive for our clients. We prefer to stay in cash.

“We also added a global high yield bond fund run by a manager with a broad global mandate. The manager has the skills and flexibility to go where you get rewarded for taking risk.”

Accuro charges an advisory fee to its clients. Van de Ven says the firm keeps its overheads low and makes sure there are no hidden costs embedded in products.

Accuro’s investment adviser highlights studies that have found out funds that can afford to ask above average fees tend to be future underperformers. Regarding fees, he also stresses regional differences.

“The total expense ratio of French funds are typically above average. Management fees often exceed 2%.

“A fund of a French boutique we invest in since some time ago offers two entities with the same strategy; one French domiciled and the other Irish domiciled.

“We invest for our clients in the Irish domiciled fund, a 1% total expense ratio benefit for our clients,” van de Ven concludes.


Bart van de Ven is investment adviser at Accuro Independent Private Bankers in Antwerp, Belgium.

He is also member of the Accuro Investment Committee and responsible for fund selection.

Van de Ven has 20 years of experience in private banking. He worked for 10 years at UBS in Belgium as a director and prior to this 10 years at ING in the Netherlands in several private banking roles.

Van de Ven holds a Certified European Financial Analyst (CeFA) degree.

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