QE, ETFs and absolute return key themes at 2015 Fonds professionell Kongress
More than 7000 visitors gathered in Mannheim to attend the 2015 Fonds professionell Kongress, the two day event held on 28 and 29 January in Mannheim is organised by the German publication Fonds professionell, aimed at institutional investors, financial advisers and independent financial service providers.
Key themes of the event were the implications of quantitative easing and strategies such as absolute return in order to combat the current volatile investing climate.
The event was kicked off by keynote speaker Jordan Belfort, who became famous through the movie Wolf of Wallstreet. He warned the audience with a spiderman quote: “With great power comes great responsibility.”
Jürgen Stark, former ECB chief economist and another keynote speakers argued: The eurozone has never really left its crisis mode.” According to Stark, while the current accommodative monetary policy is boosting stock markets, it has deflected from the need to introduce structural reforms in order to make the eurozone economically viable.”
Indeed, while the German stock market index DAX has started 2015 with the strongest growth levels among European stock market indices, most selectors were concerned about achieving returns in a low interest environment whilst being aware of volatility risks.
Consequently, presentations by German asset manager Sauren on the interest trap and a panel debate on the future of the asset management industry gained a lot of traction. “Draghi is now the patron saint of equity investments” argued Christoph Bruns, fund manager and member of the board at Loys AG.
But with stock markets on record levels, key question remained whether investors hadn’t missed the boat already. Volker Schnabel, chief analyst at Mack & Weise stressed the volatility risks of quantitative easing, he is currently holding up to 50% gold in this portfolio.
Meanwhile, a panel organised by Star Capital fund manager Markus Kaiser discussed ETF’s and passive strategies as investing opportunities. The use of ETF’s will become a matter of course among clients and advisors, asset allocation is the new alpha” argued Roget Bootz, head of Public Distribution EMEA Passive at DeAWM. According to Michael Winker, director portfolio management at FERI Trust, ETF’s and other passive investing strategies are set to cover 30 to 50% of the market share all mutual funds within the next ten years. “
Others sketch a more upbeat picture. Asoka Wöhrmann, CIO at DeAWM highlighted that he is currently more optimistic about European compared to US equities. “Even if everyone says so, equities remain our first choice, the weak euro continues to make European exports attractive” said Wöhrmann.
However, as a complete focus on equities remains unrealistic for most selectors, multi-asset products continue to be a popular alternative. Echkard Sauren, founder and fund of fund manager at Sauren AG warned of the pitfalls of multi-asset investing: “With the persistence of low interest rates, conservative multi-asset funds are set to achieve returns of 1%” he argued. “Given the low interest challenge, the time is ripe for absolute return, low interest can be a trap, but they can also be turned into an opportunity if one is well positioned” he concluded.
Picture credit: © Christoph Hemmerich on behalf of FONDS professionell