With bonds hardly yielding any interest anymore, now is the time for investors to move out of their comfort zone and enter the race for returns.
At least that is the view of many asset managers, who in the current economic climate have little choice but to convince their customers to make riskier investments. So what better time to celebrate the best performing among them.
At a state reception in Munich yesterday, the journal Elite Report and media partner Handelsblatt named the best 44 asset managers in the German-speaking countries. The team, with the help of auditors, analyzed 500 accounts containing total assets in the double-digit billion euros, evaluated about 800 real-life cases and examined corporate financial statements, awarding ratings to each institution.
Eight asset managers were honored for their outstanding performance. For the sixth time in a row, three banks achieved the highest number of points in the ranking: Berenberg Bank, a Hamburg-based private institution, Frankfurt's BHF Bank – now owned by a group of investors headed by Leonhard Fischer, the chief executive of RHJ International – and Hamburger Sparkasse, Germany's largest savings bank.
Three institutions achieved the highest possible score for the third time in 2014, Bremen Landesbank, the Liechtenstein private bank Centrum Bank, and Schoellerbank, a subsidiary of Bank Austria. Wergen & Partners, a non-bank Swiss portfolio manager, ranked among the top providers for the second time. Donner & Reuschel, a private bank, moved up in the ranking. These top banks are followed by a group of 23 asset managers, who were also given the highest award, "summa cum laude."
"Competition begets quality," said Hans-Kaspar von Schönfels, founder and publisher of Elite Report, referring to the stability of top-rated advisers. Still, the top echelon remains small in comparison to the number of providers analyzed. Elite Report rated only 12 percent of the 360 companies it analyzed.
Only investors who are willing to diversify globally are still getting returns. Hans-Kaspar von Schönfels, Founder and publisher, Elite Report
Investors who are unwilling to accept the possibility that their assets could lose value are hardly earning any returns at all anymore. But investment advisers who shy away from drawing their customers out of the comfort zone of supposedly risk-free return are not doing their jobs well.
"Anyone who tells his customers what they want to hear and is unable to convince them to buy stocks" is doing a bad job, said Mr. von Schönfels. "Only investors who are willing to diversify globally are still getting returns."
In fact, by applying systematic risk-control measures, investors can even earn top returns in the double digits this year. On average, good money managers have preserved their customers' assets and have even achieved returns of 3 to 4 percent, added Mr. Von Schönfels. But top investment professionals have achieved returns of more than 10 percent, even without being reckless. Still, good performance among asset managers remains rare.
Mr. Von Schönfels is also convinced that only quality can prevail in the current low-interest phase, because investors "will not be content with melting assets in the long run," he says. Nevertheless, good asset managers benefit from the cluelessness of many investors and the incapacity of some bank advisers. Many good money managers are seeing large amounts of incoming capital.
According to Marc Tüngler, the managing director of the German Shareholders' Association, rankings of money managers like the one published by Elite Report offer investors an overview. "Rankings provide an orientation to the market," says Mr. Tüngler. But before investors sign a complex asset management agreement, he advises them to take a careful look at an asset manager's long-term performance, and at the criteria he or she applies to investing money.
The author is a Handelsblatt editor specializing in the investment industry. To contact the author: [email protected]lsblatt.com