Tougher times are ahead for wealth managers.
(Photo: dpa)
Frankfurt Wealth managers must prepare for tougher times. Their income depends on the development of the stock exchanges because they snatch a portion of their managed assets as fees. And with falling prices on the capital markets, their stocks are falling. In addition, investors who have been unsettled by the recent sharp price fluctuations in shares are often withdrawing capital from funds and index-tracking, exchange-traded ETFs. Management consultants expect that fund providers will have to adjust to a tenth less income, in the case of a recession even up to a quarter less. But that doesn’t seem to be the case for a small group of fund managers.
Investors have recently withdrawn significant amounts of capital from classic funds on stocks and bonds and also from ETFs. The fund rating house Morningstar, for example, reports that the month of May in Europe brought the sector its worst result since the corona month of March 2020, with net outflows of 15.8 billion euros.
But well-known fund managers were able to continue to attract new investor capital. The asset manager Flossbach von Storch reports on inflows into his flagship fund, which consists of various asset classes and is managed by company founder Bert Flossbach himself. Likewise, the well-known fund manager Klaus Kaldemorgen of the fund company DWS has recently stabilized sales with his self-named mixed fund. The asset manager DJE Kapital of Jens Ehrhardt, who has been a fund manager for more than 40 years, also continues to report inflows.
During the crisis, investors seem to be turning to well-known names instead of the inexpensive ETFs that were so popular before. For these wealth managers, this means good returns, as they are among the active managers who sometimes have their strategies paid for at ten times the fee rate of simple ETFs.
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However, the fund managers now have to show once again that they are actually worth their money. The vast majority of active managers do not beat their stock market comparison indices, as short-term and long-term studies for Europe, but also for the USA, show again and again. Only if the fund managers convince investors with better returns in the long term will they remain winners in the crisis.
More: Which strategies well-known fund managers are now using