Euro am Sonntag interview: Fund manager Linden: “Do not consider the regulation to be effective” | message
by Christoph Platt, Euro am Sonntag
€ uro on Sunday: Many fund managers are unwilling to speak publicly about the stocks in their portfolio. Why?
Patrick Linden: Various aspects come together here: On the one hand, no public “recommendations” may be made. If this is interpreted by a fund manager, the Bafin can intervene and issue warnings or fines. This happens regularly – and no fund manager wants to experience that. Regardless of this, as part of their active management, they do not want to reveal their good ideas and hard analytical work before the laurels are reaped. Or conversely, give a tip that does not develop as expected.
Investors would like to know what a fund manager thinks about the stocks they hold. Why shouldn’t they find out why he chose them?
That is not right. We maintain a very transparent exchange of portfolios and positions held in direct dialogue with our invested customers. However, we also avoid broad single-title recommendations, e.g. in the media, for the reasons just mentioned. Of course, communication is not prohibited.
Do active managed funds have disadvantages compared to ETFs due to this reluctance? With the latter, you know exactly what’s inside.
We cannot see any disadvantage. The positions in ETFs result from passive index compositions and are not subject to any primary opinion or analysis. Active managers, on the other hand, deliberately choose those stocks or bonds for their fund that they identify with future development potential. These are two fundamentally different ways of putting together a basket of stocks or bonds.
Are fund managers in Germany more reluctant to comment on their portfolio than managers in other countries?
European regulation is uniform and should therefore also monitor compliance with the rules to the same extent. The compliance department of a fund company often specifies the interpretation of the rules. In general, the larger the fund provider, the more cautiously, in my observation, compliance is acting on these points.
Do you think the regulation of the fund industry is excessive, appropriate or too lax?
I do not think the regulation is effective. Today, the investor has to confirm with a signature or a mouse click that he has read and understood all fund prospectuses etc. before making the purchase. My subjective perception of the actual practice in consulting or online broking is different here.
Which regulation within the fund industry is beneficial for private investors, which is harmful?
The grouping of funds in risk classes could be discussed. Bond funds, for example, are still classified as “safe” today, with both bonds and stocks suffering heavy losses. The only difference lies in the short-term fluctuations in the market value of the asset classes, which equates regulation with risk. Anyone who invests in “safe” German government bonds for ten years today even receives a loss with a current annual return of minus 0.4 percent. Many stocks, although volatile, offer better returns over a decade.
Image sources: Clartan