Deutsche Bank Wealth Management has launched a new series of strategic asset allocation (SAA) ETF-based funds in Europe, particularly in response to demand from clients for simple, cost-effective, long-term investment portfolios designed to address the challenges of unstable market cycles.
Christian Nolting, global chief investment officer for Deutsche Bank Wealth Management explains that the first discussions about the launch occurred last year but the eventual timing has proved spot on.
“It is timely in a way,” Nolting says. ““But we have always said it’s important to look at long-term SAA so you don’t lose your nerve if there are massive market corrections.
The new products can also include an element of Deutsche Bank’s systematic hedging strategies, Risk Return Engineering, which is more usually found in an institutional product, Nolting says.
“Our portfolios have risk return engineering where they have downside protection built into them. This is normally something that only institutional investors have access to through a segregated account where you need many millions in assets.”
In terms of the ETFs the firm is using to create the portfolios, Nolting says that they have experienced no problems during the early 2020 market volatility.
“We have been happy with the ETFs we are using. There have been no massive issues at all. It is important to look for ETFs that provide enough liquidity in the market and are stable in times of turbulence.”