Living Moments - N°2 Edition 2014

Absolute Return. Many more investors would invest in stocks and shares if the risk of making painful losses was not so great. Zürcher Kantonalbank Österreich has developed hedging strategies which make this step easier for a wider range of invest- ment types. “The strategy propagated everywhere of entering into more risk in order to guarantee asset preser- vation after taxes is of course correct. Yet as advisers we really need to go further and develop options so that this risk remains manageable,” says Herbert Lindner, Head of Private Banking International at Zürcher Kantonalbank Österreich. Investors want drops in share prices to be absorbed and fluctuations in the portfolio reduced, and at the same time they want a high level of investment at times when share prices are going up.“This all sounds a little bit like squaring the circle”, admits Lindner, “but to a certain extent it is actually possible.” The strategists at ZKB Österreich have spent a long time working on the issue of how to include safety nets in a portfolio without paying a high price in the form of missed profits. “The first step with this always involves the following question:What pro- duct fits which customer need?”, explains Lindner. “This is because not every strategy is suitable for every investor.” Christian Nemeth, ZKB's chief strategist makes it clear, that hedging always comes at a cost. “And this cost increases the tighter the safety net needs to be stretched.” However, Nemeth believes that private investors often don’t even need this high level of security. “They are responsible for them- selves and generally have a longer-term invest- ment timeline. This is why we have expanded our product offerings especially for private customers beyond the model with fixed loss limits.” The opportunity to implement a new and interesting idea arose for the Austrians in January when they took over a mutual fund from a family office. “We are setting up an Absolute Return Portfolio.We will then be able to use this product in Private Bank- ing.” These so-called Absolute Return Funds have become tremendously popular in German in recent years. The objective of the funds is to generate earnings above zero each year independently from the capital markets wherever possible. “There are nowwell over 100 funds inGermany operating under this label”, states Nemeth, “which is good for the investor on the one hand because the selection is increasing. However, on the other it is also bad since they are unable to cope with the choice. The products ultimately follow completely different strategies, are difficult to compare and cannot be figured out without the corresponding knowledge.” The experts at ZKB Österreich nowsolve this selection problem for their customers. However, they do not The product obviously retains what the motto promises: more profits are made over the long termwhen you lose less in difficult market phases Für Anleger, die eine höhere Aktienquote anstreben, aber gleichzeitig vor zu hohen Risiken auf der Aktienseite Angst haben, entwickelten die Österreicher ein ganz anderes, völlig neues Konzept For a long time, the strategists with ZKB Austria have been concerned with the question of how to implement safety nets in a securities portfolio without having to pay a high price in the form of lost profits 7TaTYR 8ZXPY_^ Edition 2 · 2014 66 Anzeige