Change of perspective on the markets – rapid response required

Munich, 30 January 2023 – The current market phase is causing many asset managers and family offices to rethink their tried-and-true strategies. “Clients frequently demand to know how their chosen strategies will work with interest rates rising after a period with zero interest rates”, says Daniel Knoblach, General Manager of Super Global GmbH. “Regulated and unregulated family offices alike as well as asset managers are increasingly using individualised indices that allow them to quickly offer diversification to their clients.”
“At the moment, new trading strategies for liquid markets are in particular demand and are being launched”, Knoblach highlights. “Pressure to do so is frequently coming from clients who are looking for security in changed market conditions.” Familiar strategies are being questioned – and supplemented by providers with new strategies. “We are talking about cases of internal diversification”, Knoblach says. “Big funds or other vehicles that have been successful for many years are now joined by sector-specific or theme-specific alternatives.”

“For example, a successful asset manager with a fund heavily focused on capital preservation recently launched a more offensive, almost aggressive fund into the weakness of the market”, Knoblach explains. “Others are taking a similar approach, taking advantage of market weakness in certain segments to build exposure.” Numerous others, in turn, do not consider the threat of a deep recession over and are relaunching highly defensive products alongside their existing strategies.

What they all have in common is that they are meant to be marketed rapidly. “The change in the market environment is also supposed to be made investable for customers as quickly as possible”, says Knoblach. “Both funds and securitisations are potential vehicles for this approach.” Regulated and unregulated asset managers are able to take advantage of the opportunities offered by digitalisation. “Nowadays, there is a much wider range of data available that can be used to implement quantitatively oriented strategies based on clear criteria, without having to establish one’s own stock or bond picking expertise”, Knoblach points out.

As part of recently observed trends, family offices who do not hold the appropriate licences under the German Banking Act are permitted to act via indices created specifically for them: “A customised and rule-based index is created for the desired strategy, which is then mapped in a fund according to the regulatory requirements”, Knoblach says. The increasing availability of data, intelligent systems and interfaces additionally creates the opportunities to implement strategies efficiently and with wide autonomy.