The investment funds chosen by our bank all come from highly reputable providers, and are of a size or specialisation that can only be achieved through years of market experience. Investment funds have existed for over 200 years, but few funds have a track record of high quality going back over decades. Many funds are launched, follow the latest fashions, and then have to be suspended or merged with others, so that they disappear from the market.
We believe it is better for your financial security to use only well-established investment funds and companies, and not to pose as a “business angel” providing venture capital for start-up companies, since only a small number of new ventures ever really get off the ground. Studies show that over 90% of funds fail to beat their benchmark over a 10-year period. It is true that a fund may become too cumbersome beyond a certain size; but in such a case the fund is closed. On the other hand, funds with assets under management worth less than EUR 100 million have high costs in relation to their assets, and these costs are charged to the fund. As a result, customers enjoy a relatively weaker performance compared to large funds. Also, experience shows that in crisis situations a smaller fund is more challenged in many respects, especially when many customers simultaneously withdraw capital from the fund at short notice.
The best investment funds are able to outperform a benchmark index over long time periods, consequently they charge higher fees compared to passive funds. However, this does not apply to mediocre funds or those in the lower performance quartiles. In the interest of customers, the purchased investment funds therefore need to be monitored constantly.