Speak to German wealth managers and you may well hear them scorn the dominant domestic asset management players.
These fund selectors profess to prefer boutiques – specialists in particular areas, more attentive to their needs. Discussing leaders in ESG or sustainable investment (SI), they extol the virtues of Arabesque, Grohmann & Weinrauter, ÖKOWORLD – lesser-known names in Germany and probably completely alien to a wider European audience.
Yet zooming out from the individual wealth manager, we find that German fund selectors remain largely wedded to the homegrown big brands, as well as some of the pan-European and global giants. Deutsche’s asset management arm is #1 best asset manager according to those who took part in Research in Finance’s European Fund Selector Study (EuroFSS).
DWS is near ubiquitous in the German market and well-liked for its breadth of offering, from research-driven funds to quant-led strategies. Yet does it really present the gold standard for ESG and SI? Big firms with high market share have excellent opportunity to communicate their credentials, and DWS must have been effective in this respect. They also have the budgets to launch and market new sustainable fund ranges. But in a dramatic turn of events, mere months after we reported our EuroFSS findings to clients, police raided the Deutsche Bank’s Frankfurt HQ in search of evidence of greenwashing. We suspect a different name will claim the ESG/ SI top spot in the next research wave!
As public prosecutors and regulators get tough on potential ESG-related mis-selling, definitions of green activities and investment strategies tighten up, and fund selectors gain the skills necessary to really scrutinise sustainability claims, there should be a less muddled picture of the top managers for ESG/ SI.
We do already see divergence in Germany in which brands are considered ESG market leaders and which are regarded as ‘best’ overall. Pictet, for example, ranks second for the former but doesn’t make the top 10 for the latter. The firm’s Global Environmental Opportunities and Water funds have been a hit with investors. Dutch SI forerunner Robeco impressively makes the top three for ESG/ SI but is unsurprisingly less top of mind for German fund selectors thinking of their favoured asset managers in more general terms.
German fund selectors name DWS as both their #1 ESG/ SI market leader and favoured asset manager overall. Other brands see big disparities between their ESG/ SI and overall rankings.
Source: Research in Finance’s European Fund Selector Study (Dec 21-Feb 22). Unprompted responses. ‘=’ indicates a joint ranking.
When we go back to German fund selectors after the summer for the second wave of EuroFSS, we expect a different picture to the one shown in the table above. Yet how it will be different is hard to predict. BlackRock has received criticism for overstating its SI credentials but also has the reach and resource to change its act and convert the naysayers. Can domestic firms overtake the French and Swiss names? Is there potential for a new entrant on the ESG/ SI leaderboard?
These are just a few of numerous questions that EuroFSS can answer for marketeers, sales teams and distribution heads across Europe.
Options exist to purchase this inaugural wave as well as the opportunity to become a full syndicate member for the next wave in Q3 2022. This provides access to a range of brand performance metrics, including use, consideration, positive associations and client service ratings.