A Financial Service Provider from the SME for the SME
Interview with Thorsten Schrieber, Board Member for Marketing/Sales at DJE Kapital AG
Since the 1970s, DJE Kapital AG has been navigating the market as a skilled medium-sized asset manager and continues to rely on the self-developed ‘FMM’ method for evaluating market opportunities and risks. In the turbulent times of the past three years, active asset managers are experiencing a renaissance, believes Marketing Board Member Thorsten Schrieber, who explained his company's investment concept in an interview with Wirtschaftsforum.
Wirtschaftsforum: Mr. Schrieber, the central investment philosophy of your company can perhaps be best summarized with the three letters 'FMM'. What do they stand for exactly?
Thorsten Schrieber: The 'F' in our FMM method initially stands for 'fundamental', as the analysis of long-term fundamental data of the securities we invest in as asset management has always been one of the most significant foundations of our investment decisions. The two 'M's meanwhile stand for 'monetary' and 'market-technical' and form the two other cornerstones of our investment strategy, which our company founder Dr. Jens Ehrhardt already developed in the 1970s during his doctoral research. Dr. Ehrhardt was then one of the first financial market researchers who precisely analyzed the importance of monetary influences such as money supply growth controlled by the central banks on the development of prices in the securities markets and could use these insights for directional decisions in investment strategy.
In the context of technical market analysis, we also examine the current behavior in the derivatives markets as well as other important metrics like the cash holding ratios of fund managers, from which insights into the current market sentiment can be derived – in today's terminology, one might even use the term ‘Behavioral Finance’ for this.
Wirtschaftsforum: Recently, younger investors have started to rely heavily on three other letters for their long-term investment strategy: ETF. What can you, as active managers, counter this trend with?
Thorsten Schrieber: As active managers, we are naturally the exact opposite of an ETF, which, by definition, foregoes any market or security analysis. However, these two viewpoints are by no means mutually exclusive. If we, as active asset managers, want to quickly enter a smaller market and do so without conducting a detailed individual stock analysis initially, we could also implement this well with an ETF in a first step. Particularly in market phases where the stock market continuously rises, one can naturally participate well in this trend with an ETF. However, in the last three years, when one crisis followed another, a pure ETF Buy-and-Hold strategy would certainly not have been optimal given the significant price distortions. Here, competent fund managers were once again able to show that solid asset management also distinguishes itself by taking capital out of the stock markets during risk phases and only re-entering on a larger scale when there is appropriate momentum again. Such control naturally contradicts the basic principle of an ETF.
Wirtschaftsforum: Let's talk hard numbers: How does the investment strategy of DJE Kapital AG compare to the benchmarks?
Thorsten Schrieber: The results of DJE Kapital need not shy away from comparison with a broadly diversified ETF. For example, the FMM Fund, managed by Dr. Jens Ehrhardt to this day, has generated an average return of 8% p.a. over the last 35 years, while the MSCI World as a benchmark only managed growth of 5% p.a. These 3% difference in returns have a tremendous impact over three and a half decades. While the MSCI World grew by 435% of its initial value during this period, our FMM Fund increased by a total of 1,300%.
Wirtschaftsforum: At the market, DJE Kapital AG acts as an independent financial service provider and a proud medium-sized enterprise. What role does this positioning play in your daily business operations?
Thorsten Schrieber: While the large banking houses often not only pursue singular interests but also sit in large emissions syndicates, DJE Kapital AG has focused on asset management, fund business for retail and wholesale investors, and institutional business since its founding. This allows us to move completely freely in the market and to be entirely independent in our decision-making from all other actors. Speaking the language of the 'Mittelstand' ourselves greatly benefits our business activities. Particularly, medium-sized institutional investors who operate worldwide and therefore require complex global investment solutions, greatly appreciate it when we, as their counterpart, not only know this entrepreneurial culture well but also live it in everyday life. An exchange at eye level is always of essential importance to us.