Better than the benchmark

“Better than the benchmark” – 42% increase in value over the last 5 years!

April 21, 2020 | Digital Asset Management

Just 6 out of 51 asset managers succeeded in convincing with above-average performance in the Benchmark Test III of the Fuchsbriefe publishing house. The portfolio managers of our parent company Früh & Partner can count themselves among the big winners. Estably uses the same analyses and investment ideas and now also offers them for smaller portfolios.

All about the Fuchsbriefe Benchmark Test

During the test, the active asset managers competed against a passive benchmark portfolio consisting of 2 ETFs with an equity exposure of 40%. Fictitiously, EUR 5 million were invested in a portfolio with the additional requirement of distributing 2% income annually from dividend payments and interest. Under these targets, the portfolio managers of Früh & Partner have succeeded in increasing the original EUR 5 million to EUR 7.11 million over the period 2014-2019, which corresponds to a value increase of 42.23% and an average annual return of 7.28%. This performance was achieved with a maximum equity exposure of 50%. Over the same period and under the same conditions, the benchmark portfolio “only” achieved a value increase of 24.51% – corresponding to an annual return of 4.47%.

Who really masters asset management?

In addition to return on investment, the testers also focused on other criteria, which all contribute to a positive investment experience:
  • Sortina Ratio: measures the fluctuations of the portfolio on a daily basis and reflects the “stress” of the investor.
  • Omega: looks at the interaction between return and risk.
  • Focus on client needs: how exactly were the test specifications met?
Früh & Partner was one of only two firms to achieve “Better than the benchmark” both in terms of points (return, risk, performance) and performance. As an asset manager, it is important to focus on the fundamental data of companies and not to act or speculate emotionally. Most private investors and also many other asset managers fail in this regard. Those who rely on the quality of a company are rewarded in the long run. However, this requires a lot of knowledge and discipline.

Outperformance using the Value Investing strategy

For many years we have been relying on the proven value investing strategy. The focus here is on the careful selection of companies – both in the equity and bond sectors. Potential companies are usually analysed down to the smallest detail over a period of months. If we come to the conclusion that the company is being traded more favourably on the stock exchange than it is actually worth, we strike. This is the same strategy used by Warren Buffett and many of the world’s most successful investors to outperform. You can learn all about our value investing strategy here.

Conclusion

The result of the benchmark test confirms once again how important the choice of investment philosophy is for investment success. Paired with a good asset manager, you can then beat the benchmark by a wide margin.

Estably is the first digital asset management company from Liechtenstein to offer first-class wealth management from € 20,000 through a mix of technology and human investment expertise. Thanks to the portfolio managers' many years of experience in the field of value investing, above-average returns are targeted. This is intended to make professional asset management, previously available exclusively to large investors, accessible to everyone - conveniently, transparently, and profitably.

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