Plus through the crash: great moments of the crash prophets: Why Dirk Mller & Co’s funds are now going so well | message
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by Andreas Hohenadl, Euro on Sunday
For many years, cameramen and photographers who reported from the trading hall of the Frankfurt Stock Exchange liked to catch the face of Dirk Müller. Because the stock exchange trader at the time sat photogenic under the DAX board and provided the right facial expression for the price development. “Mr. DAX”, as Müller’s nickname soon became, knew how to use his popularity – as a talk show guest, book author and not least as a fund manager. His views, sometimes close to conspiracy theories, are controversial, and his work as a portfolio manager is often criticized.
However, the crash prophet is currently experiencing a great moment, and shares in his fund are in greater demand than ever. “We are currently getting between ten and 20 million new investor funds every day,” Müller recently announced in an interview on wallstreet-online. According to the factsheet, the fund volume at the end of February was still € 183 million, so it is currently around 408 million.
The keen interest in the portfolio is not unfounded. So Dirk Müller Premium Equities, as one of the few equity funds, has so far managed to make it through the stock market crash unscathed, even with a slight profit. The fund has been scarce since the beginning of the year
Percent increase, while the comparison group of global equity funds registered a minus of 18 to 19 percent on average.
In any case, Müller sees his approach as confirmed, as he also reveals in the interview mentioned above: “That such a fund, which is geared towards a crash, must be managed according to completely different rules than a classic one, buy and hold will be fine ‘- Funds are normal. Many observers could not or did not want to understand that in the months before the crisis. ”
In fact, there has been a huge difference in performance between the Müller portfolio, which has derivatives hedged by default, and an average global equity fund since the beginning of the year. But what about a longer period? Since its launch almost five years ago, Dirk Müller Premium shares have gained almost three percent (overall, not per year). The typical “buy and hold, will go well” portfolio in the form of an ETF on the world stock index MSCI World generated – despite the recent stock market crash – an increase of around 15 percent during this period.
Of course, investors had to endure major fluctuations in value. And of course nobody knows whether the downward slide at the markets has already ended this year. But as things stand today, it can be said that the Müller Fund has not brought any performance advantages over a broadly diversified, global equity investment over the period of its existence. However, in pronounced negative market phases such as the second half of 2018 or the current crisis, investor assets are well protected.
Early warning system worked
Hedging plays a central role in the investment concept not only at Dirk Müller, but also at Hans-Wilhelm Brand, founder of HWB Capital Management. This is noticeable in a good handful of portfolios that have been at the top of their respective categories since the beginning of the year.
The fund of funds HWB International Portfolio or the mixed fund HWB Victoria Strategies Portfolio V are positive, for example. Futures are always hedged when a company-owned early warning system signals sales. This system, which Brand has developed over the past 20 years, is based on a bundle of technical indicators.
On February 21, it sent clear sales signals, said the HWB boss. “On that day, we started to hedge a third of the equity positions,” said Brand. “On February 24, we hedged the remaining two thirds, so that the funds no longer had any equity risk from that time on.”
Only at the beginning of the last week in March, the hedges were gradually released and the portfolios reorganized. “Two thirds of the investment capital is currently in tally-proof bonds,” explains Brand. With a third, however, you are already back in stock risk. The HWB founder expects the economic consequences of the Corona crisis to be felt into the coming year, but the stock exchanges could start again this year.
In principle, the HWB funds are always good for a positive surprise. This is also evidenced by a number of awards from the Finanz Verlag, in which € uro appears on Sunday, from 2008 to 2016.
After that, however, almost all portfolios were closed by early 2018, as Brand was in a legal dispute with the Argentine government. The company no longer wanted to service bonds contained in the HWB funds. Finally, a partial repayment was agreed and the funds were reopened in early 2018. It is only since that time that valid performance figures have become available again.
Always on the go with protection
In contrast, the LuxTopic funds, which are managed by the investment boutique Robert Beer, have a complete performance history. For example, LuxTopic Aktien Europa has been on the market since 2003. And since then, the fund manager has always hedged part of the portfolio with an option strategy. That costs regular returns in times of recovery, but pays off in phases like the current one.
The European equity fund has lost practically no money since the beginning of the year, while the average of its peer group is currently around 27 percent in the red. By avoiding the recent plunge, the fund’s longer-term performance numbers look pretty good compared to the peer group.
Image sources: Dirk Müller, Finanz Verlag