Robo-advisors increasingly used in asset management in Germany, Europe

0 Comment(s)Print E-mail Xinhua, February 13, 2019
Adjust font size:

BERLIN, Feb. 12 (Xinhua) -- Automated investment algorithms are increasingly used for asset management in Germany and Europe, according to an analysis by Deutsche Bank published on Tuesday.

Assets under management by such so-called robo-advisors have increased more than tenfold from 300 million euros in 2016 (339 million U.S. dollars) to 3.8 billion in 2018, according to analysis by Deutsche Bank. Germany would currently capture 27 percent of the European market for automated investment services and ranks in second place after Great Britain.

With around 14 billion euros in managed assets and around 900,000 clients at the end of 2018, the market size and client base of robo-advisory services in Europe have approximately doubled in one year alone, according to the analysis by Deutsche Bank.

The analysis also shows that market leaders in Germany such as Scalable Capital, cominvest or Quirion would be "much more expensive" than their counterparts from the United States, said Deutsche Bank analyst and author of the analysis Orcun Kaya. With an annual fee of around 1 percent, the German robo-advisors are more than three times as expensive as the U.S. services that only charge an annual fee of around 0.3 percent.

Robo-advisors are automated systems that are able to perform several asset management services such as client onboarding and portfolio management. The analysis considers robo-advisory as "a true innovation in asset management with significant growth potential".

Clients would save "time and effort in taking care of their portfolio" as well as "reduce mistakes related to financial illiteracy or behavioral biases", said Orcun Kaya, analyst at Deutsche Bank.

German robo-advisors achieved an average return of around 3.9 percent compared to a return of only 2.9 percent that actively managed funds generated in 2017, the analysis shows. In 2018, robo-advisors ended up with an average loss of 5.5 percent but still beat actively managed funds that generated losses of 8.5 percent.

However, automated investment algorithms would not have a "proven track record over a longer period of time" making it uncertain, how they might react during "times of crisis when volatility is high", added Kaya. The first robo-advisors were introduced in Germany in 2013. Enditem

Follow on Twitter and Facebook to join the conversation.
ChinaNews App Download
Print E-mail Bookmark and Share

Go to Forum >>0 Comment(s)

No comments.

Add your comments...

  • User Name Required
  • Your Comment
  • Enter the words you see:   
    Racist, abusive and off-topic comments may be removed by the moderator.
Send your storiesGet more from