Austrian asset manager Spängler IQAM Invest believes the application of a scientific approach is the secret to its success and growth in the country's institutional market for balanced funds and bond portfolios.
Asset class opportunities
Even as balanced funds and bond funds represent most of managed assets at Spängler IQAM Invest, the team of Steinberger has recently tapped other asset classes.
In early 2011, they initiated a new quantitative equity selection model, based on Corporate Finance indicators, to support its US and European equity funds. The model regularly picks return-generating factors based on value, efficiency and momentum as markets change.
Today, the research focus has shifted to commodity markets. To have greater control over the futures the firm invests in, researchers are building their own indices “to open up the asset class to us”, as Steinberger puts it. Hedge funds are a minor topic for the Austrian asset manager, even as the firm offers a fund of funds.
“The trend towards hedge funds has moderated. The core of pension funds and savers will be based in public markets,” Zechner reasons.
But another project will draw more from Spängler IQAM Invest’s resources. This year, the asset manager seeks to tap the German market for more asset growth. As in Austria, the focus will be on institutional investors searching for asset allocation and risk management expertise, as Zechner suggests.
To further develop its models, Spängler IQAM Invest banks on the “close interaction” of academia and practice. “Markets are relatively efficient”, says Zechner. “If they were fully efficient, none of us would waste money and time on doing research. It is necessary to develop your models further to defend the competitive advantage.”
CHART ONE: REAL RATES OF FINANCIAL REPRESSION
Chart two: Market Share of Spängler IQAM Invest