Germany’s growing dependence on exports to emerging markets and growing domestic consumption are providing fertile ground for Swiss & Global Asset Management’s Germany equity fund manager – but not necessarily where you might expect.
Maslowski says cars are naturally high on the shopping lists of local households in China as its middle class gains in affluence and spending power. "The density of cars in China is at the same level now as it was in Germany in the 1950s, so there is a lot of catch-up demand."
Some sectors have gained a natural overweight in Maslowski's portfolio, but this through the manager's stock-picking approach, and he does not see himself as a ‘sector player'.
He is convinced that "it doesn't help to think in sectors, since the top companies in each sector are not necessarily the best bets."
He notes the German market holds some threats for an equity manager, notably in industries that are heavily affected by regulatory changes. As a result, Maslowski is underweight in healthcare, currently prone to ‘regulatory risk'.
Apart from this, his fund is relatively sector-neutral. At present, he says, big sector bets do not pay off.
He does, however, play on some themes. One is German domestic consumption, and one way he likes gaining exposure to this is via mobile internet firms.
"Everyone in Germany is spending like crazy on iPhones, iPads and Blackberries as they move away from desktops to mobile internet," he says. One of his biggest positions is Freenet, a leading German mobile internet provider.
It's an example of a company that offers value and does not have high overheads, so the investment will pay off in the long run, he says.
Overall, Maslowski is bullish about the German equities, and expects them to outperform the rest of Europe in the next five to six years. One trigger for this is the ‘divergence' trend, which he says has developed since the global credit crisis.
"Before 2009, we had seven years of convergence, where it didn't matter if you invested in the EuroStoxx 600 or in [Germany's] DAX Index, but things are changing now, and this divergence trend can easily carry on for a decade."