With the support of the insurance group, the digital asset manager Moneyfarm is launching on the German market.
Et is still a niche market, but it attracts the big financial groups: the market for digitally automated capital investments. The English term “Robo Advisory” has established itself for this, which stands for advice from robots.
The Munich insurance group Allianz also relies on such an investment robot. Customers can now purchase the products of the capital investment company Allianz Global Investors (AGI) via the digital asset manager Moneyfarm. The company, which was founded in Italy seven years ago, has taken over the German competitor Vamoo this year and, according to its founder and CEO Giovanni Daprà, wants to become one of the three leading providers in Germany. “The cooperation with AGI gives us a high reach and greater access to the German market,” the Italian said in an interview with the FAZ
Number one is Scalable Capital
The 20 investment robots operating in Germany manage assets totaling around 4 billion euros. Number one is Scalable Capital, which is approaching the € 2 billion mark. The Munich-based company has won many customers through its cooperation with the ING direct bank. The world’s largest asset manager, Blackrock, has a stake in Scalable.
Allianz is keeping a low profile on the amount of its stake in Moneyfarm. According to a report by the Internet portal “Finanz-Szene”, it should be 38 percent. In addition to the alliance, Poste Italiane is also an important shareholder. Daprà compares the collaboration with the post company controlled by the Italian state to the partnership between ING and Scalable in Germany. He speaks of the “next milestone in our European growth strategy”. Moneyfarm strives to partner with companies that have built trustworthy brands and long-term customer relationships. “A good example of this is our cooperation with Allianz in Germany.”
Access to the next generation of intelligent digital investment processes
So far, Moneyfarm has mainly been active in Italy and Great Britain. Assets of 830 million euros are managed for more than 40,000 customers. By investing in Moneyfarm, Allianz wants to “secure access to the next generation of intelligent digital investment processes”, as Allianz manager Jürgen Weber puts it.
According to him, not all clients always want to talk to an investment advisor when investing money. “If you want that, that’s possible at Moneyfarm.” Weber thinks the “hybrid approach” makes sense. So far, AGI and the unit responsible for bonds, Pimco, have sold their products through intermediaries, i.e. banks and investment advisors.
What makes Moneyfarm so interesting for Allianz is the inclusion of actively managed funds. Similar to other investment robots, passive asset management via listed index funds (Exchange Traded Funds; ETF) is a central component. But CEO Daprà takes a pragmatic and not a dogmatic approach. The complementary strengths of active and passive instruments would be combined for the benefit of investors. “ETF products are more prone to fluctuations, which is why we also think actively managed funds make sense,” he explains the approach.
Active funds would be used for inefficient asset classes such as emerging market stocks or high yield bonds. AGI should select these products. Daprà points out that the AGI offer also includes products from external providers. Inexpensive ETF products would be used for efficient asset classes such as European blue chip stocks. “Currently 42 percent of our assets under management are ETFs, with 54 percent in the equities segment being twice as high as in the bond segment,” he adds. AGI products accounted for 36 percent of assets under management.
Moneyfarm customers can have their risk tolerance and portfolio composition assessed using algorithms. In addition, you are always free to contact an advisor. The minimum investment volume is 5000 euros. Moneyfarm charges a fee of 0.75 percent for sums up to 15,000 euros. Between 15,000 and 100,000 euros there is still 0.65 percent. Added to this are the fees for the funds and ETF products. The basic price for active AGI funds should correspond to that of a comparable passive product.