GERMANY - Absolute return funds in Germany have only returned 0.07% in the first six months of the year, research by asset manager Lupus Alpha has shown.
The study, which examined the welfare of the 308 funds between June 2007 and 2010, showed that while almost 100 vehicles closed during the financial crisis, inflows had recovered and reached €20.9bn at the end of the first half of the year.
Ralf Lochmüller, chief executive of Lupus Alpha, said: “For absolute return funds, the financial crisis was a real litmus test, and one that only parts of the strategies survived. There is a clear divide in the sector.”
While the first six months of 2010 saw low average returns, there was almost 41 percentage points’ difference between the best performer and the worst, which saw its assets decrease by 16.7%.
Lochmüller attributed this to differing strategies and said investors would carefully consider who they entrusted their money to in future.
In other news, the German federal labour court (BAG) has ruled that an employer is only allowed to refuse payment of occupational pension arrangements if an employee explicitly signs away any further interest in said payment.
The case revolved around a retiree taking a previous employer, with whom he had parted on good terms, to court after they said no payments were required on their part.
A regional court had previously ruled in the company’s favour, as it said an agreement was reached at the time settling all outstanding claims.
In its ruling, which overturned the decision reached in 2007, the BAG stated: “The great importance of pension claims requires an unmistakable statement: a waiver must be expressed clearly and without ambiguity.”
Finally, a survey conducted by real estate mediator Planethome found that just over two-thirds of respondents saw occupational pension schemes (bAV) as the best way of safeguarding their future retirement income, while using the state pension as a basis.
More than four-fifths (86%) of respondents thought it best to supplement their basic retirement income by investing in property, while 61% relied on a private pension or life insurance to shore up their savings.
Less than half relied on the Riester pension in addition to the basic state pension, while 21% believed the state pension was sufficient to fund their old age.