Deutsche Bank Wealth Management, which is likely to expand its list of recommended equity funds this year, had €46 billion ($49 billion) under management in Asia Pacific out of a global total of €300 billiion.
AsianInvestor spoke to Joyce Ngan, the firm's recently appointed Asia-Pacific head of fund solutions, about how she and her team approach product selection.
Q AsianInvestor: What do you have on your funds platform?
A Joyce Ngan: Excluding our US fund vehicles, which are specific to that market, we have about 300 funds on the approved list managed by approximately 40 managers. The pool is large, but what’s crucial is [which funds] we want to focus on to execute our investment views. My team has an influence on which funds go to the recommended list in Asia.
Q Have there been any major changes to the funds platform in recent months?
A From an infrastructure and process standpoint it remains the same. We still have our own internal due diligence team and have added a few new members as we expanded the number of funds on our platform.
Q How long do you keep a fund before getting out of it?
A Generally [we hold funds for] three years, but no longer. Our clients typically look at performance year to year. One year of underperformance is a lot to account for [in terms of opportunity cost], from an average Asian investor’s perspective – unlike European investors who are willing to give more time [to a fund to improve its returns].
Q Does your team select the funds?
A My team is focused more on fund advisory. We help our bankers and clients choose funds [that are in line with the chief investment officer's view]. And we recommend based on quantitative and qualitative criteria. We have teams in London, Frankfurt and New York that focus on fund due diligence. We recently relocated a fund selector to Singapore to be closer to the market.
All things being equal, we apply ‘soft’ factors such as after-sales support, branding that applies to certain markets, and willingness to support Chinese materials. It is different for hedge funds. Performance and accessibility are the key criteria there.
Q How do you differentiate your fund platform from others?
A It’s true that mutual funds are a commoditised product, so there are overlaps across banks. We focus on investment advice and advising what is the best fund to use in particular circumstances to set us apart for our peers.
Q Have you reduced the number of products on your platform in recent years?
A Apart from regular maintenance and rationalisation, we have not intentionally reduced the number of products. The exercise is to ensure we provide best–in-class options for our clients.
Q Did anything change after Deutsche Bank split its asset and wealth management units?
A Other than changes to our business cards, split between asset management and wealth management as a brand has had no impact on our day-to-day operations. It does not change how I interact with business partners and clients. I have been here 13 years and have seen much larger changes within the firm.
Q Is being part of a group with an asset management business an advantage or disadvantage?
A I don’t see it as an advantage or a disadvantage. Having an asset manager close by makes it easier to call colleagues if I have a question about a fund, but it does not make a difference in an absolute sense.
Does that raised conflict of interest issues? No. Our clients have gotten used to it. We could easily say we like a manager internally as much as we like a manager externally.