The central bank has many investment products to be too expensive and discourages investors from listening to the buy and sell recommendations by financial institutions. The idea that investors might be improved by skillful stock selection investment success, is an illusion.
The Bundesbank warns private investors from buying expensive products, which banks earn the most money. She recommends investors also depends to switch their securities or fund shares by frequently buying and selling unnecessary. there is for individual investors little reason to believe he could do better than others identify future winners or losers, the central bank warned in its latest monthly report.
buy and sell commissions are important sources of revenue for the financial industry. Analysts operate with their purchase and sell recommendations by the Federal Bank commissioned a bead illusion of investors who could improve it by skillful stock selection investment performance. The Bundesbank also warned against the mistake of many investors in the selection of investment products "the crucial role cost structures to neglect. " It highlights the sometimes high cost of investment funds and even the risks of certificates and recommends cost effective investment in publicly traded investment products that passively reflect a benchmark, known as Exchange Traded Funds (ETFs).
fees eat Income
According to a survey of the private Hamburger consulting company CapQM from the year 2009, the private investors given before the financial crisis a quarter to a third of its market return as fees and commissions to banks, investment companies, life insurers and asset managers. With investments worth 1.9 billion euros in 2007 households have the financial houses around 28 billion euros for the purchase, sale and management of their investments paid.
behind the acquisition costs for life insurance it would cost the administration of investment funds and their initial charge the highest costs. Simply by switching to lower-cost products such as passive index funds and longer holding the selected facilities once they waved according CapQM savings in investment costs of up to 10 billion € per year.
The passively managed exchange-traded index fund investors cost a fraction compared to the actively managed funds. The rule is: "The better known a stock market index, the an ETF replicates, the better the fund, "says Simon Nöth, fund analyst at Morningstar Rating House. A passively managed ETF on the German stock market index such as the cost of less than one tenth of the current charges against an actively managed equity funds for retail investors on average pay a management fee of 1.5 percent.
Even with the sales charges are passive funds is many times cheaper. For active equity fund investors pay subscription fees of up to five percent. ETFs are buying and selling rates, which are separated by a few hundredths to few tenths of a percentage point.
Active management does not pay
"The active management is similar to a zero-sum game, "the Bundesbank, in which the gain of one, the loss of the other. That means that the income of all investors, relative to the passive reference portfolio amounts to zero - and this against the costs generated by active management. After costs, the total return of all active portfolio is thus less than that of the benchmark portfolio.
Passive funds have indeed risen in recent years, but still dominated by public funds for private investors clear the active managed funds. The end of 2010 was the volume with 550 billion euros, around nine times as high as that of the ETFs.
Source: news.onvista.de
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