DWS Concept Kaldemorgen: Status quo and outlook

It has been ten years since the DWS Concept Kaldemorgen was launched as a risk-controlled multi asset total return fund. It was designed primarily for investors who want to participate in rising markets but at the same time do not want to be subject to too many fluctuations. Did the fund meet investors' expectations? Klaus Kaldemorgen, who launched the fund, is convinced: "Investors have achieved an average annual return of 4.7^[1] percent since its launch on 2 May 2011, and that with a volatility of 6.0 percent. That is quite respectable for a risk-controlled investment."

One strategy became a product family for different risk appetite

The fact that the strategy has convinced many private and institutional investors is reflected in the development of the fund’s assets under management, which have increased from ten million euros in 2011 to more than eleven billion euros. Since then, DWS has systematically expanded the product range of multi asset funds with a total return approach: Offering solutions for different risk profiles - from the safety-oriented DWS Invest Conservative Opportunities to the balanced DWS (Invest) Multi Opportunities, to the significantly more offensive DWS ESG Dynamic Opportunities. Responsibility for the funds is spread over several shoulders: With Henning Potstada, Christoph Schmidt and Thomas Graby, the three co-portfolio managers of the DWS Concept Kaldemorgen have each assumed responsibility for one fund. In total, the team now manages assets of a good 20 billion euros.

Systematic and farsighted – crises on the financial markets well mastered

Even though the investment approach of the DWS Concept Kaldemorgen is strongly characterized by key figures for risk control, in some situations it also needs decades of capital market experience to master turbulences with foresight. At the beginning of the Covid-19 crisis, for example, the portfolio management team decided to tolerate exceeding the fund's target maximum loss risk of ten percent in the short term. "We chose at that time not to sell any more shares into the selling panic and thereby realize losses. Our conviction that the aid from central banks and states would quickly lead to a recovery of the markets then proved to be correct," says Kaldemorgen. Thus the fund has achieved a performance of 5.18 per cent this year (as of 30 April).

There will always be crises and major setbacks on the financial markets. The decisive factor is therefore how an investment performs in these phases, how much stress it puts investors through. "Here, the investment strategy has proven itself, providing the portfolio management broad flexibility, among other things because it is not linked to any benchmark index," says the portfolio manager.

Continued low interest rates and stronger fluctuations in equities

Are investors well positioned for the future with the DWS Concept Kaldemorgen? Kaldemorgen expects a thoroughly challenging situation for investors in the coming years: "Interest rates are likely to remain low, the return potential of equities is significantly higher, but fluctuations on the equity markets should increase significantly." In such an environment, a sensible diversification across different asset classes and a sophisticated risk control play a very important role.

Topics such as digitalization and sustainability are becoming increasingly important

What trends will shape the next few years? Digital business models will continue to be very important even after the Covid-19 crisis has been overcome, Kaldemorgen is convinced. He is therefore optimistic about selected technology stocks in the coming years. He places the topic of ESG, environmental, social and good corporate governance factors, one level higher, which will have a lasting impact on the investment industry. "The political requirements of a climate-friendly economic policy, for example, entail high risks for many sectors and companies in the transition, which are better avoided by not investing there or investing less. For certain sectors, this could lead to a long period of infirmity. For those sectors and companies that make a positive contribution to sustainability issues, on the other hand, there are great economic opportunities," says the portfolio manager.

The multi asset funds of the total return family aim for an above-average sustainability standard. In March 2021, the MSCI ESG rating for the fund was upgraded to "A".

10 Years DWS Concept Kaldemorgen at a glance

May 2, 2011	Klaus Kaldemorgen and team launch the multi-asset total return fund "DWS Concept Kaldemorgen". The goal: Investors should participate appropriately in rising markets and enjoy a certain degree of protection in falling markets. The possible loss is to be limited to a value in the single-digit percentage range in the calendar year.
September 2011	At the Sauren Golden Awards, Klaus Kaldemorgen is honoured as "Fund Personality 2011". "With his conduct and his curriculum vitae, this fund manager represents a real role model for the entire industry. Because with his decision to relinquish his position as managing director, he has signalled that his top priority is not self-interest but the protection of client interests," said laudator Hans Heuser, publisher of FONDS professionell.
January 2013	“DWS Dynamic Opportunities" is the first offshoot of the "DWS Concept Kaldemorgen". The fund is managed by Christoph Schmidt according to the Kaldemorgen strategy, but invests more offensively. Since January 2021, the fund has been managed according to ESG criteria.
June 2014	The "DWS Invest Multi Opportunities" managed by Henning Potstada starts. This fund also works according to the Kaldemorgen strategy and its original version dates back to 2002. The risk-return profile is balanced, which makes it less defensive than the "DWS Concept Kaldemorgen".
July 2014	Assets under management of the "DWS Concept Kaldemorgen" exceed the one billion euro mark. "The new old billionaire", says the German monthly “Manager Magazin” in reference to Klaus Kaldemorgen.
February 2015	Klaus Kaldemorgen is awarded by Finanzen Verlag with the “Golden Bull Award” as "Portfolio Manager of the Year 2015". "Perhaps the calmness that Kaldemorgen exudes in conversation is more than just a trait. Perhaps it is the secret of success that has enabled the veteran of the German fund industry to withstand the pressure as a portfolio manager for more than 30 years," wrote the editors in their article on the award.
December 2016	Assets under management of the "DWS Concept Kaldemorgen" exceed the five billion euro mark.
August 2019	“DWS Invest Conservative Opportunities" is the fourth and most conservative fund in the multi asset total return family, which is managed according to the Kaldemorgen strategy. The portfolio manager is Thomas Graby, one of the two risk managers in the team.
November 2019	Assets under management of the "DWS Concept Kaldemorgen" exceed the ten billion euro mark.
March 2021	MSCI upgrades the ESG rating of the "DWS Concept Kaldemorgen" to "A".
May 2, 2021	The "DWS Concept Kaldemorgen" celebrates its tenth anniversary. The portfolio management team around Klaus Kaldemorgen is responsible for more than 20 billion euros for private and institutional investors.

Contact:

Sabina Diaz Duque                                         Reimar Salzmann
Tel. +49 (0)69 / 910 14177                              Tel. +49 (0)69 / 910 14191
Email: sabina.diaz-duque@dws.com              Email: reimar.salzmann@dws.com

About DWS Group

DWS Group (DWS) is one of the world's leading asset managers with EUR 820bn of assets under management (as of 31 March 2021). Building on more than 60 years of experience, it has a reputation for excellence in Germany, Europe, the Americas and Asia. DWS is recognized by clients globally as a trusted source for integrated investment solutions, stability and innovation across a full spectrum of investment disciplines.

We offer individuals and institutions access to our strong investment capabilities across all major asset classes and solutions aligned to growth trends. Our diverse expertise in Active, Passive and Alternatives asset management – as well as our deep environmental, social and governance focus – complement each other when creating targeted solutions for our clients. Our expertise and on-the-ground-knowledge of our economists, research analysts and investment professionals are brought together in one consistent global CIO View, which guides our investment approach strategically.

DWS wants to innovate and shape the future of investing: with approximately 3,500 employees in offices all over the world, we are local while being one global team. We are investors – entrusted to build the best foundation for our clients’ future.