DWS Concept Kaldemorgen EUR NC |
by Thomas De Fauw
Founding lead manager Klaus Kaldemorgen’s succession is progressing, as DWS announced in September 2022 that previous comanager Christoph Schmidt will take the reins beside Kaldemorgen as co-lead. This sets Schmidt up as the likely leader as Kaldemorgen (born 1953) continues his gradual move to the sidelines. With the supporting team seeing additions and an established process in place, we maintain our Above Average People and Process ratings. Kaldemorgen will stay with DWS beyond 2023 but is reducing his commitments over an unspecified time frame. After a luminous career as an equity manager, Kaldemorgen established this fund in 2011 and around it built the Total Return team, which now counts 10 portfolio managers, analysts, and risk managers. Equity specialist Schmidt has been there from the start, and since January 2013 has managed the ESG Dynamic Opportunities strategy successfully. In 2021 he also became head of the Total Return team. Two other portfolio managers—Henning Potstada and Thomas Graby—support Kaldemorgen and Schmidt here. With assets growing, the team has added three asset-class specialists since 2022 and has seen one internal departure. The flexible investment approach has proved its worth. The strategy is driven by top-down views that are used for weightings between equities, bonds, cash (including foreign currency), gold, and more recently a liquid alternative strategy. The macro views also inform equity and bond selection. While the risk target of keeping volatility below 10% has been achieved since inception, the team allowed the fund to breach its maximum drawdown limit of 10% over a calendar year in the turbulence of March 2020. This is a slight knock on the process, but the recovery was swift and allowed the team to avoid a fire sale. The fund has grown to more than EUR 14 billion as of the end of August 2023. Helping with liquidity is the fact that the manager mostly trades in large-cap equities and does not typically invest in illiquid alternative assets. Despite its large size, however, the fund charges above-average fees—including a performance fee for most share classes—and we believe there is room to share economies of scale with shareholders. |
Morningstar Pillars | |
People | Above Average |
Parent | Average |
Process | Above Average |
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