Claus Hecher heads ETF sales in German-speaking countries and the Scandinavian countries and has been working for BNP Paribas Asset Management since July 2016.
Hello Mr. Hecher, thank you for taking the time to ask a few questions. First, I would be interested to know, what is the difference between how ETFs are perceived by investors today and how they were perceived five or ten years ago?
Good question, back then ETFs were more of a niche product for institutional investors, whereas today they are widely accepted by both professionals and private investors through savings plans or one-off investments. The focus has shifted from a pure cost consideration for ETFs that track a classic index to topics such as sustainability, smart beta and active approaches. ETFs are used both as tactical instruments and strategic asset building blocks in investing.
This is a big change in ETFs, and active ETFs in particular are becoming more and more important. How do you assess their role in a traditionally passive segment?
Active ETFs represent a natural development. They combine the transparency and tradability of classic ETFs with active research. This means they offer more granularity and flexibility, be it in ESG alignment or in factor-oriented strategies. It would also be important to clarify that active ETFs are more complex, so investors also need to understand the differences to passive products.
You just talked about active ETFs, what does your offering look like there?
Our new Alpha Enhanced ETF range is based on a multi-factor approach developed by our quantitative research and investment teams. This concept is already being used successfully in funds with a volume of around EUR 6.5 billion and has shown consistent performance across various market phases over the past ten years. They have also been tradable on XETRA and other German marketplaces since September 16th.
We are currently living in turbulent times. How important are geopolitical issues, such as defense, for ETF demand in Germany and Europe?
Geopolitical tensions have triggered a change of perspective for many investors. Issues such as security and defense are coming into greater focus, especially from a European perspective. Geopolitics is thus driving demand for thematic strategies that have previously received little attention, such as defense stocks. This spring we launched an ETF that tracks the performance of European defense companies. This also includes companies that develop relevant technologies for defense and security, as well as transport equipment and semiconductors.
What role do cooperations with platforms, brokers or banks play in the distribution of your ETFs?
Collaborations are of central importance for reach, especially in the retail segment through savings plans. They enable low-threshold access to products and at the same time promote market acceptance. Private investors value trading ETFs via their online broker’s apps on their mobile phones throughout the entire period of daily stock market trading. However, this doesn’t work with investment funds.
You have already spoken about the use of ETF savings plans; these are usually designed for the long term. Can you also park money sensibly with ETFs?
Before the summer break, we launched an overnight ETF whose benchmark is the Euro Short-Term Rate. The ETF is an attractive alternative to classic “money parking” such as with daily money accounts. Due to the chosen replication method, under the current market conditions, a higher interest rate is possible than that of the Euro Short-Term Rate, which is currently around 2% pa. You see, ETFs can be used in many ways, not just for investing in the stock markets.
Claus Hecher
Regional ETF Head of Sales DACH & Nordics, BNP Paribas Asset Management
Claus Hecher heads ETF sales in German-speaking countries and the Scandinavian countries and has been working for BNP Paribas Asset Management since July 2016. He began his career at Deutsche Bank AG in 1987 and worked for 16 years as a specialist in equity derivatives in Frankfurt am Main, Zurich and London. From 2003 to 2006, he managed the sales of structured equity products at the US investment bank Bear Sterns and then at Natixis Corporate and Investment Bank to German and Austrian customers. In 2008 he moved to BlackRock to be responsible for the distribution of iShares ETFs in Germany and Austria until 2012. Building on this experience, he advised the sales team at Natixis Global Asset Management on the distribution of ETFs in Germany and Austria from 2012 onwards. Claus Hecher has a diploma in business administration from the Ludwig Maximilian University of Munich.