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Only decisions will lead to results

1 May 2010, Diplomatic World

The Wealtheon Group is internationally known for their above-average track record in investments. The Group’s management consists of two generations, viz. Peter Zwart (68) and Victor Zwart (40). The corporate philosophy is based on entrepreneurial investment decisions combined with cost transparency and clear communication towards clients. Since its origin in 1971, this philosophy has proven to be very successful.

“The fact that Wealtheon is a privately-held group is reassuring for our clients. We do not know any internal pressure to deliver better corporate results quarter on quarter.” states Peter Zwart, Chairman of the Board of Directors. ”On top of that, we do not offer in-house products such as mutual funds, hedge funds, private equity or structured products. Investments are made directly in equities, bonds, commodities and derivatives. Transparency is therefore fully guaranteed.” Wealtheon is not a bank but is supervised by the CBFA (Belgium) and the AFM (Netherlands). For many years, Peter Zwart was previously Board member of the NYSE Amsterdam Stock Exchange as well as Chairman of VEB, the Dutch organization for shareholders.

”We focus entirely on discretionary asset management. Our sole objective is to achieve above-average investment returns while managing the market risks involved.” says Victor Zwart, the Group’s CEO. ”There can be only one selection of equities and only one selection of bonds that are most likely to outperform the market. Hence there is no need to offer several of ‘the best’ selections. Of course, it is necessary to adapt the compilation of portfolios well ahead of changes in the market”.

The fact that Wealtheon is able to act diligently clearly shows in the Group’s results. When the MSCI world equity index (in €) went down with -28 % between 2007 and 2009, Wealtheon’s equity selection increased by 19 %. Peter Zwart adds: “Next to our core business, we have an extensive, worldwide network of tax and legal advisors at our clients’ disposal. In the end, you cannot pose as specialist in every single field of expertise.”

“We clearly distinguish ourselves by our disciplined investment process.” explains Victor Zwart, “For example: investors have no problem buying a stock but they often find it difficult to sell this stock when its price declines. By setting clear targets, we bind ourselves to taking decisions in order to preserve capital gains. This being said, our active approach regarding asset allocation is more eminent still. In March of 2007, we reduced our economic judgment for the USA from ‘moderately positive’ to ‘neutral’. Following this step, we sold 15 % of our equity portfolio. Later, in August 2007, we lowered our euro zone judgment to ‘neutral’ and again we sold 15% of the equities. When the stock markets worldwide tumbled with 40 % in 2008, we were able to limit losses to 13 %.” The basis of Wealtheon’s investment strategy is to assess the major economies in an anti-cyclical way. “As an asset manager, you need to have a clear vision on future market developments.” Peter Zwart elaborates, “By establishing which direction an economy is heading, you can increase or decrease the risks you are prepared to take on behalf of your clients.”

Wealtheon provides services to a wide variety of clients. ”As a result of the personal attention we give our clients, we are still managing assets which were entrusted to us back in 1971. Nowadays, in many cases, we do business with the second generation.” says Peter Zwart. “An interesting element is the diversity amongst our clients: families, entrepreneurs, entertainers/artists, sport stars but also charitable foundations, trusts and family offices. Offering tailor-made service is therefore mandatory.” In general, portfolios represent values of € 1 million or more. Wealtheon’s remuneration amounts to maximum 1 per cent per annum. Besides this, sometimes a performance fee is required. It is important to know that Wealtheon does not receive any commission whatsoever on transaction fees. As Wealtheon is not a bank (each client has an account in their own name at a first-class bank), clients know exactly which costs are involved.

“At least twice a year, each of Wealtheon’s clients discuss their portfolios personally with the Group’s management i.e. the real decision-makers. This ensures that clients keep the same contact person.” Victor Zwart continues, “At present, we have a team of approximately 20 persons to support us. Almost all of them specialize in research and portfolio management.” And what about Wealtheon’s investment results? Peter Zwart: ”Over the past 40 years, the MSCI world equity index increased by a factor of 10. At the same time, our equity portfolios increased by the factor 30. This encourages us to continue to implement our investment philosophy. After all, one should never change a winning team!"

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