Germany’s real economy is ‘resistant to euro debt problems’, Tim Albrecht, manager of the DWS Deutschland fund said following data that sees economic sentiment for Germany at its highest in nearly two years.
‘Everyone was watching CDS spreads on bonds last year and worried about German equities due to its position in Europe. Now you can see that the Euro crisis and financial crisis caused only a dent in the German real economy,’ Albrecht, who oversees over 3 billion euros told Citywire Global.
German economic sentiment is at its highest since June 2010, according to a widely-followed index published by the independent institute ZEW based in Mannheim on Tuesday.
However despite this, the german fund manager said the 'main player' for growth of German equity is still coming from the emerging markets.
Albrecht also highlighted the ongoing disparity between north and south European economies, even after the ECB's bank lending facility which began its first round last December.
‘From speaking to businesses, it is clear that there is still a difference in demand for industrials between south and north Europe. Since Lehmann the recovery has of course been more stagnant in countries in Europe’s periphery but then the turnover is also much smaller in those markets.’
Concern about some European economies was echoed by the ZEW report which cited low business activity in ‘important’ European countries and further disruptions in the banking sector as continuing downside risks.
Albrecht, who also runs the DWS ZukunftsInvestitionen fund with a focus on industrials and infrastructure, said he is investing in service-orientated companies particularly in mining equipment, aerospace and oil sectors.
The DWS Deutschland fund returned 108.63% in the past three years. The average return in the equity Germany sector was 81.2% for the same period.