Setting Up a Solid Budget

Last Updated: 1. Dezember 2023By

Did you also rub your eyes in disbelief last week? The slap of the Federal Constitutional Court on the coalition government still echoes today. The example shows that it makes sense to take care of your own finances – money that is promised is not necessarily there.

With DWS funds, securing old age can be achieved, but now to the company. DWS Group was founded in 1956 as Deutsche Gesellschaft für Wertpapiersparen. Until its initial public offering in 2018, the company was fully owned by Deutsche Bank. This is still the largest shareholder today. DWS offers private investors and institutional customers access to various investment products and funds and is today one of the largest asset managers in Germany.

Cost pressure and IT conversion DWS has agreed to pay 25 million $ to the US Securities and Exchange Commission to settle the allegations regarding false statements regarding green capital investments and inadequate money laundering controls. Investigations into so-called greenwashing are still underway in Germany. In the first 9 months, sales fell by 4.4% to 2 billion € due to weak stock market development. However, DWS was able to record inflows of 17.3 billion €.

The managed assets increased to 860 billion €. The passive index funds of xtrackers are proving to be the favorites of investors. DWS earns less from these products than from active investment solutions, but expensive analyst teams and fund managers are not needed. DWS wants to reduce costs. This year the cost ratio is to be pushed below 65% of sales.

By 2025 it should even fall below 59%. Currently the ratio is 63.4%. But first there are high special costs for the IT. A planned switchover will take more time and be more expensive than expected. €100 million is planned for this and next year. In addition, the expected savings will only occur later.

This dividend shocks DWS wants to become independent of Deutsche Bank, but underestimated the effort to build its own IT capacities. Growth can come from Asia. DWS entered into a strategic alliance with a subsidiary of the Bank of China in Hong Kong to market its products in China and Hong Kong. The stock may only be moderately promising, but it stands for a dividend yield of a whopping 7.9%. Enough reason to include the DWS stock as an investment in your own household budget.