Good Things From Home And Abroad

Guaranteed from Austria! 100% domestic quality! That's how the supermarkets court us. An egg from Italy or a liter of milk from France are apparently a bit too much to swallow. Of course, the Italians and the French certainly see things differently. After all, they play the same game, just with different flags.

With the European elections right around the corner, one could easily blow up the issue of lacking trust in the quality of our European neighbors for political gain. But if there’s one topic the Gutmann Viewpoint stays far away from, it’s politics. 

Love of the homeland

In finance, this tendency is called the “home bias”. It refers to investors preferring financial products from their home country. 

When it comes to the stock market, the home bias in Austria is now pretty much extinct. Someone living in Linz may still have a special emotional connection to voestalpine AG. Nevertheless, we intuitively understand why more than 99.9% of the global stock market capitalization is outside Austria. 

For government bonds, the Republic of Austria is probably still the first choice. After all, we get a higher yield than from our dear German neighbors, and we also feel confident that the borrowed money will be paid back. This fairly secure constant in the portfolio is reassuring.

The wealth of the world

We at Gutmann like being in Austria and love this country. As asset managers, however, the entire financial world is open to us. Our universe extends across all Western-oriented countries where our property rights are well protected.

Within this universe, we look for the best business models, led by management with integrity and capability. The companies must be large enough for us to be able to buy and sell without influencing the price. In addition, larger companies usually provide the professional framework of reporting and transparency for shareholders. 

You already own tangible assets in your own country that are not transferable? Then you are well advised to look at the wealth of the world at large when it comes to financial assets.