GAM STAR PORTFOLIOS

Summary

GAM is a global independent asset management group founded in 1983 and headquartered in Zurich.

It’s been listed on the SIX Swiss Exchange since 2009, following its demerger from the former Julius Baer Group.

 

It has assets under management of CHF 122.0 billion (as at 31st December 2020), and employs around 701 staff with offices in 14 countries.

 

GAM Investment Management is regulated by the Swiss Financial Market Supervisory Authority (FINMA) since 1987.

> Large, established group.

> Brand Awareness

> They have many funds outside of their GAM Star Portfolios which are good funds.

> Ridiculously expensive.

> Advisers who use the GAM Star Portfolios often take hidden commissions.

> Underperformance.

Overview

GAM offers managed fund solutions’ that have an active asset allocation. GAM Investments say that they focus on asset allocation worldwide from a global opportunity set and capture future growth opportunities.

By far the most prevalent of GAM’s funds in the international marketplace are the Star Cautious, Balanced and Growth strategies.

The Star Portfolios are multi-asset risk rated portfolios.

The investment style is to use equity and fixed income asset classes and active mutual funds to try and outperform markets, and provide capital protection.

 

GAM have a bespoke arrangement with some offshore advisory firms. For example, several years ago, they teamed up with deVere Group and these particular GAM funds were pushed by the company and it's salespeople. This made it easier for their unqualified salespeople to manage client investments (mostly because they did not have to actually manage them!). Subsequently, clients were paying through the roof for their investments whilst the advisers and the company were making large sums in commissions, to the detriment of the client. The performance of these funds have underperformed other, cheaper multi-asset funds.

We have seen hundreds of investment portfolios held by expats that include GAM Star Portfolios with expense ratios exceeding 3% per year.

If an adviser recommends one of these multi-asset funds, proceed with caution.

If you hold these funds in your portfolio, contact us to get a second review and you may be surprised as to how much you are actually paying in fees every year.

Final Verdict

This is a classic adviser fund. Any qualified adviser would tell you that it is an overly expensive and underperforming option. We believe that there are more cost effective, more transparent and potentially better performing investment options.

The GAM Star portfolios are accessed in the offshore marketplace by financial salespeople on behalf of their clients through offshore bonds.

If you hold a fund via an offshore bond you should double check which share class you hold as it could be costing you more than you need in fees and performance.

The total costs of the offshore bonds, together with an adviser’s commission and charges within funds can create a severe drag on performance. This can, in turn, impact investment returns.

If you’re looking for the strongest possible growth on your investments, and you don’t want that to be undermined by high costs, or you are uncomfortable with your adviser accessing investments through an insurance wrapper and/or receiving kickback commission payments, then you may wish to consider alternative options.

Himalaya

Get in touch

Whether you need a second opinion, want to find a qualified adviser, or just have some questions, Expat Money is here to help.

We'll call or email, learn about you and take you through your options.