Person of the Month

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«Performance measurement is more transparent for portfolio managers than for many other professions.»

Stefano Zoffoli quer

Stefano Zoffoli
Chief Strategist, Swisscanto Invest by ZKB

Stefano Zoffoli heads the Multi Asset Balanced team, which is in charge of managing traditional, mixed institutional mandates and funds. As Chief Strategist, he is additionally responsible for determining and communicating the Swisscanto Invest investment strategy. Born in the canton of Ticino, he holds a Master of Economics degree from the University of Zurich and began his career as an economist at Credit Suisse from 1992 to 1996. This was followed by ten years at Julius Baer Asset Management and a stint with Deutsche Bank before he joined Swisscanto in July 2016.


Stefano Zoffoli, what motivated you to do what you do today?

It goes back to the wave of privatisation in the 80s. As a teenager, the reports of the miners’ strike in the UK made a big impression on me. The constant depreciation of the lira, meanwhile, meant that I could buy parts for my moped cheaply in Italy, but I wanted to understand why this was the case. So I studied economics. There isn’t a huge choice of job profiles for an economist, and fate led me to the economic analysis department of a bank, which turned out to be a stroke of luck.

Which was the best decision you took in your career?

Generally speaking, I’m very happy about the move from pure analysis to practical implementation, which I feel suits me better. I was very quickly confronted with a big decision that set me up well for later on: I sold the hedge fund LTCM out of a portfolio I’d just taken over – just before it collapsed. I didn’t understand the investment, so I couldn’t see why it would fit into the portfolio. Ever since then, I’ve tried to stick to a meticulous due diligence process. This is virtually impossible without the aid of specialists, particularly where alternative investments are concerned.

Have you ever regretted a professional decision?

Sure, more than one... It comes with the job. There’s much more uncertainty on the financial markets than you get in other jobs, so the aim is to get it right more often than you get it wrong. Ultimately, bad decisions are an inevitable consequence of diversifying investments, although research into behavioural finance has shown us that losses aren’t accorded the same emotional significance as profits. This makes it important for management to strike a good balance between rigorously avoiding errors in day-to-day business and accepting them as part of the investment process. For me, it’s also important that we can measure performance contributions – both positive and negative – and draw conclusions about our capabilities.

What is the biggest challenge you have faced in your career to date?

Die Kontinuität. Es ist eine HerausforderunContinuity. It’s a challenge to generate above-average returns for our clients in a constantly changing environment. I’m not just talking about worldwide economic changes like globalisation, currency unions and technological progress, but also organisational and regulatory changes and increasing pressure on margins. On top of all this, a short investment horizon can sometimes make things harder for us. That said, there are positives as well. One of our multi-asset funds, for example, turns 50 next year and has enjoyed great success under the same portfolio manager since 2001.

Who do you think of when you hear the word «successful»?

I’d tend to think of a team. The French national football team that won the World Cup in 1998 had what it takes to succeed and went all the way amid the huge pressure of being the host nation. They had leaders like Deschamps, who’s now the manager, technical wizards like Zidane, hard workers like Blanc and finishers like Trezeguet. The employees who make up a team – in whatever industry – often take on similar roles, and of course it’s important to put the right person in the right place. Within an investment committee, you have to promote various strengths, in particular through qualified co-determination and a critical approach in the context of the favored criteria – mm such as valuation, momentum, macro forecasts and technical analysis.

What do you enjoy most in your job, what least?

What I enjoy most is achieving returns that beat the benchmark and our competition! Obviously, that’s the reward for all our hard work, which includes ensuring that everyone involved agrees on an investment process that’s as easy to understand and as consistent as possible. I honestly enjoy that. We get to do a lot of analysis of fascinating relationships between macroeconomic factors that we would otherwise just take note of in passing: when are US equities expensive, how do investors in emerging market bonds behave, does the gold price rise when the markets are in turmoil? The thing I still enjoy the least, albeit outside the confines of my work, is when people make the accusation that portfolio managers aren’t transparent. I’ll admit that we’ve played our part in allowing people to get this impression in the past, but these days I wish it were as easy to compare performance, charges and risks for doctors, lawyers and tradesmen as it is for portfolio managers.

What swearword do you use most often?

I grew up in Lugano, so I swear in Italian. I’m too polite to repeat my go-to swearword here – suffice to say that my colleagues have adopted it as their own without really knowing what it means and can be heard shouting «Katze!».

What is more important or less important to you as you get older?

I’ve never really thought about it, to be honest. I suppose I’m slowly becoming harder to impress, which gets on my sons’ nerves when I don’t show much enthusiasm for whatever plan they’ve just dreamed up. This makes it all the more important to stay curious as you get older, to keep discovering new things and taking risks.

What is your favorite anti-depressant?

I can think of two: playing football with my colleagues and certain scenes with Inspector Clouseau in the Pink Panther movies.

What book are you reading at the moment?

I’m alternating between «Finance and the Good Society» by Robert J. Shiller and «L’absence» by Philippe Besson. The first is with a reading group at work, where we discuss general economic topics rather than just brokerage research or articles from journals. Shiller attempts to portray the banks’ role in the economic system objectively and pin down why large sections of the population have become hostile towards them since the financial crisis. The second book is part of my efforts to improve my French.

What wallpaper image do you have on your mobile phone?

It’s just black. It saves the battery, and any picture would be an added distraction on top of all the endless messages and notification sounds.