Union Investment Interview

Inflation and Other Dangers for 2016

Jens Wilhelm, Vorstand der Union Asset Management Holding_Bernd Roselieb for Handelsblatt
Jens Wilhelm is the Chairman of the Supervisory Board of Union Investment Real Estate and member of the Management Board of Union Asset Management Holding.
  • Why it matters

    Why it matters

    Union Investment’s CIO sees opportunities and challenges for investing in 2016.

  • Facts


    • Jens Wilhelm, Union Investment’s CIO, sees British exit from the European Union as a major threat to European markets this year.
    • Mr. Wilhelm says Germany’s blue-chip DAX could hit 12,000 points this year, up from 10,800 at the end of 2015.
    • The price of oil could start rising towards the end of this year to as high as $60 dollars a barrel, putting pressure on inflation, Mr, Wilhelm predicted.
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For the start of 2016, we chose a more unusual interview format. The idea was to confront the chief investment officer of Union Investment, Germany’s third-largest fund manager, with 10 provocative assumptions.

Jens Wilhelm, clearly enjoying the unorthodox conversation, didn’t agree with many of our – admittedly somewhat outlandish – challenges. But he used the opportunity to outline his own predictions for the path of financial markets in 2016.

Mr. Wilhelm, 49, is responsible for securities and real-estate funds at Union Investment, putting him in charge of some €235 billion in clients’ assets. It marks the lion’s share of the €260 billion that Union Investment, a cooperative fund manager, holds for private and institutional clients.

Among the risks that Mr. Wilhelm sees in 2016: An overreaction to rising inflation. Rising oil prices, he warns, could push up consumer prices in the United States. That could spook investors. In Europe, one of the key dangers: A British exit from the European Union.


Handelsblatt: Mr. Wilhelm, our first assertion: The DAX will break the 15,000-point barrier this year.

Mr. Wilhelm: The DAX will undoubtedly reach 15,000, but not in 2016. We’ll need a little more time. The DAX is likely to reach 11,500 to 12,000 points this year. It depends on the economy, which is currently running on autopilot worldwide. The global economy is growing robustly at 3 percent, the U.S. economy at 2.5 percent and the European economy at 1.5 percent. This allows companies to grow their profits, and stocks are subject to the Tina principle.

What is the Tina principle?

“There is no alternative.” In other words, there is no alternative to stocks.

But the interest-rate divide between the United States and Europe is growing. Is there a risk of a crash?

2016 will certainly be marked, once again, by considerable volatility in the markets. We are living at a time when investors should keep their nerve. Constantly reacting to fluctuations is pointless. Anyone who takes that advice will earn good returns with stocks.

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