ABN Amro Launches First Private Banking Index

by Phillip Morton, Investors Offshore.com

22 April 2005

The first international index measuring the returns from private banking portfolios was launched yesterday by Dutch-based investment bank ABN Amro.

The pioneering new index, which is calculated from data supplied by around a dozen private banks, is intended to illuminate investment performance in an area that has hitherto been hard to gauge, not least due to the industry's need to maintain a degree of confidentiality.

“The private bank industry has been acting in the dark until now,” observed Ariel Salama, head of private bank coverage in ABN Amro's wholesale client business, according to the Financial Times.

“There has been an absence of established performance measures due to confidentiality constraints and the inherent difficulties of using traditional techniques. We believe the creation of a transparent, multi-asset benchmarking tool is an industry-shaping moment," Salama added.

The new index can be viewed online with various charts showing a range of achievable returns over a 12-month period.

According to the index, a typical low-risk European portfolio would have generated a return of 3.5% to 4.7% over the past 12 months, whilst a high-risk euro-denominated portfolio would have returned 5.3% to 6.5%.

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