DeGiro introduces secret costs
DeGiro secretly charged customers for transactions at foreign exchanges. There’s a line in the fee schedule nobody ever heard about. It says “Setting up trade possibilities” (pdf). This means doing transactions at an exchange abroad comes at a small extra cost.
Once you do a transaction at a foreign exchange, you will be charged a fixed fee per additional exchange. No matter how many trades you do. The English customers have this fee curbed at 0,25% – but this isn’t the case for Dutch investors. Very recently the cap has been removed.
Paying in 2016 for transactions from 2014
Apparently, DeGiro wants you to pay €2,50 per exchange per year. Nobody knew, even DeGiro themselves forgot about it. They didn’t charge anybody in 2015 nor 2014. Last week they decided to charge for both years. Of course without any notice or specification. And the fee was hidden back in December in the overview.
For most investors this is small change. The cost of €15 or €20 euro for two years isn’t a heavy burden. But no matter the amount of money involved ; you don’t want your broker to secretively charge you hidden costs. Two years after the fact. This is wrong at many levels.
Hidden fees, changed afterwards
This fee wasn’t clearly communicated in the fee schedule. Setting up trade possibilities? Nobody knows what this means. I didn’t know about it, and I have checked their fees closely. Wrote some earlier posts on DeGiro.
The fee schedule changed in the meantime. In the internet wayback machine I found another version from May 2015, with a capped charge (pdf, Dutch). In other words – DeGiro has changed the fee schedule in their advantage. And used it to charge people money. That’s not legal.
DeGiro has removed the cap somewhere between May 2015 en January 2016. This way they can hit the small investors too. If you have a very small portfolio (less than 1000 euro), you’re ripped if DeGiro charges you.
Vague description can mean anything. And they can charge you anything, because DeGiro doesn’t explain it. Nobody knows what other rabbits they pull from the hat. At least it’s certain they advertise with the wrong figures.
Secretive bookings
Charging in the third week of January, but setting the date a few weeks earlier. Not informing clients. No message on the website. No apology. If it wasn’t for this Dutch geek forum, perhaps nobody would have ever discovered it. Maybe it’s necessary to double-check all bookings at DeGiro (including dividends, currency stuff..).
Brokers need to be transparent. It’s other people’s money. DeGiro has a terrible track record, concealing matters seems their modus operandi. A shame, because a lot things would be fine when clearly communicated.
Retroactive
Charging in 2016 for a transaction you did in 2014. That makes no sense. I doubt it’s even legal.
Not-so-free ETF selection
There’s a selection of ETF’s you can invest in free of charge. Very attractive for small investors with a few hundred euros to play around. However, some of these free ETF’s are listed on a foreign exchange. Meaning a “setting up trade possibilities” cost is charged anyway.
The mystery of HiQ
The attached hedge fund HiQ invest keeps on sinking. Imploding, is a better word. First two weeks of the year the market neutral fund lost 12,4%.
There’s something strange with HiQ and DeGiro. With the “high watermark“, hedge funds can generate performance fees when the fund reaches a new all-time-high. That situation is out of sight. That’s an understatement.
Management fees aren’t enough for covering the costs. The strange thing is this. HiQ is counterparty for DeGiro’s retail flow. That should be a profitable business. That’s not rational. It’s throwing good money after bad. The owners of DeGiro and HiQ will never benefit from internalizing the retail flow.
People suggest there’s a side pocket from the founders, to avoid giving the proceeds to hedge fund investors. But there’s no source for this claim – and probably not the case.
DeGiro seeking financing
End of 2015 DeGiro was actively seeking external financing. According to DeGiro, this was for new marketing expenses. Other people suggest a lack of funds due operations. Either way, large investors were amazed by DeGiro’s proposal without balance sheet and especially lacking revenue figures. Reaction to the quest for financing was mostly negative. And everybody seems to know about it.
Penny wise, pound foolish
This isn’t the first negative post about DeGiro on this website (1, 2, 3). Maybe hard to believe, but I have no problems with Gijs Nagel or his partners. DeGiro could be a fine low cost broker. Somehow, they mess up terribly.
It’s beyond me why DeGiro would want to insult their clients. This will generate an estimated 10k for them. Or let it be 100k. Why bother for such a limited sum? This affair will alienate customers and hurt the image of DeGiro, again. A broker people don’t trust. That’s a costly affair.
If they really have 80.000 customers as they claim (not likely), it could add up to well over 1 million, not just 10k Jack. I think it’s a desperate attempt to generate some cash. Notice how they have almost completely stopped advertising on some websites. I can’t even remember the last time I saw an add of theirs on the website of FD.nl.
Next month, they have to publish the accounts for 2014 for themselves and the parent company LPE. Then we’ll finally get to see if business was as brisk as they claimed (net result 0, because Degiro spent the profit on advertising) or a huge cash drain. Not publishing their accounts on time would not be wise in case they go bust. (By law, their lack of proper accounting is then deemed a cause for the bankruptcy and management’s accountability is implied.)
One thing is certain: if they go belly up, the bankruptcy reports will be an interesting read and we’ll find out what really happened (number of customers etc) at Degiro. Wouldn’t be good for their reputations. Not that they’re likely to land themselves a paying job anyway. (Despite being the world’s best traders, of course.)
“The owners of DeGiro and HiQ will never benefit from internalizing the retail flow.”
They don’t internalize retail flow, they only match against HIQ, have you forgotten? But that is another discussion.
Churning the fund portfolio, and doing a lot of transactions, will cause losses for the investors of the fund (not the people behind De Giro / HIQ). But it can generate fees for De Giro, because HIQ also use De Giro as a broker. If HIQ simply route their “churning” orders via De Giro (and stop using Join Orders temporarily) it’s guaranteed income for De Giro.
Of course we can never prove that this has happened. But there is a very clear possibility to generate income for the owners of De Giro at the expense of the investors of the HIQ Fund. That’s why HIQ and De Giro should have remained separate from the start. It’s a clear conflict of interest, to be routing HIQ orders via your own brokerage De Giro.
Kind of puts the -12.4% in perspective if De Giro is really strapped for cash, doesn’t it?
Archive.org has the pdf with tarifs for 25 March 2014. There, it says “€2,50 (max 0.25% port) per jaar” i.e. without mentioning cost per exchange (!?) and with a cap on the cost. It perfectly illustrates their non-transparent operation to adapt fees and conditions.
One remark to ETFs and Funds. I first believed too they charged me for one of the Funds in their “Kernselectie” which is sold a “free”, but that was before it was known these costs applied to 2014 as well, which is a more logical explanation for the cost. Bottom line is that nobody has a clue what he has been exactly charged for.
Jack, you underestimate the amount of money involved. Easily 250k
People suggest you are charged the fee when you don’t trade, but just maintain a position at foreign exchange.
I noticed this yesterday and do feel a bit ripped off. Changing your fee structure in 2015 and using it to charge customers in retrospect for 2014? Pff. This can’t be legal. Class action lawsuit anyone? Lucky for them it’s not the US.
Notice how this is completely out of line with how they market themselves:
U BELEGT ZONDER VERBORGEN KOSTEN
Het openen van een account bij DEGIRO is kosteloos. En zodra u belegt, zijn de tarieven ongekend laag. DEGIRO is bovendien zeer transparant over haar tarieven. Zo weet u precies waarvoor u betaalt en komt u niet voor vervelende verrassingen te staan.
That’s right: ‘no hidden costs’, ‘we are very transparant’, ‘we won’t screw you over’. O wait, we didn’t really mean any of that. I’m going back to Binck.
Wat een oplichters
As a non-Dutch person who reads about Degiro constantly on this website, I have to think that it was just setup to simply exploit the Dutch stereotype of being cheap.
Can pay on the front end or the back end but the front end is always cheaper in the long run.
wederdom boevenpraktijken bij degiro, ver weg van blijven. Je schijnt ook 1 aandeel Shell bijv tegen 1 euro onder de beurskoers te kunnen kopen, HIQ neemt dan 1 euro verlies maar pakt de 2euro transactiekosten (het kan niet tegen een andere klant neem ik aan want wie wil er nou 1 euro onder beurskoers verkopen??), al heb ik dit nog niet zelf getest. Of dit allemaal mag vraga ik me af, maar degiro begeeft zich wel vaker op het randje of er overheen
The HIQ Market Neutral Fund did something comparable years ago.
When the fund was launched in 2007 they were pitching to investors that you could invest with them without the usual expenses that you would encounter if you would try set up your own Prop Trading business. In other words, the Fund management were really paying for their expenses (salaries, rent, Bloomberg machines, the accountants etcetera) out of their 2+20 or whatever ridiculous rate HIQ charges its clients.
Within two years they introduced the possibility for fund management to reset the high watermark once a year, effectively defeating the purpose of a high watermark. At least they were transparent about this change. They had to be. They were already begging investors to stick with them after their Volkswagen loss.
Then they closed the “A” class of the HIQ Fund with the 2+20 fee structure. Investors were welcome to put their money into the new D class. The same trading algos, but you were now expected to pay 3+30 for the benefit of not making money on your investment. A, D, what’s in a name.
Then came the “operating fee”. This fee, which is capped (i.e. charged) at 1% of the fund’s AUM, is a contribution to fund’s management expenses, in particular the trading software that was ALREADY being used by HIQ and developed by HiQ Trading Software, another company under the LPE umbrella. HiQ Trading Software also brought us the wonderful “matching engine” code that was developed for DEGIRO. HiQ Trading Software was also happy to provide the infrastructure, that is presently being used for HIQ and DEGIRO and being charged twice.
Of course the cost of the development of the software was not proportional to AUM of the HIQ fund and had in fact already mostly been developed in the years prior. HIQ doesn’t actually have to prove they incur certain expenses, they may (and will) simply charge 1% for assumed costs. Clients who were dumb enough to trust them with their money and absence of a high watermark probably wouldn’t understand what was happening, management must have thought.
So by now, HIQ were operating with a 4+30 structure which is totally unheard of in the hedge fund industry. At the very least, only the very, very best hedge funds might come away with charging such fees. I am struggling to even consider HIQ a hedge fund.
HIQ is operating with AUM at less than 20 million euros. In the absence of performance fees, they will receive no more than 4% of AUM. Their fixed costs hover around 2 million euros per year, as anyone who bothers to read their annual report can read. That’s quite a deficit that needs to be bridged … somehow, someway, somewhere.
Anyone who doesn’t expect more (hidden) charges from HIQ and DEGIRO is delusional. Might as well believe Santa climbs down your chimney.
@ anoniem 2:56
Dat zou heel interessant zijn. De tegenpartij kan niet een andere “gewone” klant zijn van De Giro, want zelfs al zou die zijn order 1 euro te laag hebben ingelegd, dan nog zou De Giro diens order in het kader van best execution hebben moeten routen naar Euronext, Chi-X of weet ik wat. En een beetje toevallig als net twee klanten precies 1 aandelen willen handelen op een onrealistische prijs.
Natuurlijk is het wel denkbaar dat Hiq de tegenpartij is. Zij zijn min of meer de default tegenpartij en de enige klant die bv een Join Order kan inleggen.
Op LPE-niveau snap ik dat het zin heeft voor Hiq om die trade te doen, want het levert +2 – 1 = + 1 euro op. Maar de schade van 1 EUR wordt geleden door de klanten van HIQ die evident te laag verkochten en wiens beste belangen Hiq hoort na te streven.
Het zou dus niet MOETEN KUNNEN wat jij beschrijft. Maar ik durf er mijn hand niet voor in het vuur te steken dat het niet gebeurt! Hierboven werd ook al vastgesteld dat HIQ de portefeuille een beetje kan churnen teneinde inkomsten te genereren voor De Giro. Dat zou ook niet moeten mogen, maar het kan. Geen accountant die tig duizend trades van 1 dag van een of ander vage algo gaat doorpluizen op churning.
Maar goed, Wie gaat ‘t testen?
Snel zijn met testen voordat Degiro en HIq het uitzetten!
They also see derivatives as a separate exchange. Dutch options (Euronext) on a Dutch stock – that’s an extra fee.
There’s this guy who booked 100 euro to his DeGiro account. Starting with investing, bought an EFT from the free selection.
Now he is charged with 2,50. The problem for DeGiro is when he purchased his ETF, the line with “setting up trade possibilities was “2,50 per year with maximum of 0,25%”.
DeGiro removed the cap afterwards. This is fraud by DeGiro. Small change, but ripping of thousands of small time investors is a big sum. DeGiro removed the cap for a reason..
“DeGiro removed the cap for a reason..”
Really, do you think so?
One of my favorites:
HIQ Market Neutral Fund AUM as of the end of 2015: less than $ 20 million.
From their due diligence questionnaire:
Q: What is the maximum capacity of your fund?
A: 1 billion
Q: What is the projected time frame to reach capacity?
A: The end of 2016
What is your level of portfolio turnover?
A: 5-6 times a day
Signed, Jasper Anderlul, Director, June 16th 2014
really? 5-6 times a day? that’s startling for a fund such as theirs.
middle of 2014 they were managing 75 million bucks. so around 400 million turnover on a given day.
according to interviews with that guy they were doing 50 thousand trades a day. so on average they
were moving 8.000 dollars per trade. that’s not unreasonable for a hft but it shows that most trades
don’t involve futures that are relatively cheap to trade.
factoring in clearing and settlement, it’s going to be difficult to trade for less than 1 dollar on average.
so your spending 50k a day or 12.5 million bucks a year against assets of 75 million. that’s almost 17% of
your aum that your spending on transaction costs. add to that the fund management expenses and the fund needs
to make a return of +20% (before transaction costs) just to break even!! no wonder they lost money for investors.
most people I know would consider this churning.
https://www.computable.nl/artikel/achtergrond/erp/4877794/1444691/performance-lijdt-niet-onder-transactietoename.html
I closed my account minutes ago by phone. They were stealing 7.5 euro’s . On the website, you can see your accountname. They added “EXIT” behind my accountname. Nice! Goodbye.
If you feel like you got “stolen” because of 7,50 EUR a year, I look forward to see what you’re gonna say at the end of the year after you paid 4 or 5 times more fees for every single trade you make… Such a smart move!
@ 3:24 PM
the fee of HiQ is 3% + 30% for the D-class, not 4%.
Many other funds also charge for accountantscost etc, and @ hiq that is included in the 1%. So it is not that odd, although the 30% is very high.
This is strange. deGiro just added “connection fee” on their website.
https://www.degiro.nl/tarieven/
(Scroll down)
Wasn’t there two days ago. Now you also have to pay when you don’t trade at all, just have a position.
Cool – charging people money and make up the fee schedule afterwards. Lol.
@ 5:37
You pay 3+30 to the fund manager after they have charged the fund 1% for using THEIR OWN TRADING APPLICATION, something they didn’t do the first couple of years.
Damn right that makes it 4+30!!! They just gave it a different name so they can fool gullible investors, such as yourself, who paid 2+20 in the past.
The operating fee explicitly does not include the auditor fees, according to their own info. Do you honestly believe other hedge funds are paying 1% of AUM for their Bloombergs and APIs let alone charging this to their investors??? Give me some examples please. The fund manager is supposed to pay for his own sh*t out of the 2%. What’s next, a fund that pays the fund management for their salaries, bonuses, rent and what have you not PLUS 2+20???
I hope Santa Claus was kind to you.
he was
I can’t find any job openings on for De Giro on the usual websites. For a company that was said to be expanding exponentially that is odd. Combine that with the (failed?) attempt at financing and this cash grab from their customers. It’s not hard to see where this is going.
http://www.degirogroup.com/jobs/
They hiring via this site.
@ 06:10
You don’t read correctly.
From the prospectus:
16.1.2 Operating fee
The Manager of the Fund bears its own costs, such as salaries, office lease and communication costs. Operating costs arising directly from the operation of the fund are borne by the Fund itself. Apart from the management fee, the following costs are charged separately to the Fund:
a. all forms of tax, if these arise, such as stamp duty;
b. interest expense is charged to the Fund;
c. transaction costs are charged to the Fund. The transaction costs are the costs charged by brokers, Clearing and stock exchanges for performing transactions;
d. short stock costs are charged to the Fund. Short stock costs are the (interest) costs charged for borrowing securities. Securities must be borrowed in order to be able to take short positions in securities.
e. costs of legal advice for specific potential securities transactions to be conducted by the Fund (e.g. in the case of a merger, restructuring or a claim);
f. costs of data information systems such as Bloomberg, Thompson Reuters or others;
g. costs of any legal or fiscal support for the Fund;
h. costs associated with any listing of a Unit Class are charged to the relevant Unit Class;
i. costs of trading systems (IT infrastructure and trading software) at the service of the Fund. This trading system is made available by HiQ Trading Software B.V. On the basis of the present situation, these costs amount to EUR 25,000 per trading location on the basis of 13 trading locations on an annual basis, as operated by the traders in the service of the Manager;
j. on the basis of the present situation, the costs of the administrative service by FundShare Administrator B.V. amount to EUR 94,000 per year plus 0.10% of the NAV of the Fund, as determined on the Transaction Day. The fee for the administrative service involves the following aspects:
• performing the administration of the Unit-holders;
• daily transaction and position reconciliation of bank balances and securities;
• assistance for audits and preparation of the Fund’s half-year and annual reports, and
• fees of the Depositary, Administrator and Accountant.
16.1.2.2 Maximisation of operating expenses
The operating expenses referred to in f to j above are maximised at 1% of the average NAV on an annual basis.
So that makes 2%/30% to 3%/30%. So not 4%/30%
You can complain about hiq or degiro, but make sure you have at least the facts straight.
@ 8:58 AM
Obviously only someone working at hiq/degiro would defend their fee structure.
It’s telling that degiro would rather take the time to copy paste from the hiq prospectus onto this blog than to address the more urgent issue that Jack has raised.
Now that I have gotten hiq’s attention, would you mind updating your Art 50 Bgfo forms? It’s been a while.
It appears the poster above was under the impression that the performance fee for the D class is set at 3%. He probably isn’t investing with them (and who can blame him for that?) That the actual fee is 1% higher on account of the ‘operating fee’ is a valid point. In the end whether the hiq fund charges 2+20, 4+30 or 0+0 is irrelevant. I also can’t see any new money flowing into their fund given their dismal performance. Which means that either they are doomed or they will increase the fees because they can’t cover their costs by far the way things stand.
what does it matter or he invests or not? If he wants to make statements, make sure you have the facts straight. I don’t work for them but invest in them. And i took the time to read their prospectus. Having said that: the performance is shit indeed!
Out of curiosity, (a) why did you invest in the Market Neutral Fund and (b) why are you still invested?
A) a (reliable) ex-colleague works there and the fund had good results in struggeling markets
B) I still trust that guy, and of course, but obviously when I would have known that the fund would lose so much, I would have gone out already a long time ago. But to sell it now on the low (I hope), is buying high and selling low, which doesn’t make sense.
When the stock market went down in 2008 I started buying, what made me a very good profit. I try now to do the same with hiq. Buy low sell high never die! Besides I pay no performance fee now, so it is fairly cheap, despite the management fee of 2% + 1% extra costs, since you don’t pay any performance fee in the coming years. Not sure they have a high watermark for new entrants though, otherwise I would step into the fund now.
hahahaha, investing in the Titanic makes more sense than a sinking hedge fund. The Titanic has hit already the bottom, you can buy low.
Or you could jump and rescue yourselves of the sinking fund.
The Aum is 17.529.576 in Euro per 14 November 2015, see doc halfjaarverslag 2015 MNF.
“Not sure they have a high watermark for new entrants though, otherwise I would step into the fund now.”
What if they old high watermark does not apply to new entrants? Either way performance fees would only be charged if they make money for you. You’re saying at 100% of the upside you’d invest more in what appears to be a sinking ship, but not at 70% of the upside? Does not sound like you truly believe in their ability to perform (I don’t either, but thats not the point.) Think about it.
@ 5:29
hedgefunds are a part of my portfolio, as it should be. I also invest in MAN since 2006. 2008 was fantastic of course, but I also sticked with them in the period 2009-2014 where they made 5 years no profit at all. Many people jumped ship and said the same about hiq now: that the strategy doesn’t work anymore etc. MAN went through the roof after that 5 years. (+30% in 1 year), so waiting paid off. Obviously nowadays markets are not in favourite of hiq, but I believe that will turn around as well.
We will see in a year who was right.
An obvious difference between MAN and hiq is economies of scale. MAN had billions under management which served as a cushion for them to continue their operations during tough times.
On the other hand, the hiq fund is operating out of 13 (co-)locations which allegedly costs them EUR 325k (13 x EUR 25k) annually. Right now AUM is down to 15 million or less. This means that the management fee (1-2%) + operating fee (max 1%) barely covers their server costs! Never mind the 1 million plus in salaries, the rent, the accountant etcetera. This is causing huge losses for fund management (HiQ Invest B.V.).
There are only a handful of ways HiQ Invest B.V. can improve their financial health:
(a) raising the already inflated management fees
(b) generating spectacular returns so that performance fees may be charged
(c) raising the operating fees inspite of the poor track record
(e) laying off staff, scaling down their operations
(d) is not realistic. Neither is (b) unless they would gamble at the risk of investors (heads the market neutral fund makes 50% profit, tails the market neutral fund goes bust)
(a) and (c) will come at the direct expenses of you, the investor. Right now, they need to raise the management fee to 9% (!!!) just to break even themselves.
(e) is difficult to do, without impacting the fund’s ability to make money in the future.
And every time investors withdraw money, these problems are going to increase. There should be some more investors who throw in the towel after the losses in January. It’s a vicious circle that’s difficult to break and in the end only the stupidest of investors remain invested. Do you want to be one of them?
Let’s face it, you can’t run a hedge fund with a staff of 20, half a dozen co-located servers around the world, an office and a marketing budget on income of 400k per year (AUM of $ 15m). Not even in Sofia, Bulgaria.
The group parent, LPE Capital, had equity of EUR 1.7m by the end of 2013 after about 7 years of doing business. We know DEGIRO has not made profits since then (they have said so themselves, everything was spent on marketing). HiQ Invest is looking at a million euro loss in 2015. So long as HiQ Invest doesn’t increase their fee income, they are looking at losses exceeding 1 million EUR per year and they will be bleeding their group of companies dry. What makes you think the people behind HiQ Invest / LPE would squander 1 million EUR every year just so that they can keep their little hedge fund on life support? These people are not billionaires
I think you are being overly optimistic if you think we will have to wait a full year to see that you were wrong.
(d) Attracting new investors inspite of the poor performance
Aum of 31-12-2015 just reported: 16.695.079 in Euro
31-10-2015 was 17.991.830
14-11-2015 was 17.529.576 performance of november was -/-1.02%
31-12-2015 was 16.695.079 performance of december was -/- 0.07%
As you can see, investors running to the exit. Almost 1.1 million in the 2 last months of 2015.
Interim performance of January is -/-12.4%. Without any investors running to the exit, the AUM must be around the 14-1-2016: 14.6 mio in Euro.
With this speed they hit the bottom soon, we do not need to wait for one year.
I have decided to pull the 14.5 million that I had saved for a rainy day out of their fund.
just put all the cash balances of degiro clients in the MNF fund, easy as that
@ 10:13 good explanation, looks like you have looked into it deeply
on the other hand, DeGiro still hires a lot of ppl. Looking at their HR-bitch, she doesn’t look like a person that finds all those ppl herself, so they problably use agencies to fill the positions, costing a lot of money. So as long they can spend that money on new ppl, it looks like DeGiro will have a very profitable year this year. That money can be used to cover up the losses they make at their fund and pay their staff at HiQ to keep them happy. Must be loyal ppl there to stay!
Interesting fee system: customers incur fees, and then the fees are increased before they are charged. I saw this fee in the Swedish price list long ago, but found it confusing.
What does the fee system at https://www.degiro.nl/tarieven/ mean? It says that you pay the fee if you hold NYSE positions. Are NYSE and NASDAQ different in this aspect? NYSE and NASDAQ share the same central securities depository, so storing two NYSE positions shouldn’t cost less than storing one NYSE and one NASDAQ position. If a company is listed on multiple stock exchanges, do you pay the 2.50 euro fee for all stock exchanges where the company is listed, or only for the stock exchange where you bought your shares?
One more interesting difference. In the Dutch price list it’s called “Opzetten handelsmogelijkheden”. Seems to mean the same as “Setting up trade possibilities” in the British price list. In the Swedish price list, it says “Handel på globala börser” meaning “Trading at global exchanges”. Less confusing, and nothing about being charged for simply holding a position. Also, the word “börs” is only supposed to be used for so-called “regulated markets”. You don’t use that word for pseudo-exchanges like First North and Aktietorget in Sweden or the Alternative Investment Market in the United Kingdom. The word should not be used for derivatives exchanges either.
An exercise for the fanatics on this website.
1) Make a scatter plot of the monthly return of the HiQ MNF versus the monthly performance of the oil future.
2) Calculate the correlation
3) Draw conclusions
(HiQ’s secret strategy is being long the oil future, no hedge needed because oil always goes up. I’m not joking)
Sounds like a strategy that I will happily pay 2+30 for.
http://fd.nl/beurs/1137696/forse-groei-voor-degiro
Yesterday´s unaudited results for 2014/2015 from De Giro (see above, full document on De Giro’s website) are typical bullshit numbers from De Giro. The key emphasis is on the word ‘unaudited’. The numbers in this document in fact contradict the statements from De Giro to their friends at the FD newspaper just three months ago. Statements that weren’t backed up with audited numbers then either.
Mid-October 2015, De Giro claimed that they had processed 2.5 million trades for their customers in the year 2014. Today this number was adjusted to 1.9 million. Kind of difficult to believe you can’t count the number of trades and be off by 30% (if not more). So after claiming to process 40 million transactions annually alone on Bolsa Madrid, De Giro continues to make up numbers.
The fee income (excluding incidentals) for 2014 was claimed to be 5.9 million in October, now it becomes 6.3 million. Maybe this is because they booked 400k for connection fees after October 2015.
Then in October they claimed to be administering some 1.7 billion euros for Dutch clients and 200 million for other clients from in total 80k customers. According to today’s release, the number of clients rose to 90k by the end of 2015, but AUM dropped to 1.6 billion in total, including 1.3 billion of Dutch clients. Doesn´t make any sense.
Pre-tax losses were around 500k in 2013, 1030k in 2014 and -2400k in 2015. Instead of booking these losses, the unaudited results contain a rebate from the Dutch tax agency of around 25%. De Giro has never made a profit in the past, so they are not eligible to offset these losses against corporate taxes paid previously. A rebate can only be received if and when De Giro actually makes a profit. And in the accounting, the fiscal loss reserve may only be activated once it is likely that De Giro will generate profits. But that doesn’t bother De Giro, they already book potential future tax relief as a hard asset, thereby dampening the losses they show to the outside world. No auditor that I know of would approve such accounting so now you know why De Giro chooses to work with ‘unaudited’ numbers. Fucking amateurs.
The only thing that these numbers underscore is that De Giro is losing money at an accelerating pace. At this rate and without additional fincancing, the losses incurred by De Giro and HiQ Invest B.V. will annihilate LPE’s equity by the end of this year. Other than that, Gijs might as well wipe his @ss with the document it is worthless. Except of course to journalists at FD who believe anything De Giro say.
Daar gaat HIQ weer….http://www.hiqinvest.nl/beleggingsfondsen/market-neutral-fund/koersinformatie.html
-15% in 2 weeks is quite an achievement for a market neutral fund. The fund has returned a whopping 2% in total since the launch in 2007. World’s best traders? Sure. How is the guy on here who decided to stick around now feeling about his investment now
Over at DEGIRO things aren’t looking great either. Several customers who set up an email account dedicated to their dealing with DEGIRO are reporting spam and viruses being sent by DEGIRO who may have had their servers infected with crap.
https://www.security.nl/posting/461120/Spam+naar+emailadres+speciaal+voor+De+Giro+aangemaakt
http://gathering.tweakers.net/forum/list_messages/1453319/last
Kan geen kwaad als er weer eens een actuele nieuwsbrief op de website van HiQ wordt geplaatst. Bij -25% YtD heb je toch wel meer uit te leggen dan de dooddoener dat de “trader-intensieve strategieen er hoopgevend uitzien”. Of zijn ze bezig om in zo hoog mogelijk tempo de portefeuille te churnen ten behoeve van Degiro? Hoe kun je in hemelsnaam zoveel verliezen op een beweerdelijk gehedgede positie?? Churn baby churn.
Het jaarverslag van HiQ over 2015 is uit. Het fonds zelf staat op een dik verlies en het vermogen onder beheer is in elkaar geschrompen. Het jaarverslag gaat over de stand van zaken bij de fondsbeheerder – dezelfde lui die ook achter de Giro zitten onder de LPE paraplu.
Het verlies over 2015 komt uit op ruim 1 miljoen euro (voor belastingen). In 2015 werd nog 2.5 ton euro gevangen aan uittredingskosten van alle beleggers die de handdoek in de ring gooiden (outflow van ruim 30 miljoen). Aangezien het fonds nu nog maar ca. 10 miljoen euro groot is, ligt een dergelijke bate dit jaar niet in het verschiet.
Daarnaast lag het gemiddelde vermogen onder beheer in 2015 een stuk hoger dan actueel het geval is. Ze begonnen het jaar immers met meer dan 60 miljoen. Aan beheersvergoeding leverde dat ruim 3 ton extra op ten opzichte van wat ze dit jaar kunnen verwachten.
Aan de kostenkant hebben ze amper kunnen snijden (of het moet gaan om het marketingbudget dat op nul is gezet) en zullen ze ook niet kunnen snijden tenzij ze flink wat personeel ontslaan.
Er dient daarom gerekend te worden met een verlies van ca 1.6 miljoen euro in 2016.
Dat de continuiteit van de beheerder tijdens het jaar 2016 daarom in twijfel moet worden getrokken wordt expliciet vermeld op pagina 12.
De opmerking dat LPE indien nodig (mogelijk?) kapitaal zal bijstorten teneinde HiQ te kunnen voortzetten onderstreept hoe belangrijk HiQ is voor hun andere deelneming, DeGiro, in termen van omzet die HiQ genereert voor DeGiro en aantal transacties. Kennelijk kan de een niet zonder de ander.
Op zich niets nieuws allemaal, want op dit blog is al eerder uitgelegd hoe slecht de beheerder er aan toe is.
Tot slot, al die verhalen over een dozijn nieuwe traders blijken (natuurlijk) onzin. Slechts twee handelaren zijn aangenomen (pagina 5).
Linkje? Care to share the report?
Go to their website, Document Center, near the top (Annual Account 2015).
http://www.hiqinvest.nl
Het Fonds is gedurende een groot deel van het boekjaar de enige gebruiker geweest van een nieuw
ordertype van DeGiro, dit ordertype heeft lagere transactiekosten en biedt extra mogelijkheden voor het
verdienen aan de “bid-ask spread”. Het gebruiken van dit ordertype heeft een positieve bijdrage geleverd
aan de resultaten van het Fonds. In het volgende boekjaar van het Fonds zal dit ordertype voor alle DeGiro
klanten beschikbaar komen.
Tijd om het beleggingsbeleid bij het Market Neutral Fund van Hiq weer eens drastisch om te hogen. Werd in het verleden nog aangeprezen dat de helft van het fondsvermogen ‘veilig’ in obligaties gestald werd, nu is het tijd om dat af te schaffen want er moet rendement gemaakt worden in een ultieme poging wat performance fees te genereren danwel omzet voor De Giro. Voortaan verdubbelen de toch al niet geringe, meestal negatieve uitslagen van het fonds. Twee keer zo hard naar nul? Begin mei alweer -3%.
Uit het addendum bij het prospectus van 23 april 2016:
“De wijziging heeft betrekking op een wijziging in het beleggingsbeleid en de daarmee gepaard gaande beleggingsrestricties [..].
De wijziging houdt in dat de beperking die het Fonds dwingt om steeds ten minste 50% van het fondsvermogen aan te houden in kredietwaardige obligaties [..] wordt opgeheven. Het Fonds kan vanaf de inwerkingtreding van de wijziging, het hele fondsvermogen als risicokapitaal storten bij de Prime Brokers en daarmee aanwenden voor zijn handelsstrategieën.”
Met gevoel voor understatement wordt hieraan toegevoegd:
“Houdt u er rekening mee dat de wijziging inhoudt dat het risico van het Fonds mogelijk toeneemt”.
Anyone knows how and where to report possible miscalculation of fees by broker in EU, NL ?
hi, I wonder then which broker would you suggest? I’m new to this, learning a lot these days and trying to figure out how to invest since I moved recently to NL.
Thanks,
Alex
Hi, can you suggest us a reliable and with fair fees online broker? No usa no NL only
thanks
Interactive brokers
I’ve heard nothing but good things about DeGiro except here. The €2.50 entrance fee is clearly marked in their funds schedule, at least right now. If they attempt to take money retroactively, that’s obviously something to be taken to court and decided there, but even with this fee, it’s still the cheapest option available so acting like they’re evil schemers is a bit much. Besides, they keep your investments in a seperate legal entity so you keep your investments even if they go bankrupt. It’s good to be skeptical of companies, especially new ones with such low costs, but DeGiro have been going now for quite a while, seem to be improving all the time and have great customer service, they’re even hiring at the moment, they wouldn’t be doing that if they were in trouble.
Johntan, you must be working at DeGiro?
Exactly how do you take a company that charges (steals) 5-10 euros retroactively from every customer to court? In the absence of a class action suit in Holland, that seems quite a challenge from a cost perspective. Please enlighten us.
About this seperate legal entity, exactly how are your investments protected if they were lent out to other customers such as their own shitty ‘hedge fund’? The legal entity that you speak of may end up no longer having the securities you had purchased but rather a claim against some other customer who may be in default themselves. Last time I checked that hedge fund had off-balance exposure equal to around 17 times their assets under management. The hedge fund keeps (some of) its positions in the same legal entity. Not difficult to see that this may leave quite a gap in what you think is being kept of your portfolio if they go under.
Leuk om te zien dat ze bij De Giro recentelijk weer nieuwe klanten hebben gelokt met het aanbod van de eerste 1000 euro aan transactiekosten gratis. Terwijl ze ook geld hebben losgepeuterd bij investeerders om de reclamecampagne te financieren, waarbij die investeerders werd voorgehouden dat zij betaald zouden gaan worden vanuit de omzet van nieuwe klanten. Een nieuwe klant zo, volgens De Giro, iets van 300 euro omzet per jaar opleveren. Geef je die klanten 1000 euro tegoed aan transactiekosten, dan is hun omzet de komende 3 jaar dus feitelijk nul en krijg jij als investeerder nul.
Blij dat ik daar niet ingetuind ben!