Veit Keller: Precisely Avoiding the Deutsche Bank Plunge, Shifting to Consumer and Healthcare Sectors to Lock in Positive Returns

At the beginning of 2016, the German financial markets were in turmoil. Just weeks into the year, Deutsche Bank, due to its high leverage exposure and derivatives risks, was continuously sold off, with its share price plummeting from around €20 at the beginning of the year to €13 in early February, hitting a record low. This became a concentrated manifestation of systemic risk across the entire European banking sector. At the same time, investor concerns about global economic growth intensified, commodity prices remained low, and safe-haven demand pushed up gold and yen assets.

Faced with the sudden plunge in the financial sector, many actively managed fund managers experienced significant drawdowns due to their high allocation to bank stocks. However, as early as the December 2015 portfolio adjustment meeting, Veit Keller had already begun to gradually reduce the weighting of high-beta financial stocks such as banks and insurance, shifting towards stable domestic demand sectors. In January 2016, he explicitly stated in an internal report: "The Eurozone banking system has not yet completed the structural repair following stress tests; Deutsche Bank's financial leverage risk is underestimated by the market, and the short-term risk premium is far from being realized."

While assessing the escalating financial risks, Veit Keller accurately identified two relatively resilient sectors:
1. German domestic consumer goods sector: He increased his holdings in leading brands strongly correlated with actual consumer purchasing power, such as Henkel, Beiersdorf, and Adidas. These companies possess high brand loyalty, stable cash flow, and a high proportion of overseas revenue, benefiting from the depreciation of the euro and the recovery in global retail demand.
2. Health and medical technology sector: Veit Keller re-allocated his portfolio to Siemens Healthineers and Fresenius SE. Siemens, as a high-tech medical device manufacturer, maintains stable growth in non-cyclical healthcare spending; Fresenius SE, due to its global network of hospitals and dialysis services, is considered a highly defensive healthcare service platform.

Thanks to his forward-looking assessment of financial risks and precise positioning in the consumer and healthcare sectors, Keller's multiple mixed funds achieved a counter-trend rise in February 2016, with an average return of +1.4%, while the DAX index recorded a decline of -3.1% during the same period, outperforming the market by more than 4 percentage points. Furthermore, the portfolio demonstrated excellent volatility control, with a maximum drawdown of less than 1.2%.

That month, the German magazine *Capital* quoted industry commentators in its column, stating: "While others were still anxious about pricing bank assets, Keller had already reduced portfolio risk to its lowest point. He didn't use defense to buy time, but rather used switching to gain the initiative."

This "precise avoidance + directional switching" marked Veit Keller's formal establishment of a "defensive growth" portfolio philosophy. In years of high macroeconomic uncertainty, he no longer blindly bet on leading sectors, but prioritized locking in a pool of low-volatility, high-certainty assets, seeking value opportunities amidst risk.

This move not only protected Allianz's clients' assets but also further solidified its professional reputation among German institutional investors. His quarterly letters are widely circulated among financial advisors and family offices, and are known as "practical templates that you can copy".