German investors are traditionally cautious, investing 56% of their assets in bonds at the end of 2011, compared with 38% in the UK, according to the European Fund & Asset Management Association. The difference in asset allocation is stark when you look at investment in equities. In the UK, investors allocated 42% to equities in 2011 compared with just 15% in Germany.

German investors do not embrace equities in the same way as they do in the UK, partly for historical reasons and because of a set of insurance rules called the Versicherungsaufsichtsgesetz, or VAG. The rules prevent institutional investors such as pension funds allocating a high percentage of investments into assets that are deemed "risky".