Fund selection - April 2018

Giovanni Becchere 

Head of Multi-Assets, ABN AMRO Investment Solutions. Based in: Paris, France

“Increasing market uncertainty and an outright stockmarket correction have managed to dent market sentiment. At the same time, while perhaps diminished, the macro­economic backdrop is expected to remain solid. Equity market valuations have risen but remain a reasonable distance from peak levels, especially in Europe which, together with emerging markets, remains our favorite region. This positive outlook is supported by a consensus view for double-digit earnings growth in 2018. Equity risk continues to be rewarded and so the portfolio is unchanged.”

Thomas Wells 

Fund Manager, Multi-assets Aviva Investors. Based in: London, UK

“As Baron Rothschild famously declared: ‘Buy when there’s blood in the streets, even if the blood is your own’. Markets are currently in a risk-off phase, but this doesn’t worry me. I believe the noise around the US-China trade spat will fade and fundamentals will reassert themselves. The global economy continues to grow at a healthy pace and companies’ earnings look strong across the board. With that in mind we increased risk in the portfolio adding to both Japanese and emerging market equities.”

Gary Potter and Rob Burdett

Co-heads of multi-manager, BMO Global Asset Management. Based in: London, UK

“The volatility that defined the first two months of the year continued in March as the prospect of a global trade war unnerved markets. Emerging markets were the surprise outperformers though the Majedie Asset UK Focus fund was the best performer. The US was the worst performing equity market, with the Artemis US Extended Alpha I EUR fund reflecting that. We replaced the BGF Continental European Flexible fund with the DNCA Invest Value Europe fund. We welcome the pickup in volatility and the opportunity that this could present.”

Silvia Tenconi

Multimanager Investments & Unit Linked, Eurizon Capital SGR. Based in: Milan, Italy

“March was a tough month for the portfolio. There were no positive contributors, and the worst performers were Eastspring Japan Dynamic Fund and Comgest Emerging Markets Equity. After a small recovery of risky assets in the first days of the month, news of a possible trade war between the US and their main trading partners roiled markets. Neither good macro fundamentals nor the retreat of interest rates were enough to offset the investors’ worries. We didn’t make any changes to the portfolio, as we are still confident the environment is favorable to risky assets.”

Jean-Marie Piriou

Head of quantitative analysis, FundQuest Advisor, BNP Paribas Group. Based in: Paris, France

“After our slight reshuffle last month, we keep global portfolio asset allocation unchanged even if recent momentum seems to be turning against the equity market bull run. Indeed, after February’s technical correction, stockmarkets finished March in the negative territory once again. Forecasts are for around 4 per cent  for global GDP growth, but US protectionist policies are a major source of concern. We see the return of volatility as a warning sign, but this market environment is not the time to reassess the portfolio’s positioning.”

Paul Hookway

Senior Fund Analyst, Kleinwort Hambros. Based in: London, UK

“While valuation, sentiment and macro backdrop all remained broadly supportive of a modest overweight to equities, momentum has turned negative. We decided to bring our equity allocation back to neutral, by reducing our overweight to European markets and increase fixed income and cash. We sold Jupiter European and trimmed three other funds. We increase the exposure to Japan by adding a holding of Tokio Marine Japanese Equity Focus. along with our exposure to investment grade credit, adding to the Invesco Sterling Bond Fund.”

Bernard Aybran

CIO Multi-management, Invesco. Based in: Paris, France

“As the quarter ended with negative returns for most major equity markets, remaining diversified is key. This is how the portfolio is positioned, with both a diversification of asset classes and geographies. Equity exposure has been diversified some more out of European markets to Japan, which sold off during the quarter. In alternatives, the diversification has been increased by adding to a global holding, using the proceeds of a long-held, European-focused, investment. In fixed income, actively managed funds fare much better than many indices.”

Lee Gardhouse 

Chief Investment Officer, Hargreaves Lansdown Fund Managers, Based in: Bristol, UK

“In a rare moment of action we added Lindsell Train Global Equity to our portfolio last month. This move into a global fund did not happen because we are more positive on overseas equities or because we think that the recent burst of energy from the pound is going to reverse. We added the fund because we think the managers have proven to be exceptional stockpickers. The longer I do this job the more sure I am that the key is investing with proven managers, capable of making the patient investor a lot of money, and holding them for as long as possible.”

Peter Branner

Global CIO, SEB Asset management. Based in: Stockholm, Sweden

“The resource heavy organisation at T.Rowe Price has a global reach and wide coverage. One of the products emanating from the setup is the long only Global Focused Growth Equity Fund. Its good performance is based on the manager’s ability to cooperate with the large number of analysts and to get the best from them. The portfolio is focused and only the highest conviction ideas make it in; the result is a well balanced fund where the majority of the outperformance comes from stockpicking. We add this fund and finance it by selling JO Hambro Global Select.”