Fund selection - December 2017

Giovanni Becchere 

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

“The positive environment for investing in stocks remains in place. Within developed markets, this year we have had a slight preference for European stocks. The main reason was the stage of the economic recovery, where the US was seen to be deeper into the business cycle. For European markets, some of these positive factors may have played out, after strong positive returns. In the meantime, the US has become more attractive. So we decide to reduce exposure to Europe and increase exposure to US, and, in terms of style, a preference for value investing.”

Thomas Wells 

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

“November saw markets tread water as they waited on news of whether US tax reform would be passed. Our risk-on portfolio delivered flat returns in spite of macroeconomic data continuing to be positive; any gains from our Japan and US equity managers were offset by losses from Europe. This should not come as a surprise though given the strong performance numbers we saw in September and October. We remain of the view that investors are being rewarded for being overweight risk today. Being comfortable with the shape of the portfolio, we made no changes this month.”

Gary Potter and Rob Burdett

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

“For the 13th month in a row the MSCI World Index recorded a positive return during November, as did the S&P 500.  It was however, the JPM Emerging Markets Opportunities fund of our selections that performed the best and we remain overweight towards this area, as well as Asia and Japan. As we approach year-end the global economy is growing on a very broad basis with only five countries in recession.  However, valuations  reflect this. From here, we, and the managers we choose, will need to be ever more selective.”

Silvia Tenconi

Hedge Funds & Manager Selection, Eurizon Capital. Based in: Milan, Italy

“The portfolio ended November with a slightly negative performance. On average, European Equity funds fell, while US, emerging markets and Japanese equity funds’ contribution was slightly positive. A disappointing performance came from Carmignac Patrimoine, that has been struggling since the beginning of the year. We did not make any changes to the portfolio, as we are still confident the environment is favourable to risky assets.”

Jean-Marie Piriou

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

“The global macro-economic environment is still favourable: recent indicators are starting to show a better global growth. Monetary policies continue to be extremely stimulative and cautious in order to prevent any excessive market reaction, with inflation under control in the US, Europe and China. In that context, we keep our portfolio unchanged and significantly exposed to equities.”

Paul Hookway

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

“US consumer confidence and manufacturing sentiment are close to 30 year highs and European macro data remains strong. Opec’s  extension of production cuts should secure oil prices and broad agreement appears to have reached on the Brexit divorce settlement. November was a challenging month, with the portfolio suffering from losses driven by equity exposure. For example, BlackRock European and Hermes Asia ex Japan saw losses from overweights in industrials, technology and consumer services, although both funds have delivered excellent performance in 2017.”

Bernard Aybran

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

“The equity investments have been diversified some more by increasing Japanese stocks at the expense of Europe. On the fixed income side, a core fund held for a while has been redeemed in order to add an investment into a more diversified portfolio, whose mandate allows to get exposure from any region, both developed and emerging, and any rating. Overall, the foreign exchange exposures remain key to the performance of the portfolio, with a very strong euro across the board, which means all investments must consider this parameter.”

Lee Gardhouse 

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

“‘Don’t just do something, sit there,’ said Warren Buffett. Once you have built a portfolio that suits your needs and temperament, while you should constantly question yourself, don’t be tempted to tinker. While your clients might want to get their money’s worth (i.e. see that you are making decisions and doing ‘stuff’) this is exactly the wrong way to invest. I set up this portfolio 16 months ago and have not felt the need to make any changes yet. This does not mean it has all been plain sailing but fundamentally I still believe in the markets potential for further growth.”

Peter Branner

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

“BlackRock European Diversified Equity Absolute Return is a systematic market neutral equity hedge fund investing on the European markets. The fund relies on three underlying selection strategies, being large cap, small cap and mid horizon, to build a robust and diversified product even taking into account diversification over time. The Systematic Active Equity team that runs this fund trusts the most edgy artificial intelligence systems available on the market today to get insight in capturing trends. We trust the fund to do well for us going forward.”