Fund selection - February 2018

Giovanni Becchere 

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

“Equity markets continued to be well supported by earnings. The macroeconomic environment and the climate remain favourable for risky assets. In both Europe and US we continue to have a preference for value-oriented strategies. In Japan we replace GLG Japan Core Alpha Equity with Capital Group Japan Equity. This strategy is managed by a pool of experienced managers with strong track records, who uncompromisingly reflect their own styles while stimulating each other’s ideas in building a well-balanced and diversified portfolio.”

Thomas Wells 

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

“Faced with stretched valuations and record-breaking stockmarket performance, it is easy to see why some commentators have suggested we have entered bubble territory. This may be the case for bitcoin, such assertions for the wider market, however, would be mistaken. The rally is based on improving fundamentals – increased earnings, a synchronised global recovery and the slashing of US corporate tax rate. Yes, valuations may be high, but they can certainly go higher. Enjoy this rally, but remember it will not last forever.”

Gary Potter and Rob Burdett

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

“The strong equity returns of 2017 prevailed while bond market volatility picked up in the first month of the year. Asia and emerging markets led the way with the JPM Emerging Opportunities fund being the best performer of the selection. The weakening of the dollar has been a significant feature of recent months and a major factor in the performance of the M&G Macro Bond fund’s negative return in the month. We remain conscious of a pickup in volatility and the opportunity that this could present in the coming year.”

Silvia Tenconi

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

“Top contributors in the portfolio were Fidelity FAST Emerging Markets Equity and Jupiter European Growth. The only detractors were M&G Global Dividend and Robeco US Select Opportunities. Equity markets rose in January, contributing the most to performance, while the dollar weakened and was a detractor. The approved tax reform in the US pushed markets higher worldwide and brightened the outlook for growth pretty much everywhere. We didn’t make any changes, 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 a positive start to 2018, the macroeconomic environment should continue to support equity markets. We decided to trim alternatives in order to increase the portfolio exposure to equities.We cut sector bets in global technology and European real estate in favour of more concentrated and opportunistic investments in emerging markets and Asian equities (through BlackRock Asian Dragon and Polar Capital Japan Fund), where earnings growth should continue to drive equities higher over the medium term.”

Paul Hookway

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

“Markets sold off in the second week of February, more for technical reasons rather than a deterioration in fundamentals. We make no changes to the asset class allocation but do make a number of changes in the implementation of the allocations. We sold half of the Hermes Asia ex Japan holding, adding Comgest Growth Emerging Markets. Elsewhere we modestly reduced Liontrust UK Growth adding to the holding of Loomis Sayles US Growth equity. In fixed income we took profits from Algebris Financial Credit adding the proceeds to Invesco Sterling Bond Fund.”

Bernard Aybran

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

“Both equities and alternatives have been adapted to the current environment. First, the US biotech holding has been fully redeemed as it staged a meaningful rebound in a very high volatility backdrop. The proceeds have been reinvested in a broader US equity ETF. On the alternative side, the exposure has been diversified by adding an extra holding, which implements a systematic approach to risk-parity, mixing long and short positions on equity, fixed income and commodity markets. The overall outcome is less directionality in the portfolio.”

Lee Gardhouse 

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

“Are we going over the top? Since the turn of the year the feeling that we are about to get a decent setback has been rising in the pit of my stomach. This feeling is invoked by US valuations, a narrowing of the market and recent crypto mania. So what am I going to do with my long term portfolio? I built a portfolio that was intended to not require constant attention. For me valuations are on the high side but in many cases not crazy and importantly I have faith in the managers I own to steer a steady course even if we do suffer my expected period of volatility.”

Peter Branner

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

“Black Rock European Diversified Equity Absolute Return is a systematic market neutral equity hedge fund investing on the European markets. It seeks to provide alpha using sophisticated sources not commonly used by more traditional managers. After a very weak 2016, last year the fund generated positive returns, though still noticeably lower than previous years. We still expect this strategy to be able to create uncorrelated positive returns in the long run but we put it on hold to monitor the progress of some newly implemented models.”