Fund selection - June 2013

Graham Duce

Co-head of UK multi- manager funds, Aberdeen Asset Managers

Based in London

“Global equity markets continue to perform, fuelled by increased monetary stimulus and improving economic data. US equities in particular have benefited from improving investor sentiment but the fresh market highs have been reached by quality defensive names within the index, as investors remain focused on yield and safe havens. This has created some discrepancies within US equities, in particular higher growth companies. We have introduced the recently-launched Blackrock US Growth fund, increasing our exposure to these names. We have reduced some of our alternative allocation by selling the Melchior European Absolute return fund.”

Peter Fitzgerald

Senior portfolio manager, multi-asset Multi-Manager, Aviva Investors

Based in: London, UK

“We made no changes to the portfolio, retaining our overweight to equities and underweight to bonds. Watching the daily or even weekly movements of equities and bonds, this market has the ability to confuse and misguide investors.  If, however, one takes a step back and observes the gyrations of market prices in the context of nacient economic recovery, helped by the clear reflationary policies of the major central banks, the world makes more sense. If one decides to invest on a longer time horizon than the end of the next quarter, we remain comfortable with our overweight equity positions.”

Christian Jost

Executive director and chief investment officer, C-Quadrat Kapitalanlage AG

Based in: Vienna, Austria

“C-Quadrat Flexible Assets AMI tries to benefit from the diversification effects of a sizeable multi-asset investment universe. The fund’s allocation has been geared to a predefined investment risk (with a risk corridor from 2 to 6.5 per cent volatility), with a current risk profile of almost 4 per cent volatility. We have been reducing our commodities exposure, mainly precious metals, and European equities exposure to keep volatility low. The positive performance contributors are properties, European large caps and healthcare. Total risky assets, including equities and commodities, are 60 per cent. The remainder is allocated to government and sovereign bonds.”

Management selection team

Eurizon Capital

Based in: Milan, Italy

“In April we did not make any changes to our portfolio, which underperformed its benchmark. The overweight equities versus government bonds gave a negative contribution to performance and off-benchmark exposure to European investment grade credit and emerging markets equities was detrimental. Fund selection in global and US equities funds yielded mixed results, with MFS Global Equity and Aberdeen World Equity lagging their benchmark and UBAM NB US Value largely underperforming the S&P 500. The top contributors were Invesco Pan European Equity, Natixis Global Value and M&G Global Dividend.”

Gary Potter and Rob Burdett

Co-heads of multi-management, F&C investments

Based in: London, UK

“The hope of further quantitative easing on the back of softer economic numbers drove markets up further, with Japan leading the way following the announcement of a huge monetary policy stimulus. The resulting decline in the yen compounded the return for euro-based investors. This led to the Nomura Japan Strategic View fund being the best performer of the selection. In a flat market for Asia, the Tiburon Taipan fund fell back on the month thanks to its commodities exposure, which suffered due to disappointing economic numbers from China. We remain positive long-term, but are aware of short-term volatility given the strong run in markets year to date.”

Thierry Creno

Local Head France, Global Balanced Solutions FundQuest, BNP Paribas Group

Based in: Paris, France

“Despite disappointing economic data and some jitters during the month, equity markets rebounded strongly during the second half of the month while bond markets also performed very well. The MSCI AC World and MSCI Emerging gained 2.9 per cent and 0.8 per cent respectively (both in dollars). Equity markets were led by a mix of defensive and value sectors like telecom, utilities and financials. Our conservative allocation did pretty well as all investments were positive contributors to the performance, led by Nomura Japan Strategic Value, the three bond funds and DBX Platinum IV Systematic Alpha.”

Lionel De Broux

Manager selection specialist, IPCM, ING Private Management

Based in: Luxembourg

“Performances have been mixed over the month. If fund selection has been detrimental within global equity and asset allocation, we benefited from our selection in emerging markets and in alternatives. CTAs and relative value strategies have been the
biggest alpha drivers over the month. While no change in the selection
has been implemented, we have reduced the exposure to equity in favour of relative value and convertible bonds.”

Bernard Aybran

Head of manager selection, Invesco

Based in: Paris, France

“The overall asset allocation has been kept unchanged over the course of April, as no major game changer appeared on markets nor did any of our investments have any specific problems. One change has been made, redeeming the emerging Asian equity holdings, on an asset allocation decision. While this investment did outperform emerging equities as a whole, it is likely major headwinds will remain on the region going forward, both from a macro and a bottom-up perspective. The proceeds have been reinvested on a globally diversified basket of growth stocks.”

Peter Branner

Global CIO, SEB Asset Management

Based in: Stockholm, Sweden

“Pragmatic trend following strategies in our alternative funds have made money during the year and in particular in April,  with returns well in excess of both equities and bonds. We remain positive on managed futures strategies as investor flow into favoured markets seems to continue, bond yields are low and this kind of strategy has a tendency to have the right portfolio characteristics if trends change. With opportunities in fixed income predominantly available in the credit market, we reduce our Ignis position slightly and add to our alternatives.”