Benjamin Hamidi
Senior portfolio manager, ABN AMRO Investment Solutions. Based in: Paris, France
“The slowdown in the manufacturing sector continues and their risk of deterioration is increasing. In addition, the risk of energy shortage in Europe may have systemic implications. The cash available to some households and companies, and the strongly negative real interest rates nevertheless remain supporting factors for risky assets, justifying a more moderate position on equities. July’s rebound is therefore an opportunity to reduce European equity exposure and take a more neutral position on US equities”
Luca Dal Mas
Senior fund analyst, Aviva Investors. Based in: London, UK
“The conflict in Ukraine and the impact on Russian gas supply continue to take centre stage, but recently, local politics in Italy and the UK have also been disruptive. Concerns about slower growth around the world have intensified significantly. Survey data tumbled everywhere, with the manufacturing sector in particular showing signs of cyclical weakness. Global bond markets seem to have now shifted to worrying more about recession risks than high inflation, with equity indices rallying during the month in expectation of less tight monetary policies.”
Jorge Velasco
Director of Investment Strategy, CaixaBank Private Banking. Based in: Madrid, Spain
“In addition to directional prudence, we have added another layer of prudence in relative value bets. We are maintaining our strategic cautious positioning, underweighting risk assets and seeking defensive positions in fixed income, and remain very cautious about fixed income. In equities, we have slightly reduced our emerging markets positions due to the worsening of expectations, but we maintain the overall risk level, increasing the position in an equity world fund. We have less and less conviction in each sector.”
Kelly Prior
Investment Manager in the Multi-manager team, Colombia Threadneedle Investments. Based in: London, UK
“The outlook for inflation and growth continued to dominate market talk in a month that saw an about turn in leadership with growth stocks taking the baton. Falling commodity prices reflected fears of falling demand with central bank becoming data dependant — a change in stance from recent years where forward guidance meant few surprises. The US market staged a phenomenal return with double-digit returns, but it was the Berenberg European Small Cap fund that led our selection, thanks to a bounce in a long forgotten area of the market.”
Silvia Tenconi
Multimanager Investments & Unit Linked, Eurizon Capital SGR. Based in: Milan, Italy
“In July the performance of the portfolio recorded a strong rebound. The only detractor was Lyxor MSCI China UCITS ETF. A pivot to a more dovish stance is now expected from the Federal Reserve. Interest rates have been coming down massively in the month, fueling a relief rally in risky assets, from equities to credit. We sold JPMorgan US Value, taking profit on value outperformance, and initiated a new position in BNP Paribas Equity US Growth to take exposure to the hardest hit part of the market that is most sensitive to rates.”
Richard Troue
Fund Manager, Hargreaves Lansdown Fund Managers. Based in: Bristol, UK
“Part of the challenge of fund selection is that there’s rarely a clear-cut answer to any question, and you must regularly question your conviction. Fund manager retirements are a case in point. Should you stick or twist? When Jeff Atherton took over Man GLG Japan CoreAlpha in January 2021, I chose to stick. He’d worked with the existing managers a long time, demonstrated success implementing the fund’s philosophy, and the succession was well-planned. So far, so good. The fund is up almost 30 per cent, compared with a 4 per cent decline for the Topix. ”
Paul Hookway,
Senior Fund Analyst, Kleinwort Hambros. Based in: London, UK
“While the global economy is not yet in a recession, the leading indicators we track are starting to predict that a contraction in gross domestic product is increasingly likely. In this scenario, equities will struggle to perform relative to other asset classes. We have decided to reduce equities by 4 per cent, adding the proceeds to cash and building up our dry powder to exploit anticipated future declines in equity markets. We took the majority of the reduction from the portfolio’s European exposure and trimmed our amount with Pictet Global Environmental Opportunities.”
Antti Saari
Chief Investment Strategist, Nordea investments. Based in: Copenhagen, Denmark
“Performance in July was good — especially after the Fed’s meeting, which seemed to have opened up to the possibility of a slower hiking pace going forward. Once again, the rally in risky assets has been supported by falling real rates. Despite the bounce in equities, the economic and earnings outlooks have continued to soften. While it is quite plausible that equities will not find new lows this year, we think the risks are too elevated and therefore recommend a neutral allocation between equities and bonds. ”
Marco Pabst
Chief Investment Officer London at Union Bancaire Privée (UBP). Based in: London, UK
“July saw a strong recovery of equity and bond markets as stocks bounced back from oversold levels. The second-quarter provided some support, although results reflected the difficult trading environment on the back of slowing economies and persistently high inflation. No changes were made to the portfolio, which somewhat underperformed in major indices amidst the market rally. Emerging markets led by China lost money during the month as hopes of a recovery were dampened.”
