Benjamin Hamidi
Senior portfolio manager, ABN AMRO Investment Solutions. Based in: Paris, France
“Equity markets declined overall in January with a rebound in volatility as scenarios for monetary policy were revised. Markets were driven by a strong rotation from growth sectors, sensitive to interest risk, to cyclical sectors. The economic and financial environment still seems favourable for risky assets and the low real yields of many asset classes (from money market to credit and high yield) still argue for a portfolio over-weighted in equities with diversification into emerging debt. We slightly increased our small-cap positions.”
Luca Dal Mas
Senior fund analyst, Aviva Investors. Based in: London, UK
“January started with yields rising across developed markets. Elevated valuations and sensitivity to higher rates meant growth companies fell more than the market, with the energy sector the only exception. On the economic front, China’s official PMIs were little changed while US GDP surprised to the upside. European surveys also showed upside. Various countries are now loosening restrictions imposed when there was less knowledge about Omicron’s impact, since in highly vaccinated areas its impact is now more similar to a bad flu season.”
Kelly Prior
Investment Manager in the Multi-manager team, BMO Global Asset Management. Based in: London, UK
“January bought volatility and huge rotation within markets. Covid-19 worries were replaced with hand wringing over the impact of central bank policies as it became clear that there is a different agenda on the table from the recent past. Both equities and bonds stepped back to varying degrees – cheaper companies fared better with the UK inching a positive return while others lost ground, though market levels hid a multitude of return outcomes. Step up active management, now is your time to shine.”
Jorge Velasco
Director of Investment Strategy, CaixaBank Private Banking. Based in: Madrid, Spain
“The basic structure of the portfolio remains unchanged. We continue with our defensive positioning in fixed income. Financial and covered bonds remain our main bets. In equities we maintain our biases, favouring Europe over Asia and the US. We maintain a certain bias to value trying not to be excessively biased towards defensive or cyclical. We made two changes, eliminating the med and tech exposure and introducing greater exposure to the financial sector. We also changed the US equities fund while maintaining its value bias.”
Silvia Tenconi
Multimanager Investments & Unit Linked, Eurizon Capital SGR. Based in: Milan, Italy
“In January, equity and credit markets deep dived, as the hawkish stance of the Federal Reserve spooked investors. The performance of the portfolio was negative as a result. We sold Ninety One European Equity and bought Janus Henderson Pan European Fund in Europe, and sold Vanguard US Opportunities and UBS ETF MSCI USA SRI UCITS to introduce AB Select US Equity Portfolio and JPM US Select Equity in the US. Asset Allocation remains unchanged, as we still favour equities and credit over government bonds.”
Richard Troue
Fund Manager, Hargreaves Lansdown Fund Managers. Based in: Bristol, UK
“Markets have got off to a poor start this year, and there haven’t been many places to hide. Equity and bond funds have suffered losses. There has been some benefit to holding ‘value’ funds, as investors rotated out of more growth-focused funds. Rising inflation and interest rates have renewed questions marks over the valuations placed on growth stocks. These broad moves mask some significant underlying volatility, and at times like these knee-jerk reactions are best avoided. In the longer-run I think this portfolio is well-placed for turbulent markets.”
Paul Hookway,
Senior Fund Analyst, Kleinwort Hambros. Based in: London, UK
“The publication of the Fed minutes from December precipitated the sharp sell-off in high growth stocks, in particular those which disappointed such as Netflix and PayPal. At the beginning of the month, we switched half of the Blackrock Continental European Flexible fund into JOHCM Continental European to reduce exposure to the growth theme. This had been agreed in December and executed at the start of January and certainly added value, on a relative basis, since then. We still maintain a modest tilt towards growth, though this is being reviewed.”
Antti Saari
Chief Investment Strategist, Nordea investments. Based in: Copenhagen, Denmark
“Risky assets began the year on the back foot with global equities falling into correction territory as yields rose rather quickly. That aside, not much has changed. Thus, we are inclined to treat this move as an exaggerated adjustment to market pricing that is likely to reverse as markets turn focus back to a growing economy and improving earnings outlooks. Further, the early stages of tightening monetary policy tend not to spell trouble for equities outside of slightly increased volatility, which we have now witnessed. Hence, we increase our equity overweight to 10 per cent.”
Marco Pabst
Chief Investment Officer London at Union Bancaire Privée (UBP). Based in: London, UK
“Market performance in January was amongst the worst on record for the first month of a year. Sticky inflation and rising interest rates were the main reasons for this sector rotation. The portfolio was positioned for that scenario and outperformed significantly as a result. GLG Japan performed strongly in absolute terms and emerging market exposure also did well, as did value-oriented funds such as Mandarine Europe. We would expect the ongoing sector rotation to continue, favouring value stocks, cyclicals and emerging markets.”
