Benjamin Hamidi
Senior portfolio manager, ABN AMRO Investment Solutions. Based in: Paris, France
“After a strong recovery in 2021, financial and macroeconomic conditions remain favourable for equities, relative to other asset classes. This is supported by inventory rebuilding, high levels of firms profitability and margins, investments and still strong household balance sheets. The pandemic, the slowdown in manufacturing activity, or the upward trends in inflation and their effects on monetary policy, have so far resulted in temporary pullbacks and spikes in volatility, but have not jeopardised market conditions. Inflation and interest rates dynamics could continue to fuel high risks of style rotations. In this context, we keep our preference for equities over fixed income and a balance approach on styles.”
Luca Dal Mas
Senior fund analyst, Aviva Investors. Based in: London, UK
“Most countries are seeing the Omicron variant raise infection rates, but it looks like the initial wave in South Africa has peaked earlier and with less severity than feared. Economic survey data is strong across the board, while inflation continues to surprise mostly on the upside, with readings not seen since the 1990s. After a correction, equity markets reacted positively and ended another positive year for the asset class. Bonds sold off, with interest rates moving upward after a couple of months of downside pressure. In portfolios, we have proceeded to rebalance our allocation and further reduce our exposure to Emerging Markets in favour of US Equities.”
Kelly Prior
Investment Manager in the Multi-manager team, BMO Global Asset Management. Based in: London, UK
“The developed market central bankers yet again took centre stage in December, confirming the expected reversal of ultra-supportive policy in the coming months. Economic news continued to support these actions with inflation remaining elevated, though the growth in Covid cases —and global restrictions in response —may create an unsettling few weeks as we enter the new year. Currencies were volatile in the final week of the month, with sterling surging as the yen weakened, which compounded a strong move in UK assets, leaving them the best performer in the month. The Mirabaud UK Equity Alpha reflected this as the best performer of the selection, while the Spyglass US growth fund continued to suffer, despite the US having a reasonable month.”
Jorge Velasco
Director of Investment Strategy, CaixaBank Private Banking. Based in: Madrid, Spain
“We are starting 2022 by keeping the structure of our portfolios the same. Half of our portfolio remains invested in equities, with the remainder distributed between fixed income and absolute return strategies. We continue with our defensive positioning in fixed income, Financial and covered bonds remain our main bets, while trying to limit the overall duration of portfolios. We maintain our exposure to alternatives, as their low correlation helps to keep the volatility of the portfolios under control. In equities, we maintain our biases, favoring Europe over Asia and the US. We also maintain a certain bias to value, trying not to be biased towards defensive or cyclical in excess.”
Silvia Tenconi
Multimanager Investments & Unit Linked, Eurizon Capital SGR. Based in: Milan, Italy
“Equity and credit markets rebounded last month, as news on the Omicron variant was better than expected and lockdowns weren’t imposed in a widespread mode. Value regained traction, while ‘Covid winners’ retreated. The main contributors were Invesco Pan European Equity, Robeco US Select Opportunities and MFS European Research. Last year was a very positive one for the portfolio, due to its high equity exposure. Our outlook for 2022 implies lower returns for risky assets and higher volatility: we keep our positioning on equity and credit, yet risk management will be increasingly important going forward.”
Richard Troue
Fund Manager, Hargreaves Lansdown Fund Managers. Based in: Bristol, UK
“Overall, 2021 was a decent year for the portfolio. It was good to see funds like JOHCM UK Equity Income rebound well, while overseas investments provided a decent boost too. More defensive fixed-interest and total return investments provided some shelter when needed. This year has started much as 2021 began, with a sell-off in bonds and something of a resurgence for value-focused funds. With inflation, monetary tightening, and Covid variants still hot topics for the year ahead, the ultimate direction of markets in the short-term is anyone’s guess, so my plan for now is to stick with the same diversified portfolio that served us well last year.”
Paul Hookway,
Senior Fund Analyst, Kleinwort Hambros. Based in: London, UK
“Investors had to deal with sharply rising numbers of Covid cases and new restrictions to slow its spread. Inflation also continued to rise, though only the UK raised rates to 0.25 per cent in response. Value outperformed growth, helping the UK to outperform global markets, helping our UK allocation. Given increasing uncertainty in the short term, we made no changes to the portfolio, preferring to play a waiting game instead, until there is greater clarity in markets. While we still favour equities over other asset classes, we will reduce this if the macro environment deteriorates over the coming months.”
Antti Saari
Chief Investment Strategist, Nordea investments. Based in: Copenhagen, Denmark
“Equities performed strongly in 2021 despite some on-and-off concerns over the coronavirus and related lockdowns. We remain of the view that current consensus earnings estimates are too conservative given the still strong economic backdrop. Specifically, we expect global earnings estimates to be revised up by at least 5–10 per cent. A tightening monetary policy, however, is sure to increase market volatility from a very low starting point last year, but we are not yet at a point where it normally creates significant trouble for equities. Put together, we think this year will be good for equities but not as good as last year. Hence, we keep equities overweight.”
Marco Pabst
Chief Investment Officer London at Union Bancaire Privée (UBP). Based in: London, UK
“Markets recovered strongly in December, after a sluggish performance the month before. Equity market gains were still largely driven by a narrow group of stocks in the US, but optimism is increasing that the pandemic will soon be behind us. Performance last month was solid, boosted by large-cap quality as well as Japanese equities. Value underperformed somewhat, detracting slightly from the overall performance. Fixed income holdings delivered positive returns, outperforming their benchmark, which declined. We have increased our equity exposure by around 4% to benefit from seasonally stronger equity markets and a more broad-based recovery.”
