Benjamin Hamidi
Senior portfolio manager, ABN AMRO Investment Solutions. Based in: Paris, France
“The current transition period to the ‘new normal’ of inflation has to be associated with a well piloted monetary policy tightening. On the supply side, tensions remain high. Households have still cash and are spending it. So the business cycle could continue with low real interest rates and low real economic growth. The main risk, that we are monitoring closely, is that the transition to this new normal may lead to policy errors by central banks. For the time being, we have decided to keep the current positioning.”
Luca Dal Mas
Senior fund analyst, Aviva Investors. Based in: London, UK
“Early indications for May still show an expanding global economy, albeit at a slower pace. Inflationary pressures continue to build in Europe while US figures looks to have peaked in March. The blockade of Black Sea ports risks further exacerbating food price increases if not lifted soon. After prolonged weakness, markets have stabilised during the last week of May, with equity indices rallying strongly. In portfolios we continue to express our preference for European assets while reducing our exposure to US and emerging markets equities.”
Kelly Prior
Investment Manager in the Multi-manager team, BMO Global Asset Management. Based in: London, UK
“Staggering inflation figures have confounded predictions. Risk assets tumbled mid-month, but economic data gave pause and, ironically, a reversal in market direction. While overall market levels were mixed but unexceptional, the rotation away from tech was brutal. On the flipside, the Magallanes Value Investors European Equity fund rose 5 per cent reflecting the better fortunes of “cheap” companies. We replace the Findlay Park American fund with the Pzena US Large Cap Value fund in the selection.”
Jorge Velasco
Director of Investment Strategy, CaixaBank Private Banking. Based in: Madrid, Spain
“The deteriorating growth and inflation scenario forces us to be strategically prudent. In addition to directional prudence, we have added another layer of prudence in relative value bets. For yet another month we maintain our strategic cautious positioning, underweighting risk assets and seeking defensive positions in fixed income. We remain very cautious in fixed income, credit remains unattractive. In equities, we are maintaining the last positions, although we have less and less conviction in each sector.”
Silvia Tenconi
Multimanager Investments & Unit Linked, Eurizon Capital SGR. Based in: Milan, Italy
“In May, the performance of the portfolio was negative once again. The only positive contributor was Invesco Pan European Equity. Equity and credit markets reached new lows, only to bounce back in the final part of the month, probably due to very oversold conditions. Meanwhile, the Fed is trying to walk a fine line between ramping inflation and recession fears. By the end of the month, we had sold Wellington US Research to open a new position in Vontobel US Equity: a high-quality fund, it should be better equipped to sail these stormy waters.”
Richard Troue
Fund Manager, Hargreaves Lansdown Fund Managers. Based in: Bristol, UK
“Once considered ‘boring’, dividend-paying stocks haven’t been popular in recent years. But fast-forward to 2022 and they are back in favour. Balance sheets and dividend cover seem in a good place compared with where they were last time equity yields were this high. Dividends can make up a significant portion of long-term total returns, and it’s worthwhile holding income-paying funds in a diversified portfolio. There are headwinds on the horizon, but at least you’re currently paid handsomely to ride these out.”
Paul Hookway,
Senior Fund Analyst, Kleinwort Hambros. Based in: London, UK
“The US 10 year remained around 3 per cent in May, and European 10 year rates edged up towards 3.3 per cent. We made no changes to the portfolio. While global economies are in a slow down, rather than contraction, we are unlikely to reduce our equity allocation. In fixed income, some consider the correction over-done with 10 year investment grade credit now offering 4+ per cent yields. We are not inactive; should we need to act quickly we will do so, but at present see no reason to change our positioning.”
Antti Saari
Chief Investment Strategist, Nordea investments. Based in: Copenhagen, Denmark
“The rough patch continued into May as global equities continued to find fresh lows and bond prices remained volatile. Worries about the war in Ukraine, rising financing costs, Chinese lockdowns and inflation have acted as a further drag on risky assets and made their valuations more attractive. However, excess focus on these negatives betrays the underlying strengths in the economy. With a stronger valuation tailwind and the continued support from corporate earnings, we continue to recommend an overweight in equities.”
Marco Pabst
Chief Investment Officer London at Union Bancaire Privée (UBP). Based in: London, UK
“May started out quite challenging, but markets managed to catch a bid during the last week, rebounding strongly. Support for equities was driven by declining bond yields on the back of easing inflation expectations. Growing concerns about the possibility of a recession put pressure on some commodity markets which helped to bring down inflation forecasts. Overall, both bond and equity markets closed slightly down for the month. The portfolio performed in line with major benchmarks and no changes were made in May.”
