Benjamin Hamidi
Senior portfolio manager, ABN AMRO Investment Solutions. Based in: Paris, France
“Russia launched military action against Ukraine. As a result, financial markets went into risk-off mode. Equity markets dropped while yields fell. For now, we expect the macroeconomic impact of Russia’s actions to be mainly on the energy front via higher oil and gas prices, and a return to underlying market fundamentals, but there is too much that is still unknown. Once a conflict recedes, financial markets can recover quickly. Therefore, for the time being, we are sticking to the current positioning which is already showing a preference for equity versus bonds, and a balanced approach between growth and value strategies due to high-rotation risks.”
Luca Dal Mas
Senior fund analyst, Aviva Investors. Based in: London, UK
“Equity markets fell on the news, exacerbating the negative trend we have seen since the beginning of the year. At the same time, classic safe heaven assets such as government bonds and gold rallied, with energy prices spiking higher. On the economic front, inflation readings continue to surprise on the upside, increasing pressures on central banks. The latest economic surveys from around the world still point to expanding economic activity, albeit at a slower pace. During the month we have marginally increased our bond allocation in order to balance our risk exposure.”
Kelly Prior
Investment Manager in the Multi-manager team, BMO Global Asset Management. Based in: London, UK
“As I write, any narrative around the impact of a reversal of central bank loose policies and tightening financial conditions becomes increasingly irrelevant by the hour. The situation in Ukraine has thrown markets into a state of flux as the impact of the conflict and the second order effects are considered. February was not a pretty month, with all markets falling. Large caps in the UK stood out as holding firmer ground; however, the worst performing of the selection was the Mirabaud UK Equity Alpha fund, with its focus away from large caps. The Morant Wright Japan fund made positive returns in the month as value continued to flourish as a style in this forgotten market.”
Jorge Velasco
Director of Investment Strategy, CaixaBank Private Banking. Based in: Madrid, Spain
“As a consequence of recent events in Eastern Europe and the greatly increased uncertainty of the scenario, we have slightly reduced our exposure to equities as we wait to see how events evolve. We increased the weight of fixed income in the portfolio, maintaining basically the same defensive approach as in recent months. We remain short duration and maximise the credit quality of the portfolio without neglecting potential opportunities as they open up. In equities, we reduced our overweight in Europe and eliminated some investment biases. We made no changes in the alternatives portfolio.”
Silvia Tenconi
Multimanager Investments & Unit Linked, Eurizon Capital SGR. Based in: Milan, Italy
“In February the performance of the portfolio was negative, as the Russian invasion of Ukraine led to a sharp sell-off in all risky assets, a halt in the rise of interest rates and to the spiraling of commodities prices. We keep our allocation unchanged, given the strong fundamentals in the economies of the US and Europe, China trying to restart its economic growth and Asia being rather insulated from the crisis. Interest rates may still go up, due to galloping inflation. A sharp escalation in geopolitical issues will, of course, change our view.”
Richard Troue
Fund Manager, Hargreaves Lansdown Fund Managers. Based in: Bristol, UK
“The portfolio’s total return funds held up well during February. During turbulent times, these f equity and bonds markets, plus exposure to other asse ts such as gold and cash, can look dull at times. But, in an uncertain world, they prove their worth when markets fall. The best total return managers will also retain some flexibility and rotate between assets as valuations look attractive. The key to building long-term wealth and financial security is to not undo your hard-won gains from rising markets when conditions change. An allocation to well-run total return funds can help in this regard.”
Paul Hookway,
Senior Fund Analyst, Kleinwort Hambros. Based in: London, UK
“The month started focusing on inflation and ended with a geopolitical conflict. We made changes at the beginning of the month, reducing Japan and emerging market exposure, adding to the UK. We also shifted the bias towards large caps using a FTSE 100 tracker to increase our energy exposure in particular. In the end, we reduced our equity allocation by 5 per cent to 60 per cent. We removed completely the Japanese allocation and further reduced the emerging market positioning. Of the proceeds, 2 per cent were added to cash and 3 per cent to a broad commodity exposure, which we see as a beneficiary of current inflationary pressures.”
Antti Saari
Chief Investment Strategist, Nordea investments. Based in: Copenhagen, Denmark
“Market sentiment has been shaky as fears have lingered on through February. Concern over how the Federal Reserve will manage to fight inflation and the war in Ukraine have been driving the worry in the market lately. But beneath the headlines, the fundamental backdrop for growth remains solid. Corporate profits have kept climbing, another strong earnings season is coming to an end and economic forecasts continue to point to brisk growth this year. Moreover, equity valuations have become increasingly attractive compared to bonds and investor sentiment has turned decidedly sour. This combination tends to bode well for equity-market returns. Hence, we stick to our current equity overweight.”
Marco Pabst
Chief Investment Officer London at Union Bancaire Privée (UBP). Based in: London, UK
“Markets started the month solidly only to find themselves in a difficult spot following Russia’s military action in Ukraine. Equities sold off and credit markets underperformed as credit spreads rose across the board. The portfolio’s performance in February was in line with benchmarks, but we sold the Vontobel EM debt fund due to the uncertain outlook for the asset class. The current escalation in geopolitical tension is positive for commodities and inflation, but probably negative for the broader economy with a slowdown to be expected. It is also likely to delay hawkish central bank policies by several months, which is constructive for quality growth stocks.”
