Benjamin Hamidi
Senior portfolio manager, ABN AMRO Investment Solutions. Based in: Paris, France
“Many companies revised their financial performance downward as Chinese lockdowns and supply chain disruptions in addition of higher energy cost put pressure on margins. Excluding the shock of war and the impact of higher energy and food prices, the medium- and long-term outlook for demand remain positive. Households still have record excess savings and cash. Pent-up demand could power gains in consumption. More government spending, business investment and inventory rebuilding should also add to that, once supply shortages ease later in 2022. Consequently, for the time being, we decide to maintain the current positioning.”
Luca Dal Mas
Senior fund analyst, Aviva Investors. Based in: London, UK
“As the war in Ukraine continues, the IMF revised down its growth forecasts and inflation rates are expected to be higher for longer. While the US and Europe are still set to grow well above potential in 2022, China is now well below its announced goal. Any escalation in the war, additional energy sanctions or debt distress due to rate rises could further dampen the post Covid economic recovery. Equity markets had apparently found their footing in March, with strong gains to close the negative quarter, but steadily lost ground in April. The surge in yields punished emerging markets and tech stocks in particular.”
Kelly Prior
Investment Manager in the Multi-manager team, BMO Global Asset Management. Based in: London, UK
“There was little to alter the tone in market in April, with no change in narrative on the war in Ukraine, inflation or the outlook for central bank policy. The earnings season failed to offer a unanimous picture resulting in welcome differentiation at the stock level within markets. The UK market scraped a positive return, but otherwise it was a negative month. The release valve seemed to come in the form of currencies, the dollar surging, while the yen floundered. In a repeat of last month, the Findlay Park American fund led the performance table, with the Berenberg European Small Cap the laggard. We remain in the epicentre of a transformation in the economic environment.”
Jorge Velasco
Director of Investment Strategy, CaixaBank Private Banking. Based in: Madrid, Spain
“We keep our underweight in equities unchanged this month, thus maintaining our vision of strategic prudence in portfolio construction. There were no changes in the composition of the fixed-income portfolio, where we remain very defensive, especially in terms of interest rate risk exposure. In equities, we reduced exposure to Japan and replaced a global equity fund with a value bias with an index fund, thus continuing to lose some of the investment biases we have maintained over the last few months.”
Silvia Tenconi
Multimanager Investments & Unit Linked, Eurizon Capital SGR. Based in: Milan, Italy
“In April the performance of the portfolio was negative. US equity markets took a plunge, concerned by the Fed’s hawkish tones, while Europe, Asia and Japan held up a bit better. Credit was down as well, as spreads widened almost everywhere. The only positive contributors for the month were Janus Henderson Pan European Fund, JPMorgan US Value and Invesco Asian Equity. We keep our allocation unchanged: we’re closely monitoring interest rates, as there might be overshooting there at some point, and we’re following the evolution of the Russia-Ukraine conflict.”
Richard Troue
Fund Manager, Hargreaves Lansdown Fund Managers. Based in: Bristol, UK
“This month I’ve reduced the investment in Royal London Sterling Extra Yield Bond. It has held up well in a weak market recently. Its long-term performance is excellent, but it can be hit hard when confidence collapses. I’ve added the small and flexible Artemis Corporate Bond, run by two first-class managers, Stephen Snowden and Grace Li. Yields on sterling corporate bonds recently hit 3.5 per cent. Who knows whether inflation will persist and yields will climb further, or if bonds will rally because expectations for rate raises have gone too far; all I would suggest is that after a strong run for Royal London and a little more value on offer in sterling corporate bonds, a modest rotation seems prudent.”
Paul Hookway,
Senior Fund Analyst, Kleinwort Hambros. Based in: London, UK
“Rates have risen on both sides on the Atlantic; US ten-year yields are at 3 per cent and the Ukrainian conflict is still ragging, with no end in sight. Inflation remains high, with no signs of abating, and the cost of living in the UK is one of the biggest issues of the day. We made no changes to the portfolio. Fixed income has priced in many of the changes, reducing the need for action and we reduced equities to neutral recently. However, we are not inactive; should we need to act quickly we will do so.”
Antti Saari
Chief Investment Strategist, Nordea investments. Based in: Copenhagen, Denmark
“Equity markets were wobbly in April as continued high inflation and a further hawkish repricing of policy rates lifted longer-dated yields. The earnings season is now on the way, and so far confirms that analysts’ estimates remain too conservative. This provides a solid foundation for further rises in equities later in the year. We view the outlook for growth, earnings and interest rates as favouring equities versus bonds in the medium term and continue to recommend a 5 per cent overweight. We keep North American equities overweight versus Europe as a hedge that we believe will play out should the outlook deteriorate more than we expect.”
Marco Pabst
Chief Investment Officer London at Union Bancaire Privée (UBP). Based in: London, UK
“April was a challenging month for investors as equity markets made substantial losses. To make matters worse, fixed income also performed poorly, weighed on by inflationary concerns and hawkish central bank rhetoric. For the first time in decades, equities and bonds have been declining together over the last four months, providing no diversification effects for investors. The portfolio posted a relatively strong performance, far ahead of its benchmarks due to reduced exposure to markets and a more defensive allocation across the board. We have made no changes as we expect volatility to continue for some time.”
