Giovanni Becchere
Head of Multi-Assets, ABN AMRO Investment Solutions. Based in: Paris, France
“A number of pros and cons are affecting the investment climate. The most significant positive has been a shift among central banks to a more accommodative stance. Yet business sentiment has weakened significantly, due to the trade war reescalation which triggered a wave of sales in global equities. We decide to stick to the current allocation. Our scenario is that the recession will eventually be avoided and risk premia will continue to tighten. At the same time we take advantage from our exposure to gold, following its rally since we added to the portfolio in April.”
Luca Dal Mas
Senior fund analyst, Aviva Investors. Based in: London, UK
“The past month saw a fair amount of volatility driven by geopolitics, earnings releases, data and announcements from policymakers. Growing tensions with Iran and lack of progress in the US-China trade tensions have kept equity markets in check. US margins are expected to decline year-on-year this quarter for the second in a row. Mixed hard economic data in Europe and the US, together with dovish policymakers’ speeches, have reinforced investors’ expectations of rate cuts. The US dollar has been the main winner, while sterling continues to weaken.”
Kelly Prior
Investment Manager in the Multi-manager team, BMO Global Asset Management. Based in: London, UK
“The hope of a reduction in US interest rates drove markets in July, though the post-cut massaging from the Fed dampened sentiment after the event. The heightened potential for a ‘no-deal’ Brexit weighed heavily on sterling, though the euro also weakened as Mario Draghi announced further monetary stimulus. The US was the strongest equity market, with the Artemis US Extended Alpha fund the best performer of the selection. August is traditionally a month of thin volumes, which brings potentially exaggerated moves. Caveat emptor.”
Silvia Tenconi
Multimanager Investments & Unit Linked, Eurizon Capital SGR. Based in: Milan, Italy
“In July, performance was positive. Best contributors were Vanguard US Opportunities, Vontobel US Equity, Wellington US Research and Robeco US Select Opportunities. Markets waited for central banks to deliver either rate cuts or easing messages. Macro data hinted at no cyclical upturn even though the earnings’ season was better than expected. We remain cautious and wait for more clarity on trade war and macro developments as summer low liquidity could drive volatility up and hurt performance, were markets to be scared by uninspiring news.”
Jean-Marie Piriou
Head of quantitative analysis, FundQuest Advisor, BNP Paribas Group. Based in: Paris, France
“Equities continued climbing in July until the recent renewal of tensions between the Trump administration and China. On the other hand, central banks’ dovish policies and forecasted global moderate growth remain supportive. The current balanced portfolio positioning is designed to face this unstable market environment. Thus, we decided to keep the allocation unchanged.”
Lee Gardhouse
Chief Investment Officer, Hargreaves Lansdown Fund Managers. Based in: Bristol, UK
“$14trn of bonds across the globe have negative yields. I couldn’t quite believe it when I heard it. It essentially means investors are paying to lend money to governments and companies. But even when things hit rock bottom, it doesn’t mean they can’t fall further. Interest rates look likely to stay lower for longer, which could support bond markets and keep yields down. I prefer managers who have the flexibility to hunt for yield across the whole market, or are taking shelter from potential setbacks with some firepower on the sidelines to use when there’s more value on offer.”
Bernard Aybran
CIO Multi-management, Invesco. Based in: Paris, France
“The equity part of the portfolio has had a couple of changes on an asset allocation basis, as emerging markets were caught in the latest developments of the trade war. The fixed income investments have been changed on a more fund specific basis, as the two main portfolio managers of one important holding have left the firm, replaced by a brand new team. The proceeds have been reinvested in a more systematic, less discretionarily managed, bond portfolio. The overall shape of the portfolio has been retained as all other funds have been behaving as expected.”
Paul Hookway,
Senior Fund Analyst, Kleinwort Hambros. Based in: London, UK
“The portfolio has a modest bias towards growth focused over valuation sensitive strategies, which has benefited it in recent years. The extreme underperformance of value vs growth in 2019 impacted the performance of Hermes Asia ex-Japan and JOHCM Continental European, though strength elsewhere offset this. The difference between the most expensive and the cheapest stocks has not been this extreme since the dotcom bubble in 2000. In our opinion, the probability of a reversal is rising. No changes were made to the portfolio, but this line of thought will continue.”
Lea Vaisalo
Chief Portfolio Manager, Nordea investments. Based in: Copenhagen, Denmark
“Early summer saw a strong run for risky assets. Central banks, which have been centre stage for quite some time, drove markets higher with pledges of further support. It is time for them to deliver as a lot probably has been priced in. We keep our neutral recommendation between equities and fixed income. We prefer European equities at current valuation levels and keep the defensive stance in the sector strategy overweighting consumer staples at the expense of IT. Within fixed income, we prefer credit risk to duration and keep the slight in high yield versus government bonds.”
