Giovanni Becchere
Head of Multi-Assets, ABN AMRO Investment Solutions. Based in: Paris, France
“Although we do not foresee a recession, we acknowledge that the economic momentum is deteriorating. PMI indices in the US, Europe and China have recently been signaling that economic activity is weakening. With the world economy shifting into a lower gear in 2019, company earnings will also show a deceleration. Also, given political uncertainty from an unclear Brexit outcome and a difficult relationship between political parties in the US, the risk/reward for being overweight has weakened. We therefore decided to scale back our equity exposure.”
Luca Dal Mas
Senior fund analyst, Aviva Investors. Based in: London, UK
“The year started with a strong rally in risk assets. The key drivers continue to be linked to potential changes in the Fed’s policy, the stimulus that China is rolling out and hopes for a trade resolution between China and the US. In Europe, activity is stagnating and ECB forecasters have revised down their growth and inflation expectations. We take partial profit in European equities and reallocate the proceeds to investment grade bonds. Spreads have widened and now look attractive, while the duration element should allow us to better deal with risk off periods.”
Kelly Prior
Investment Manager in the Multi-manager team, BMO Global Asset Management. Based in: London, UK
“Positive economic numbers from the US reversed the dramatic risk-off moves of December with markets performing a stunning U-turn in January. Leading the pack were the higher beta areas of emerging markets and Asia though all areas gained ground. The best performer was the Majedie Asset UK Focus fund. The CC Asian Focus fund was the worst as the strong run in the far east was not captured by mid and smaller capitalised companies where the fund invests. It has been a spectacular start to the year, and we expect more volatility from here.”
Silvia Tenconi
Multimanager Investments & Unit Linked, Eurizon Capital SGR. Based in: Milan, Italy
“In January, the portfolio regained more than it had lost in December. There were no negative contributors. The biggest contributors were Vanguard US Opportunities and M&G Global Dividend.
The market renewed its faith in risky assets, given that the Fed adopted a more dovish tone in 2019 than in 2018, calming fears that its actions would kill the cycle. We are positive on equities and still hold no meaningful duration or credit exposure, but that may change in the coming months, due to the widening of spreads and the rise in interest rates.”
Jean-Marie Piriou
Head of quantitative analysis, FundQuest Advisor, BNP Paribas Group. Based in: Paris, France
“After the rebound of equity markets over the past month, backed by a slightly increased investor risk appetite and a more dovish Fed stance, we took profits on European equities to increase our exposure to emerging markets. In this higher volatility environment, we trimmed the fixed income bucket in favour of alternative investments by introducing Franklin Templeton K2 Alternative Strategies. The exposure to Pimco Diversified Income has been reduced to reinforce Barings Emerging Markets Local Debt fund.”
Lee Gardhouse
Chief Investment Officer, Hargreaves Lansdown Fund Managers. Based in: Bristol, UK
“I don’t know about you but I am feeling rather more bullish about the prospects of tying money up in equities and bonds today than I have for some time. Yields in bonds are a bit more attractive than they were and a combination of profit growth and share price falls have made global markets more attractive also. Sadly official statistics tell us that private investors are not interested. Why is it that people are capable of making dispassionate investment decisions in everyday life but when it comes to saving for their futures sentiment gets the better of them?”
Bernard Aybran
CIO Multi-management, Invesco. Based in: Paris, France
“The portfolio retained an unchanged asset allocation in January. We made a couple of changes in the fixed income part of the portfolio, solely on the back of an asset allocation decision, in favour of emerging debt. As far as the merits of the underlying funds, January has been positive for most major markets and asset classes. Still, on the equity side, the small and mid-caps came back in favour, after a torrid last quarter 2018. Equally, the style biases made quite a lot of difference between stock pickers making it key to closely follow each fund’s style.”
Paul Hookway
Senior Fund Analyst, Kleinwort Hambros. Based in: London, UK
“The late December rally continued into January, providing relief for investors. We remain happy with our overall equity allocation, despite seeing attractive valuations after the sell-off in the fourth quarter. The only change we have made is to switch the iShares S&P 500 ETF into a GBP hedged version.It is our view that sterling may rally if there is any good news over Brexit, you can argue the probability, but we felt it prudent to limit its effects if it occurs!”
Lea Vaisalo
Chief Portfolio Manager, Nordea investments. Based in: Copenhagen, Denmark
“Overall we keep equities neutral. Within equities, we increased European equities and on the sector side, with a more risky environment we go more defensive. We lowered IT to neutral and raised healthcare, which looks the most attractive among the defensive sectors. January was very strong for risky bonds. More cautious comments from the Fed concerning future monetary policy improved investor sentiment markedly. We therefore also keep bonds neutral versus equities and recommend an overweight in government bonds and to underweight high-yield.”
