Fund selection - February 2021
Giovanni Becchere
Head of Multi-Assets, ABN AMRO Investment Solutions. Based in: Paris, France
“While fourth quarter earnings for 2020 may be weaker than hoped, we expect the economic recovery in the second quarter will feed positive earnings momentum through 2021. In terms of strategy selection we replace the Alger American Asset Growth with AAF Alger US Equities. These two funds are managed by the same team, according to a similar strategy. However, the latter is concentrated on the stronger convictions of the portfolio manager, limiting the holdings to maximum 50 names and so aiming for higher alpha generation.”
Luca Dal Mas
Senior fund analyst, Aviva Investors. Based in: London, UK
“January saw a violent mob storming Capitol Hill in a protest against the US presidential elections results. After the transition, the Biden Administration wasted no time in repealing and replacing many executive orders of the previous administration. Marketwise, this increased pressures on US yields. In portfolios we have switched some emerging market exposure into US equities after the strong outperformance. We have also trimmed our high yield and investment grade allocation given tighter spreads.”
Kelly Prior
Investment Manager in the Multi-manager team, BMO Global Asset Management. Based in: London, UK
“The year started with a joyous tone, thanks to January’s positive news flow that followed. However, a surge in Covid variants and cases, alongside some extraordinary volatility at the stock level bought about by retail investors playing the technical side of the derivatives market, resulted in muted returns overall for January. The market-neutral Merian UK Specialist Equity was the worst performer of the selection, thanks to its more technical make up with the TT Emerging Markets Unconstrained being the best performer.”
Javier Estrada
Chief Investment Officer, Private Banking, CaixaBank. Based in: Madrid, Spain
“We start 2021 with a balanced portfolio between equities, fixed income and alternatives. In fixed income, we favour short and flexible strategies over long durations. On the equity side, our portfolio is biased toward cyclicality, value and small caps. We maintain a significant overweight in Europe and Asia. Materials, Industrials and climate are our preferred sectors. We keep a substantial presence in ESG strategies, both equity and fixed income. In the alternative space, we favour decorrelation and low-volatility strategies.”
Gayathri Devarakonda
Fund Research Analyst, Deutsche Bank Wealth Management. Based in: London, UK
“Global equity markets, mostly developed markets, gave up most of their gains as January came to a close. On the fixed income side, sovereign bonds across various countries, including US treasuries, fell back in the month. January was a good month for oil with both BRENT and WTI registering strong gains. At the portfolio level strong performance by EM equities and investment grade made up for the negative performance by other components. We made no changes to the portfolio.”
Silvia Tenconi
Multimanager Investments & Unit Linked, Eurizon Capital SGR. Based in: Milan, Italy
“In January the performance of the portfolio was positive, with Vanguard US Opportunities, JPMorgan Emerging Markets Opportunities and Fisher Emerging Markets being the biggest contributors. The only detractors were the European equity funds, where uncertainty around the vaccination campaign is heightening volatility. Yet, in the US things are getting better on the Covid front and economic activity is strong. Things are improving in the world as a whole and we keep our allocation to equities and high-yield bonds unchanged.”
Richard Troue
Fund Manager, Hargreaves Lansdown Fund Managers. Based in: Bristol, UK
“This month I’ve added Troy Trojan Global Income to the portfolio. Performance has been good and the past year showed it has the potential to perform quite differently during tough times. A relatively dull period of performance during the market recovery in the second half of 2020 provides a good time to add it. To make way I’ve reduced UK equity income exposure a little as the Trojan fund provide some diversification here. I’ve also reduced exposure to the dedicated European and Japanese funds in the portfolio.”
Paul Hookway,
Senior Fund Analyst, Kleinwort Hambros. Based in: London, UK
“Seeing the decline in Covid-19 infections and acceleration of the vaccine rollout, we increased our equity exposure, reducing fixed income to finance. We added a holding of Jupiter European Growth and increased the Federated Hermes Asia Ex-Japan position. We also reduced our US exposure by 5 per cent, to add a new holding of Pictet Global Environmental Opportunities. As the world increasingly focuses on climate-related issues, we see huge opportunities for companies offering solutions in this area, making it attractive for our clients to gain exposure, too.”
Antti Saari
Chief Investment Strategist, Nordea investments. Based in: Copenhagen, Denmark
“We continue to see the environment as broadly favourable for risk-taking. Economic data is set to improve further into the year, while Q1 is likely to be slightly less upbeat. We think the markets are more attuned to the recovery after rather than any short-term noise, and seem to take vaccine-related uncertainties in their stride. Moreover, in our view, the earnings outlook for 2021 and 2022 is still underestimated to the tune of 5 – 10 per cent, meaning that valuations look higher than they really are. This keeps us confident in recommending an overweight for equities.”
