Giovanni Becchere
Head of Multi-Assets, ABN AMRO Investment Solutions. Based in: Paris, France
“Evidence shows that a global recovery is underway and economic growth is rebounding. If there is a speed bump on the road to recovery, it is inflation expectations. The threat of rising inflation has been fuelled by volatile data, supply bottlenecks and, in the US, the rapid pace of recovery. Our view is that the recent upticks in inflation will be temporary and central banks will keep the situation under control. In this context, we continue to overweight equities versus fixed income. In our manager selection we prefer to keep a neutral stance on value/growth allocations, due to high volatility as well as noisy factors like inflation, the speed of the recovery and long-term yields. In terms of regional exposure, given the early dynamic of a new cycle, we increase emerging equities at the expense of US equities.”
Luca Dal Mas
Senior fund analyst, Aviva Investors. Based in: London, UK
“While we have experienced a significant inflation increase, central bank monetary policy remains dovish in the belief that this is just a temporary effect driven by the re-opening of economies. The new waves of virus infections, driven by the increasingly dominant delta variant, have had very little impact on equity markets so far. Equities markets continue to drift upwards. Economic activity is also rebounding strongly, and the recovery is becoming more broad-based, with expectations of strong GDP readings in the second and third quarter. In portfolios we have added to gold after the strong dollar rally, a position that could benefit from reflation expectations but also increased policy uncertainty.”
Kelly Prior
Investment Manager in the Multi-manager team, BMO Global Asset Management. Based in: London, UK
“The month bought with it confirmation of a second month of above consensus inflation in the US, but also the first inklings of action from the Federal Reserve, all of which culminated in some big swings in markets towards the latter days of June. The US led the late month run in risk assets which saw most equity markets gain ground. The TT Emerging Markets Unconstrained Fund led the selection, while the value-driven Magellanes Value Investors European Equity Fund was the laggard, losing ground as growth stocks took the baton once more. The summer months often bring volatility – with an uncertain outlook the opportunity set looks wide open for active manager to exploit.”
Javier Estrada
Chief Investment Officer, Private Banking, CaixaBank. Based in: Madrid, Spain
“We stuck with our asset allocation after taking same chips off the table last month. Half of our portfolio is currently in equities and the rest split between fixed income and alternatives. Fixed income strategy is focused on low duration, flexible strategies and in expanding the investment universe. Alternative’s role continues to be significant in our portfolio, performing well and with lower volatility. On the equity side we are biased in favour of Europe versus Asia and North America. Value investing is also clearly favored. Healthcare, climate change and consumer discretionary are our main sector exposures.”
Silvia Tenconi
Multimanager Investments & Unit Linked, Eurizon Capital SGR. Based in: Milan, Italy
“In June, the performance of the portfolio was positive, with Wellington US Research and Vanguard US Opportunities being the biggest contributors. The only detractors were Ninety One European Equity and Invesco Pan European Equity. Our mild posture towards value didn’t pay off this month, as technology lead again and financials lagged. There is an unremitting sector rotation going on, with no clear winners for the time being. Emerging markets still look unattractive, so we keep our overall equity allocation unchanged; we have some spread exposure and almost no duration.”
Richard Troue
Fund Manager, Hargreaves Lansdown Fund Managers. Based in: Bristol, UK
“The past few weeks have seen growth stocks stage a resurgence following several months on the back burner while value stocks marched ahead. This has upended the portfolio, with funds like Rathbone Global Opportunities and Findlay Park American back at the top, and JOHCM UK Equity Income back at the bottom. It strikes me that with a lot of uncertainty over the path through the pandemic, and with markets having made good gains over the past few months, we might well see more seesawing like this as the year goes on. I think a balanced equity portfolio, plus some defensive total return and fixed interest investments, will serve investors well should this be the case.”
Paul Hookway,
Senior Fund Analyst, Kleinwort Hambros. Based in: London, UK
“We again paused in June, with no changes to the portfolio, though we were not idle! It is increasingly obvious, in our opinion, that
bonds are unlikely to offer diversification should equity markets sell off. To fill this gap, we have been looking for an alternative to help offset this issue. We are in the final stages of putting together a structured note, using a spread of put options and long exposure on the S&P 500. It will add value if the S&P 500 falls significantly, giving us some badly needed downside protection. This is likely to be traded in July.”
Antti Saari
Chief Investment Strategist, Nordea investments. Based in: Copenhagen, Denmark
“The consumption rebound has boosted global growth, but it isn’t only about consumers; companies are also looking to spend. But with high economic activity and huge amounts of stimulus come the fear of rising inflation and central bankers are once again set to take centre stage. In particular, the Federal Reserve in the US has started to signal an earlier-than-expected tightening in monetary policy. This normally puts emerging market assets on a back foot, which, combined with the tightening economic policy and regulation in China leads us to reduce allocations in both emerging market bonds and equities, leaving the former neutral and latter underweight. We raise both European equities and European Investment Grade bonds to overweight and given the firm economic outlook stick to our overweight in equites versus bonds.”
Marco Pabst
Chief Investment Officer London at Union Bancaire Privée (UBP). Based in: London, UK
Equity markets performed well in June despite the increasing debate about the potential tapering of asset purchases in the US and the risk of rising interest rates in 2022 and beyond. However, the pressure on stocks proved to be temporary and bond markets reacted positively with a rise, as they priced in the prospect of slowing growth and lower inflationary pressures. The portfolio did well as a result, gaining more than 1.4 per cent and matching equity market returns. Its value exposure did particularly well, with the Vulcan Value fund gaining more than 6 per cent, and the large-cap quality exposure was positive too, with the UBAM - 30 Global Leaders Equity fund posting +4.3 per cent and the MS Global Brands fund +2.6per cent.”
