Giovanni Becchere
Head of Multi-Assets, ABN AMRO Investment Solutions. Based in: Paris, France
“The latest eruption in the US/China trade dispute throws a wrench into what had been a moderately positive scenario developing for the second half of the year. But we continue to expect that global growth will increase slightly in the second half of the year and so retain the existing asset allocation. Within the equity portfolio we increase the exposure to US at the expense of emerging markets. With continued low unemployment levels, we expect the US consumer to remain an important support for the economy. The US is also less dependent on international trade.”
Luca Dal Mas
Senior fund analyst, Aviva Investors. Based in: London, UK
“The break down in trade negotiations between the US and China had a negative impact on risk assets in May, with US PMI data failing to brighten the economic picture. The European elections resulted in a more fragmented parliament, but no change in the balance between mainstream and nationalist parties. Following the escalation in tensions, we trimmed exposure to emerging markets. We further diversified our alternative bucket, adding BlackRock European Absolute Alpha, a market neutral strategy that has a good track record in volatile periods.”
Kelly Prior
Investment Manager in the Multi-manager team, BMO Global Asset Management. Based in: London, UK
“Political tensions, and in particular the US/China trade war saga bough a sobering end to the positive market run with Asia and emerging markets leading the falls. Currencies were exceptionally volatile with the yen surging as a perceived safe haven while sterling tumbled. The Crux European Special Situations fund has been replaced by the Hermes European ex UK fund in the model. Quality growth continues to dominate what is working in markets, we feel a rotation into value is long overdue from here but timing remains as difficult as ever.”
Silvia Tenconi
Multimanager Investments & Unit Linked, Eurizon Capital SGR. Based in: Milan, Italy
“In May the performance of the portfolio was negative. Equity markets fell, and all our funds had negative returns. Our position in Eurizon Treasury T1 and in Eurizon Absolute High Yield limited the drawdown. Our European and US equity funds performed better than their markets, while our Japanese, global, emerging and Asian funds underperformed. The market is clearly disappointed with the outcome of the trade talks between US and China, and weak macro data does not help sentiment. We stay put for the moment, waiting for more clarity on both fronts.”
Jean-Marie Piriou
Head of quantitative analysis, FundQuest Advisor, BNP Paribas Group. Based in: Paris, France
“Global equities fell sharply in May, affected by tensions between China and the US. Trade war risks will probably continue to dominate world headlines for this year. We expect those tensions to impact emerging markets more significantly. Thus, we decided to reduce our exposure to emerging market equities in favour of US growth equities, which should benefit from fly to quality effect and the current favourable economic environment.”
Lee Gardhouse
Chief Investment Officer, Hargreaves Lansdown Fund Managers. Based in: Bristol, UK
“When do you stop adding more funds to your portfolio? I think it’s when you feel that you are making your portfolio worse rather than better. Diversification or asset types and manager investment styles is critical in building a portfolio because it means that your portfolio is never all positioned in one direction. The truth is that we don’t know which of our managers will go on to perform the best and this is why we diversify.”
Note: The Woodford Equity Income holding has been replaced by Artemis Income
Bernard Aybran
CIO Multi-management, Invesco. Based in: Paris, France
“There have been a few switches in the portfolio. On the fixed income side, one fund has been trimmed as its diversification out of the bond universe is repeatedly failing to add value. The proceeds have been re-allocated onto a fund focused on the fixed income universe, albeit in quite a flexible way. In equities, the switch has been done on an asset allocation rationale, out of the emerging universe into a defensive global developed markets ETF. Overall, actively managed funds mostly outperformed their relevant benchmarks over recent periods.”
Paul Hookway,
Senior Fund Analyst, Kleinwort Hambros. Based in: London, UK
“We continued to increase our exposure in the faster growing Japanese equity investments, selling the holding of GLG Japan Core Alpha adding the proceeds to Baillie Gifford Japanese. The big debate since we increased our cash holding in January has been how and when we deploy this. We decided not to increase the equity allocation as the likelihood of a market downturn in the short-term was rising; we were proved correct by month end. Instead we added to fixed income, purchasing Lyxor Core FTSE Actuaries UK Gilts ETF and reducing cash.”
Lea Vaisalo
Chief Portfolio Manager, Nordea investments. Based in: Copenhagen, Denmark
“May marked a pullback for risky assets, especially equities. The heated US-China dispute quickly turned into negative sentiment marking a more risk-off stance. However, economic data continues to point to a stabilisation and we keep our neutral recommendation between equities and fixed income. We also keep the overweight in European equities versus an underweight in Japan and stick to the defensive stance in sectors. Within fixed income and credit, we stick to a small overweight in high yield bonds versus government bonds.”
