Giovanni Becchere
Head of Multi-Assets, ABN AMRO Investment Solutions. Based in: Paris, France
“Despite the risk of a correction in the short term, strong fundamentals continue to support equity markets and justify a higher allocation to equities over the longer term. These fundamentals include low interest rates, accommodative central banks and significant amounts of stimulus for consumers and businesses, which, in turn, have a positive effect on company earnings. While equities are, in general, no longer cheap, equity markets continue to attract inflows, given that there are few alternatives for return-seeking investors. Moreover, in comparison to bonds, equities are less expensive than historically has been the case. In this context, we keep our portfolios unchanged with a clear preference for stocks versus bonds, and an exposure to Euro Corporate and to Emerging Debt, within the fixed-income bucket.”
Luca Dal Mas
Senior fund analyst, Aviva Investors. Based in: London, UK
“US bond yields remained stable in April. This supported equity markets that delivered positive performance, with the US leading other regions. April’s economic data were in line or above expectations — in the US, manufacturing activity rose to the highest level since 2007. Services indicators were also supportive, helped by reopening of activities and vaccines rollout. European data also improved, with the service sector bottoming out after eight consecutive months. With the acceleration of the vaccination campaign, the gap between the services and manufacturing sector should narrow further. We have rebalanced our portfolios towards our strategic asset allocation target, reducing Japanese equities and high yield in favour of higher exposure to Asian markets.”
Kelly Prior
Investment Manager in the Multi-manager team, BMO Global Asset Management. Based in: London, UK
“A continuation of the supportive talk from central banks, coupled with steady progress in developed markets, helped equities in associated markets make decent progress last month. The Findlay Park American fund lead the selection, reflecting the fortunes of the US. Conversely, the dramatic rise in cases in emerging markets weighed on sentiment in these areas, though it was Japanese equities that fared the worst, with the Morant Wright Japan fund being the worst performer of the selection in the month. Bond markets traded in a reasonably muted fashion compared to recent times — with little compensation being demanded for inflation or default. The next few months are likely to see positive economic data, but it remains to be seen how much of this is already factored into market levels.”
Javier Estrada
Chief Investment Officer, Private Banking, CaixaBank. Based in: Madrid, Spain
“Our asset classes remain unchanged this month, as equity continues to perform, and alternatives provide returns. In fixed income, as anticipated last month, we are reducing exposure in emerging markets local currency as it did not evolve as expected. We add weight in Axa Global strategic bonds, looking to increase flexible strategies in fixed income. On the equity side, weighting between Asia, North America and Europe continue to be similar. Cyclicals and value remain overweight positions in the portfolio and we keep our exposure to small caps stock. Climate change, industrial technology and infrastructure are well represented in our portfolio, and we are looking to add consumer-led strategies.”
Silvia Tenconi
Multimanager Investments & Unit Linked, Eurizon Capital SGR. Based in: Milan, Italy
“In April the performance of the portfolio was positive, with Allianz Europe Equity Growth and Wellington US Research being the biggest contributors. The earnings season in US is playing out better than expected and markets have already discounted much of the good news. Interest rates in the US seem to have found a plateau, yet the value rotation is still going on, if at a slower pace. Our view on the recovery is still positive, even if vaccine rollout is lagging behind in many emerging markets, with India experiencing a spiralling contagion.”
Richard Troue
Fund Manager, Hargreaves Lansdown Fund Managers. Based in: Bristol, UK
“A year ago, prospects for the UK’s smaller companies didn’t look good. The economy was shut down, leaving many fearful for their future. Yet here we are, a year later, and the FTSE Small Cap index (excluding investment trusts) has grown by about 70 per cent. Marlborough UK Micro-Cap Growth, held in this portfolio, has done even better. Today, the outlook is rosier, so where next? More gains ahead, or is the best behind us? I haven’t a clue, in the short-term at least. But if you back high-calibre managers with a proven record of picking out the most promising businesses, I think they’ll see you through the tough times and deliver excellent long-term returns. As ever, it’s sensible to rebalance after a period of particularly good (or poor) returns.”
Paul Hookway,
Senior Fund Analyst, Kleinwort Hambros. Based in: London, UK
“April saw no changes to the portfolio, though we were not idle. So far in 2021, value has outperformed growth, with moves at the start of May further confirming this trend. The markets view on inflation and whether this will generate rate rises later in the year is key. In our opinion it’s impossible to call currently. We reviewed the portfolio’s growth bias, which has added value over recent years, to determine the best way to increase its value exposure, moving the portfolio to a more neutral positioning. This will help the portfolio navigate uncertain markets until we have clarity on their direction.”
Antti Saari
Chief Investment Strategist, Nordea investments. Based in: Copenhagen, Denmark
“2021 has been a very strong year for equities so far and investors can look back at returns that normally materialise in an average (full) investment year. On the one hand, rising rates mean that especially safe bonds have had one of the worst starts to the year in decades; but on the other hand, there is now slightly more value. This, however, is not enough in our view to tip the scales in terms of the relative valuation of equities versus bonds, and particularly not in the current improving growth and earnings environment. Interestingly, despite the strong rally from the lows in March 2020, global forward-looking equity-market valuation metrics are exactly where they were at the start of June last year. Thus, the stellar returns from then have come due to the surprisingly strong and continuous improvements in the earnings outlook, rather than ever-frothier valuations and overheating markets. Put together, we keep the equity overweight, but expect a more moderate pace of returns going forward.”
Marco Pabst
Chief Investment Officer London at Union Bancaire Privée (UBP). Based in: London, UK
“Leading indicators are at record levels. After a very strong market performance, with seasonal factors moving into the rear-view mirror, we would expect some moderation in the momentum in the short term. For the medium term, earnings revisions and gross domestic product recovery remain strong enough to sustain a continued bullish stance on risk markets. The focus is on quality large-cap companies with a focus on recovery plays.”
