Giovanni Becchere
Head of Multi-Assets, ABN AMRO Investment Solutions. Based in: Paris, France
“Although we are in a late-cycle environment with moderate earnings growth, equity valuations are fair and stocks are relatively attractive compared to bonds or cash, with lower for longer interest rates also likely to support valuations. Global risk conditions have improved and central banks have shown that they are reactive in avoiding a potential worsening of global slowdown. In this context we increase the allocation to equity by investing in emerging markets, as we consider that this area offers better relative valuations when compared to developed market. We add to our portfolio the AAF Numeric Emerging Equities. This fund invests across all market capitalisations through a pure quantitative and systematic investment process based on fundamental and causal markets relationships across all strategies.”
Luca Dal Mas
Senior fund analyst, Aviva Investors. Based in: London, UK
“October was a good month for equity and credit markets globally while US government bonds yields moved closer to mid-September levels and German Bund yields continued in their rising trajectory. These risk-on, risk-off mood-swings have dominated investor sentiment over the last six months, with investors receiving conflicting signals from a weak manufacturing sector on one side and slightly better news on trade agreements on the other. In this environment we continue to expect global central banks to remain in relaxed and dovish mood for the rest of this year and probably throughout 2020 as well. Given the tighter credit spreads we have decided to take some profit and marginally reduce exposure in our portfolios.”
Kelly Prior
Investment Manager in the Multi-manager team, BMO Global Asset Management. Based in: London, UK
“Markets made positive ground in a month that saw the US Federal Reserve cut interest rates as expected, with the Bank of Japan and ECB also voicing continued accommodative stance for markets. Currencies were a significant factor in the month with the dollar and yen losing more than 2 per cent in value relative to the euro, while sterling gained over 2.5 per cent. A no-deal Brexit was seemingly avoided with an agreement reached between the UK and EU and a US-China trade deal looking to have made potential progress. The euro-denominated Eastspring Japan Dynamic fund was the best performer of the selection, while the dollar-denominated Findlay Park American fund was the worst. Earnings season in the US has surprised on the upside, and economic numbers have moderated. As we move to the twilight months of the calendar, we expect an increase in gyrations within markets from here.”
Ian Crispo
Head of fund selection, Deutsche Bank Wealth Management. Based in: London, UK
“The portfolio fared well over the month and no changes were done to our allocation. The equity book was particularly additive across the board, with our emerging markets manager leading the way. The fixed income book remained flatish, while our systematic macro manager suffered on the back of positioning. We continue to be cautious overall, however feel some of the risks hanging over markets have somewhat abated. Therefore we will be closing some of our equity underweight in the coming days.”
Silvia Tenconi
Multimanager Investments & Unit Linked, Eurizon Capital SGR. Based in: Milan, Italy
“In October, the performance of the portfolio was positive. Top contributors were the European Equity funds, M&G Global Dividend and JPMorgan Emerging Markets Opportunities. At last the Sino-US trade war seems to be nearing a mini-deal that could improve the outlook for international trade, the Brexit saga seems to be in for a quicker solution than expected and risk-on mode is overcoming the doom and gloom attitude of investors. We turn a bit cyclical: we buy Fisher Emerging Markets Equity, increase JPMorgan Emerging and the European funds, while selling MFS European Value, a high-quality strategy, and some cash.”
Lee Gardhouse
Chief Investment Officer, Hargreaves Lansdown Fund Managers. Based in: Bristol, UK
“Our UK funds performed well again in October, while those that invest overseas struggled. This continues a trend that started in September and partly reflects investors rotating from ‘quality’ to ‘value’. It’s a bit early to call the recent outperformance a turnaround, but it’s a good reminder, if one were needed, of the benefits of a diverse portfolio. There are still parts of the UK market that look undervalued, and while I’m sure sentiment will ebb and flow as we approach the general election on 12th December, I think there’s a good long-term opportunity to be found in UK shares.”
Bernard Aybran
CIO Multi-management, Invesco. Based in: Paris, France
“The overall asset allocation is somewhat changed, adding to the equity investments by taking profit on the debt. All actively managed portfolios did stick to their investment styles over the month of October, which lead many active stockpickers to underperform as a meaningful rotation occurred from growth and momentum to value. With value investing underperforming for so long, many actively managed funds have had to tweak their approach and many have even been closed altogether due to a lack of interest from investors. Active managers are now caught between sticking to their investment style and running out of investors’ patience.”
Paul Hookway,
Senior Fund Analyst, Kleinwort Hambros. Based in: London, UK
“There are fewer attractive asset classes, with equities our most preferred. The UK equity market offers the best relative value in our opinion, though we have as yet to see a catalyst able to unlock this value. Shifting assets from the US is looking more likely than 12 months ago, though not just yet. In October we took profits by selling the holding of Janus Henderson Global Technology, using the proceeds to add a new holding of the Lyxor S&P 500 ETF. Despite delivering strong returns it was time to remove this holding, reducing some of our implementation risk in the portfolio.”
Antti Saari
Chief Investment Strategist, Nordea investments. Based in: Copenhagen, Denmark
“October proved to be a calmer month, but with a positive undertone. Going into November, risk/reward has improved on the economic and political fronts. Specifically, global manufacturing has shown signs of bottoming out, and the odds of the worst outcomes from the trade war as well as Brexit have declined significantly. Hence, we increase equities to overweight in our recommendations.”
