Giovanni Becchere
Head of Multi-Assets, ABN AMRO Investment Solutions. Based in: Paris, France
“Economic growth, while diminished, is expected to be stable and above trend through 2022. Some concerns, including those related to the pandemic and inflation, have led to increased market volatility. Nonetheless, the environment remains obviously attractive for risky assets. Earnings are also expected to remain supportive, even if earnings momentum is likely to lose some steam, as a consequence of loss of economic momentum and cost pressures arising due to supply chain issues. In addition, equities are also one of the few asset classes that still offer attractive real yields, together with emerging debt. In this context we keep our portfolio unchanged, with a preference for equity versus fixed income. In terms of style and manager allocation we prefer to keep a neutral stance on value/growth due to extreme volatility across styles.”
Luca Dal Mas
Senior fund analyst, Aviva Investors. Based in: London, UK
“The delta variant remains a risk for the economy. While the situation in the US is becoming more worrisome, Europe’s better position may be impacted by schools reopening and increased activity after the summer period. Estimates for economic activity in the euro area showed the first correction in the composite index after six months. Economic surveys in the US have weakened more than in Europe but remain on very high levels. Overall, surveys seem to suggest that the pace of recovery peaked in the middle of the year, but activity remains solid. Following higher inflation readings, we have trimmed our US duration exposure, while maintaining our equity allocation.”
Kelly Prior
Investment Manager in the Multi-manager team, BMO Global Asset Management. Based in: London, UK
“China again provided the fireworks in a month that saw most markets make gains, despite a wobble after discussions of increased regulation. Economic data showed signs of faltering due to an increase in the Covid Delta variant; however, the Jackson Hole symposium at the end of August reassured markets that the Fed remains dovish. US equites led gains while Asia and emerging markets rebounded from big falls mid-month. The Berenberg European Small Cap was the best performer of the selection, while the TT Asia ex Japan was the laggard. As well-vaccinated economies attempt to return to some sort of new normal post the summer lull, it will be interesting to see how those that have followed a different path fare in the final months of the year.”
Javier Estrada
Chief Investment Officer, Private Banking, CaixaBank. Based in: Madrid, Spain
“Markets continue to perform, and so we are keeping our positions steady. Half of our portfolio is currently in equities, the rest divided between fixed income and alternatives.Our fixed income strategy remains focused on low duration with flexible strategies. We added covered bonds in our last review, looking for credit quality with no duration risk, removing our position in emerging markets in local currency. The role of alternatives continues to be quite significant in our portfolio, performing well and with low volatility. On the equity side we are biased in favour of Europe versus Asia and North America. Sector-wise, healthcare, climate change and consumer discretionary are our main exposures.”
Silvia Tenconi
Multimanager Investments & Unit Linked, Eurizon Capital SGR. Based in: Milan, Italy
“August was another strong month for equities, and the portfolio recorded a positive return. Allianz Europe Equity Growth and Wellington US Research were again the biggest contributors. Post Jackson Hole, we are confident that central banks around the world will not rush to rein in monetary stimulus and that the rise in interest rates, if ever, will be gradual and will not hurt risky assets much. That said, with stockmarkets up 20 per cent so far, we keep some cash in the portfolio to exploit the volatility ahead.”
Richard Troue
Fund Manager, Hargreaves Lansdown Fund Managers. Based in: Bristol, UK
“Chinese regulatory and political developments provided food for thought over the past month. The banning of for-profit tutoring companies caught many off-guard. Some say it is a reasonable move to reduce the economic and mental burden on families. Others see it as a crackdown on private enterprise that will spread to the internet sector, healthcare, real estate and beyond. It is a reminder of the risks that accompany China’s growth potential. My preference for this portfolio is to get most exposure to China through a broad Asian fund, which diversifies our risk and adds the growth potential of many more dynamic economies. Of course, the managers can avoid certain countries if the risks outweigh the rewards. The Stewart Investors Asia Pacific Leaders Sustainability fund targets high quality companies that can endure through good times and bad. This approach has helped them avoid the worst setbacks, including the recent shenanigans in China, and still make decent returns in the good times. It is not always the most exciting approach, but it has stood the test of time.”
Paul Hookway,
Senior Fund Analyst, Kleinwort Hambros. Based in: London, UK
“Given the sharp rebound in UK government bonds, recovering much of their decline in March and
February, we decided to reduce our exposure; retaining the proceeds in cash for the time being. Equities, in our, opinion continue to be the most attractive asset class, but we are reluctant to increase our exposure given current valuation levels in developed markets and the recent volatility in emerging markets. Bonds remain unattractive and finding alternatives that offer an attractive level of downside protection with a high level of certainty is getting more difficult. Hence, we increased our cash position, until better opportunities appear.”
Antti Saari
Chief Investment Strategist, Nordea investments. Based in: Copenhagen, Denmark
“The Delta variant is spreading and causing concerns in markets. However, the tailwind from strong earnings is still blowing, thus lifting equities. Under the surface new winners are emerging though. Cyclical sectors have lost out over the summer while more defensive ones have come into play. The earnings tailwind will most likely subside, but continue to blow at a healthy pace. We therefore keep equities overweight. After two months of strong outperformance of European equities compared to their emerging markets counterparts, we think it is time to close our overweight recommendation for Europe and underweight for emerging markets equities. We bring our regional allocation back to neutral. In the bond space, we continue to grab for that extra return in European investment grade while underweighting government bonds. Overall, however, the return outlook from bonds is very modest going forward.”
Marco Pabst
Chief Investment Officer London at Union Bancaire Privée (UBP). Based in: London, UK
“The equity market’s performance in August was robust with the MSCI World gaining 1.5 per cent. Performances were positive across the US, Europe and most emerging markets as sentiment improved and both growth and recovery stocks gained. All positions in the portfolio performed positively last month, led by the UBAM Global Leaders fund gaining just under 4 per cent and contributing over 0.4 per cent to performance, followed by the Vulcan Value fund. In contrast to their benchmarks’ negative performances, our fixed income funds also performed positively in August. We are adding a position in the iShares MSCI China equity ETF to take advantage of oversold local stocks and signs of easing regulatory pressures.”
