Each month in PWM, nine top European asset allocators reveal how they would spend €100,000 in a fund supermarket for a fairly conservative client with a balanced strategy
Benjamin Hamidi
Senior portfolio manager, ABN AMRO Investment Solutions. Based in: Paris, France
“Headline inflation is expected to decline gradually and policy rates are to peak soon. We are targeting moderate active risk for the time being and therefore decided to raise the exposure to fixed income strategies, increasing the duration of the portfolio slightly. We have also consolidated our exposure to European high yield and maintained our relative overweight in Emerging markets. The global equity allocation is neutral, but we are closely monitoring the earnings season and may consider a future increase.”
Luca Dal Mas
Senior fund analyst, Aviva Investors. Based in: London, UK
“Equity markets started the year with a strong rally. Chinese and European markets performed better, but all major regions have enjoyed good gains. Early data for January showed either a stabilisation or slight improvement across the major economies, with Europe and Japan moving into expansionary territory, as the UK contracted further. In portfolios we maintain our mild conservative bias and have slightly reduced our exposure to UK and European stocks, given their strong performance since the start of the year.”
Jorge Velasco
Director of Investment Strategy, CaixaBank Private Banking. Based in: Madrid, Spain
“We are broadly maintaining the investment approach of recent months — defensive positioning and a low exposure to risky assets. With no change in fixed income or alternative investments, we are tweaing the equity section, although the weighting remains unchanged. We are increasing exposure to European equities by reducing exposure to US equities, and increasing exposure to emerging equities by reducing some exposure to value-biased European equities. In the thematic investments, we replaced the health sector with global technology.”
Kelly Prior
Investment Manager in the Multi-manager team, Colombia Threadneedle Investments. Based in: London, UK
“January saw financial assets soaring as concerns over inflation, and the Central Bank’s response to it eased.Falling energy prices depicted a more optimistic assessment for the near term economic outlook, despite central bankers reiterating that they were yet to complete their hiking campaigns. We have consolidated our positions in TT Asia ex Japan fund into the TT Emerging Markets Unconstrained fund. We will remain cautious that the rally can continue, as markets are set to keep us on our toes in this very distinct environment.”
Silvia Tenconi
Multimanager Investments & Unit Linked, Eurizon Capital SGR. Based in: Milan, Italy
“In January the performance of the portfolio was positive, with European and Chinese funds the best contributors, as well as BNP Paribas US Growth. Equity markets rallied during the month, in the run up to the Fed and ECB meetings of February, as consensus expected a dovish tone from both. Moreover, data coming from the US labor market were strong once again, inflation seems to be cooling off, and investors regained some of their animal spirits. We keep our allocation unchanged, choosing equities and credit to government bonds for the moment being.”
Richard Troue
Fund Manager, Hargreaves Lansdown Fund Managers. Based in: Bristol, UK
“This month I’ve replaced Liontrust UK Equity with another fund from the Liontrust stable — the UK Growth fund. The former has struggled performance wise, and analysis has indicated stock selection has deteriorated. The UK Growth fund has an enviable performance record with a lot of value added through stock selection. It also brings slightly less exposure to small and mid-caps. This is useful from a portfolio perspective, given most of the other UK managers are overweight small and mid-caps to a greater or lesser extent.”
Paul Hookway,
Senior Fund Analyst, Kleinwort Hambros. Based in: London, UK
“Despite inflation slowing, interest rates continued to rise. We are concerned that labour markets may keep inflation higher for longer than expected. Chinese purchasing managers’ index data was very strong, driven by Covid policy relaxations. How we play this theme in the portfolio will be key to delivering performance over the next 12 months. We made no changes in the month, remaining underweight equities and duration exposure. The alternatives allocation continues to offer strong diversification benefits against equity market volatility.”
Antti Saari
Chief Investment Strategist, Nordea investments. Based in: Copenhagen, Denmark
“Around the turn of the year, some much anticipated green shoots began to emerge for financial markets, upgrading our economic outlooks. Investors took a glass-half-full approach to this, pushing equities higher. However, fear of lagged effects from monetary tightening and continued earnings downgrades remains. We keep our neutral weight between equities and fixed income. We overweight Emerging Markets and European Investment Grade, where the compensation for taking on additional risk is elevated also from a historical standpoint.”
Didier Chan-Voc-Chun
Head of Multi-Management and Fund Research at Union Bancaire Privée (UBP). Based in: London, UK
“China and Europe have performed well in 2023 while US stocks jumped on optimism that Fed tightening is nearing its peak. Tech soared in as Meta’s positive results sent its shares up. The euro-area economy has proven more resilient than expected and risks to growth and inflation are becoming more balanced. We increased our allocation to Asia ex Japan slightly across both equities and fixed income. We marginally reduced our US equity exposure and recycled the proceeds into Europe on the back of more attractive valuations and better momentum.”
