Fund selection - August 2017

Giovanni Becchere 

Head of Multi-Assets, ABN AMRO Investment Solutions. Based in: Paris, France

“The positive momentum underpinning investment in risky assets continues. The global economy is growing at a decent pace with positive surprises in Europe and China. Chinese economic growth and industrial production are better than expected, decreasing the risk of a slowdown. Global inflation pressures remain modest and communication remains an essential pillar of central policy making in between official meetings. We keep the overweight in equities with a preference for Europe and emerging markets, as well as for value versus growth in Europe and the US.”

Thomas Wells 

Fund Manager, Multi-assets Aviva Investors. Based in: London, UK

“Our decision to add European banks last month was rewarded with them returning nearly 5 per cent and significantly outperforming the wider European equity market. With Europe growing at 2.2 per cent we expect this trend of sector outperformance to continue. Banking stocks are pro-cyclical by nature and Europe is experiencing a cyclical recovery. Despite positive inflows year to date, investors are still underweight European equity which should provide additional support for our positioning as this reverses.”

Gary Potter and Rob Burdett

Co-heads of multi-manager, BMO Global Asset Management. Based in: London, UK

“Central bankers again took centre stage in influencing sentiment for markets as the suggestion that less aggressive action gave fresh legs to a positive run that had faltered. The euro strengthened significantly against the dollar as ECB president Mario Draghi calmed markets fearful of a change of tack on QE. In euro terms equity returns were mixed as a result, with emerging markets and Asia leading the pack. We remain cautious as markets look potentially vulnerable to change.”

Silvia Tenconi

Hedge Funds & Manager Selection, Eurizon Capital. Based in: Milan, Italy

“The portfolio ended July with a negative performance. Our US dollar exposure detracted the most. We are reducing it, by switching out of Nomura US High Yield into Lord Abbett High Yield, euro hedged. We also reduced our exposure to US small and mid-caps, by selling JPMorgan Highbridge US STEEP, Wells Fargo US All Cap Growth and reducing Robeco US Opportunities. The weaker dollar should benefit larger and more international companies, rather than smaller, domestic players. We opened new positions in Wellington US Research and Polar North American Equity.”

Jean-Marie Piriou

Head of quantitative analysis, FundQuest Advisor, BNP Paribas Group. Based in: Paris, France

“After a sharp drop in June, equity markets continued to rally in July. We reshuffled the portfolio in order to increase the risk through the equity and the fixed income exposure.”

Peter Haynes

Investment Director, Kleinwort Hambros. Based in: London, UK

“July’s positive equity market returns were driven by a strong Q2 earnings season in the US, indicating earnings per share growth approaching double digits. Currencies showed more volatility, with the US dollar continuing to fall against the pound and the euro. We have made no changes to the overall asset allocation, with equities remaining our preferred asset class. We have however switched our Asian exposure into Hermes Asia ex-Japan due to its unconstrained, contrarian investment approach which has produced excellent results in most market conditions.”

Bernard Aybran

CIO Multi-management, Invesco. Based in: Paris, France

““Asset allocation has been kept mostly unchanged, except for a small increase in European equity at the expense of US, higher yielding stocks. Overall, the funds in the portfolio did perform well last month, with the exception of the higher yielding stocks, hampered by rising rates. For stockpickers in Europe, 2017 has been a favourable year so far, with a high dispersion of performances between sectors and stocks. By contrast, actively managing a bond portfolio has proved quite challenging against the backdrop of major changes by central banks.”

Lee Gardhouse 

Chief Investment Officer, Hargreaves Lansdown Fund Managers, Based in: Bristol, UK

“In our industry it is common for people to talk about buying funds. However our approach is about investing with managers because it is the skill of the fund manager or team that run the fund that is the key to delivering excellent performance. This month our top performer is Giles Hargreave, manager of the Marlborough UK Micro Cap fund. While the 4 per cent returned this month was nice, the real prize has been the 600 per cent return achieved since we started investing with Giles when he launched this fund in 2004. There has been no change to the portfolio.”

Peter Branner

Global CIO, SEB Asset management. Based in: Stockholm, Sweden

“In a low rate environment it is a challenge to find segments that give both yield and diversify the portfolio while remaining liquid. One such segment is securitised assets. Morgan Stanley Global Mortgage Securities Fund offers a global and well diversified investment strategy with exposure to both agency and non-agency backed assets and is led by an experienced manager. The investment process starts with strategic sector allocation with input from the broad Morgan Stanley asset allocation team. We sold Kames Capital Abs Return Bond Fund.”