Giovanni Becchere
Head of Multi-Assets, ABN AMRO Investment Solutions. Based in: Paris, France
“Economic activity is showing signs of strong recovery in developed economies. Growth is expected to turn positive for the US and Europe in the third quarter of 2020, with 2021 being a year of further recovery. Central banks and governments have acknowledged the unprecedented circumstances and replied with unprecedented stimulus. The US Federal Reserve has even been accused of doing too much, after underwriting trillions of dollars to support markets and corporate lending. In this context we remain optimistic regarding the potential for risky assets to generate returns for investors. We keep our portfolio unchanged with an overweight in equities while remaining prudent on fixed income still subject to a default risk which is not fully priced by the markets.”
Luca Dal Mas
Senior fund analyst, Aviva Investors. Based in: London, UK
“After a sharp decline in April, global economic indicators now paint a more positive picture for the second half of the year. However, much of this is contingent on how long lockdowns remain in place. Market behaviour continues to be bifurcated, with equities for the most part looking past the dramatic impact of Covid-19 on global GDP, while global bond yields have remained more subdued since their significant falls earlier in the year. Suffice to say, the global situation is far from a sustainable equilibrium, therefore we have decided to reduce our exposure to equities, primarily from the US and Japan.”
Kelly Prior
Investment Manager in the Multi-manager team, BMO Global Asset Management. Based in: London, UK
“Mixed is a good way of describing June in market terms. While Asian, emerging markets and, to a degree, European equities gained, Japan and the UK lost ground with the US somewhere in between, as a resurgence in Covid-19 cases countered the euphoria, inducing support from the authorities in fiscal and monetary terms. Economic data bounced off a low base, as politics and the imminent US presidential election all vied for headlines and the attention of investors. The skew to growth led TT Emerging Markets Unconstrained to the top of the fund performance table, while Eastspring Japan Dynamic was anything but, as value continued to be shunned. Let’s hope the second half of the year is a bit calmer than the first – somehow, I doubt it will be.”
Gayathri Devarakonda
Fund Research Analyst, Deutsche Bank Wealth Management. Based in: London, UK
“Global markets continued their strong performance in June thanks to slowing growth rate of cases and reopening of major economies. Equities performed strongly and the Nasdaq extended its gains in June as tech and consumer discretionary names performed strongly. While fixed income underperformed equities, most of the fixed income indices registered positive absolute returns for the month. Brent and gold continued their strong performance. The portfolio did very well as all the holdings returned positive absolute returns. Our emerging market debt exposure, which dragged on performance last month, was one of the strongest performers along with global equities and gold. We made no changes to the portfolio.”
Silvia Tenconi
Multimanager Investments & Unit Linked, Eurizon Capital SGR. Based in: Milan, Italy
“In June, the performance of the portfolio was positive, with Fisher Emerging Markets Equity being the biggest contributor, followed by JPMorgan Emerging Markets Opportunities and Allianz Europe Equity Growth. Europe is now moving along with the US market, going through a slow recovery and a volatile phase, so we keep our asset allocation unchanged. At the end of the month we decided to exit from Polar Capital North American Equity and to invest in the UBS ETF MSCI USA SRI UCITS, given the quality bias and the good flows this kind of strategy is experiencing.”
Richard Troue
Fund Manager, Hargreaves Lansdown Fund Managers. Based in: Bristol, UK
“As we emerge from lockdown, economic data is improving and markets rising. The US is leading the charge with the best quarter since the late 1980s and late 1990s, depending which index you look at. We all know what happened next back then, but the difference is that in 1987 or 1999 sentiment was unbelievably positive. Not so this time round. Markets are climbing a wall of worry and this makes me think they can go higher. However, our problems are not going away. Covid-19 will be with us until a vaccine is found and the lasting impact on the global economy is still an unknown. Funds like Trojan, Pyrford Global Total Return, and BNY Mellon Real Return provide some insurance against these unknowns.”
Bernard Aybran
CIO Multi-management, Invesco. Based in: Paris, France
“The equity asset allocation has been slightly trimmed as a number of holdings performed quite strongly despite mounting concerns about the strength and shape of the economic and earnings recovery. The much awaited rotation to value once more failed to materialise and growth-oriented investments go on outperming most major markets. It is interesting to note that the fall of Wirecard did not impact any of the European equity investments. On the fixed income side, a carefully selected basket of emerging issuers help bring some carry to the portfolio while Western spreads went back to very low levels.”
Paul Hookway,
Senior Fund Analyst, Kleinwort Hambros. Based in: London, UK
“The month began with markets performing strongly as European lockdowns were eased, further stimulus measures applied, and clearer evidence of economic recovery started to emerge. However, later in the month some of these gains were given up, as virus cases accelerated in a number of the southern states in the US, Brazil, India and South Africa. We again decided not to increase our equity allocation, though the leading indicators were increasingly pointing towards this course of action at the beginning of the month. By month end this was less clear as globally covid-19 cases had started to surge again.”
Antti Saari
Chief Investment Strategist, Nordea investments. Based in: Copenhagen, Denmark
“The disruption resulting from the pandemic is likely to leave some long-lasting scars on a number of economies, but markets have managed to stage more or less a complete round trip. After the recent strong performance we see less medium term upside but we are also on the lookout for improving data that could reignite both the rally and the repositioning. Unprecedented stimulus and spending will continue and recent macro data points to the underlying economy staging a comeback, but there is still a lot going on that could derail the recovery. Hence, we stick to a neutral recommendation between equities and fixed income investments. However, we do find enticing opportunities in the bond space where we have an overweight recommendation both for high-yield and emerging market bonds These opportunities certainly come with higher-than-usual risks, but we find the balance still tilts in favour of trying to capture these premia in the coming months.”
