Fund selection - October 2016

Giovanni Becchere 

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

“It is not all plain sailing for the global economy, but we remain cautiously optimistic that the business cycle will improve in coming quarters. Over the summer, European corporate bonds have profited handsomely from the inclusion in the quantitative easing programs of both the ECB and the BOE. Due to spillover effects, high yield bonds joined the rally. We halve the allocation to Schroder Euro High Yield and add Schroder Euro Corporate Bond as investment grade, unlike high yield, will continue to enjoy direct support from the ECB’s programme.”

Thomas Wells 

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

“September saw a pick-up in volatility as markets came back to life post the summer doldrums. We made no top-level asset allocation changes, but replace Schroder Asian Alpha Plus with Pinebridge Asia ex- Japan Small Cap. We continue to hold Matthew Dobbs, the Schroders PM, in high regard, but wanted small cap provided by Elizabeth Soon at Pinebridge. We believe that our active managers can benefit from the greater market information inefficiencies within the small cap space as well as the illiquidity premium.”

Gary Potter and Rob Burdett

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

“Markets ended the month not far from where they started, masking volatility in-between.  The Morant Wright japan fund was the best performing of the selection despite Asia being the best market in the month. Conversely the BGF Continental European Flexible fund fell to the back of the pack reflecting the fortunes of its base market. We switched the Polar American position for the Artemis US Extended Alpha Fund, and also replaced the Verrazzano Advantage European fund for the Memnon European fund.”

Silvia Tenconi

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

“The portfolio ended the month almost flat. Positive contributions came from Vanguard US Opportunities, strongly outperforming its benchmark, Comgest Emerging Markets Equities and Julius Baer Local Emerging Bond. Detractors were Jupiter European Growth, MFS Global Equity and Schroder European Opportunities. Jupiter European Growth is underperforming year to date, but we continue to retain confidence in its management team and in its investment style. We made no changes to the portfolio.”

Jean-Marie Piriou

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

“After two relatively positive summer months for global equities, in September markets were influenced by monetary policy outlook among the major developed countries and central bank decisions. Doubts, equivocation and a number of disappointments drove equity volatility and government bond yields higher. In that context, we still believe the allocation is favorably positioned to face this market environment comfortably and our allocation remains unchanged. We maintain our views on the necessity of some equity in the portfolio.”

Peter Haynes

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

“We remain cautiously positioned with no changes overall to our weighting to both equity or bonds. We decided to take profits on our long dated 10y US treasury tracker and have reinvested this into US TIPs as we feel inflation in the US is understated and this has lower duration. After a good run on our S&P minimum volatility tracker in the  US we decided to half this and reinvest into an active fund able to invest in mid caps as well as favouring technology. Alternatives continue to disappoint and we reduce our allocation, adding a CTA fund, retaining our gold position.”

Bernard Aybran

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

“The balanced portfolio has been rebalanced on the equity side, mostly on asset allocation basis, trimming the highly volatile, and highly performing, gold miners and buyback achievers, while investing the proceeds on European actively managed funds. Overall, the funds in portfolio performed well. The fixed income portfolio has been built on purpose with a combination of funds mostly mimicking a benchmark on one hand and very flexible funds on the other hand. In these times of very uncertain policy at the Federal Reserve, the latter might help.”

Lee Gardhouse 

Chief Investment Officer, Hargreaves Lansdown fund managers . Based in: Bristol, UK

“When it comes to selecting equity managers, for us the Holy Grail is stockpicking. One manager that has exhibited plenty of this over his career is Philip Rodrigs of River & Mercantile. We first started taking to Philip when he worked at Investec. We sensed his frustration as after a number of meetings with him he still had no investment from us. We only backed Philip when we had nine years of track record. We wait for plenty of proof of skill but then invest with conviction over a prolonged period of time.”

Peter Branner

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

“BlackRock European Diversified Equity Absolute Return is a systematic market neutral equity hedge fund investing on the European markets. The fund is equipped with three main modules with different horizons to secure diversification over time. So far all three modules have delivered negative returns in 2016. Our conviction in the process and philosophy has been tested and we have noticed that new, unproved metrics have been added recently. We have an active dialog with the manager to follow the results and to build our trust in these changes.”