Giovanni Becchere
Head of Multi-Assets, ABN AMRO Investment Solutions. Based in: Paris, France
“Reported earnings have been better than expected because the economic recovery has been stronger than expected. Forward earnings, however, could be challenged in coming months, once second-round effects take hold. This month, we add direct exposure to European small caps to benefit from a supportive momentum and the long-term risk premium offered by this asset class. We also buy Threadneedle Pan European Smaller Companies, a fund which aims to invest in high-quality growth companies offering strong and sustainable returns on capital.”
Luca Dal Mas
Senior fund analyst, Aviva Investors. Based in: London, UK
“Early data for September shows that, while manufacturing continues its steady improvement in Europe and the US, Japan continues to lag. By contrast, services were more impacted by the second wave of Covid infections, particularly in Europe. September was a difficult month for equities. Fixed income markets were more stable, with US, European and Japanese rates remaining in the range seen since late March. We used the correction to add to our gold and emerging markets allocation, while reducing our exposure to credit.”
Kelly Prior
Investment Manager in the Multi-manager team, BMO Global Asset Management. Based in: London, UK
“Shinzo Abe was replaced as President of Japan in a surprise shift in leadership.The market liked the change – Japan was the best performer in a mixed month for equities. The Morant Wright Japan fund was the best performer of the selection, while the TT Emerging Markets Unconstrained was the laggard. As we enter the final quarter of the year, the outlook is as opaque as ever. A vaccine could change everything, as could a spike in Covid deaths and increasing lockdown measures.”
Gayathri Devarakonda
Fund Research Analyst, Deutsche Bank Wealth Management. Based in: London, UK
“After having been one of the strongest performers this year, US equities lost ground in September with the S&P 500 and the NASDAQ 100 losing -3.8 per cent and -5.7 per cent respectively. Fixed income had a good month with US treasuries and gilts returning 0.2% per cent and 1.6 per cent respectively. Silver’s strong rally came to a halt as the metal registered -17.4 per cent return. The portfolio’s fixed income sovereign exposure performed well while emerging market and US growth exposure proved a drag on performance. We made no changes.”
Silvia Tenconi
Multimanager Investments & Unit Linked, Eurizon Capital SGR. Based in: Milan, Italy
“In September, the performance of the portfolio was slightly negative, with Baillie Gifford Japanese Equity being the biggest contributor. During the month, the Japanese market outperformed the other developed markets, as did emerging markets. The strengthening of the dollar added to performance. News of the second wave of Covid in Europe and the upcoming US elections are bringing some uncertainty to the markets. That said, we maintain a positive view on risky assets. We keep our allocation unchanged.”
Richard Troue
Fund Manager, Hargreaves Lansdown Fund Managers. Based in: Bristol, UK
“The UK market is heavily out of favour. Blame Covid-19, Brexit, hedge funds shorting the market, or passive funds rebalancing away from the UK. Blame all of the above. But don’t forget the best time to invest is often when it feels most uncomfortable. The UK hasn’t got much of what’s in favour right now (big tech), and dividends have been decimated. They’ll rebound in time though and valuations can only get so low before private equity and foreign buyers swoop in. I still think a core of good-quality UK funds will serve long-term, UK-based investors well.”
Bernard Aybran
CIO Multi-management, Invesco. Based in: Paris, France
“September has been an interesting month for actively managed equity funds as it is one of these not-so-usual months when a majority outperformed the index in Europe. The balanced portfolio did benefit from that trend. Overall, the trend of value underperformance went on and any allocation to this part of the market would have cost-relative performance. On the asset allocation side, the small portion of the portfolio that had been put aside in money market has been put to work by increasing the alternative investments. Emerging debt has been increased.”
Paul Hookway,
Senior Fund Analyst, Kleinwort Hambros. Based in: London, UK
“The recent sharp rebound in economic activity is giving grounds for optimism going forward. Against this backdrop we increased our equity exposure from significantly underweight to only modestly underweight, continuing our current cautious stance. We reduced fixed income by 5 per cent, taken from the gilt positions, also switching the emerging market debt position into the investment grade credit allocation. The proceeds were added to the US and Japanese equity exposures, the biggest addition was to Baillie Gifford Japanese”
Antti Saari
Chief Investment Strategist, Nordea investments. Based in: Copenhagen, Denmark
“The recent sell-off of stocks bears the mark of a correction and we think that the underlying drivers of the recent rally still remain in place. Volatility could remain elevated until after the US election, should the result remain unclear. Once that hurdle is passed, however, investors’ focus turns back to the ongoing recovery. We stick to our overweight in equities. For euro-based investors, we recommend downgrading government bonds to a deeper underweight and lifting euro investment grade corporate bonds to an overweight.”
