Hamburg Summit: Roundup of last two days
The second day of the InvestmentEurope Pan-European Fund Selector Summit in Hamburg kicked off with former UK chancellor of the Exchequer Alistair Darling as keynote speaker.
The former chancellor discussed the lasting impact of the global banking crisis, the effects of monetary policy and prospects for Brexit.
The second day of the Summit also featured presentations from asset managers that showed their strategy on Day 1, while eight new asset management firms presented their investment strategies on Thursday and Friday.
AB’s head of European Corporate Credit Jorgen Kjaersgaard explained how to deliver European fixed income return without high yield volatility.
With the BoE and ECB being direct buyers of corporate bonds, AB expects this pattern to continue in H2 2016 and 2017, making investment grade attractive in the foreseeable future.
AB’s Kjaersgaard said traditional investment approaches have limitations in today’s ECB-driven market but European high yield corporate is “modestly better”.
Danske Invest’s head of European and Global Equities Lars Thors discussed how to invest in European equities in a low interest rate environment.
European investors are challenged by the monetary policy of the central banks, which has forced interest rates to historically low levels. In this context, Danske’s Thors said the Fed should raise rates sooner than later.
DNB Asset Management senior portfolio manager Mikko Ripatti discussed new investment opportunities created by digital disruption.
Ripatti sees Internet for all & of things, services to cloud, big data, fragmentation of video and fintech disrupting banks as key megatrends.
The portfolio manager said artificial intelligence is “possibly still a couple of decades away at least before computers can really start to think for themselves”.
Henderson Global Investors, for its part, sees opportunities to generate return in the European high yield market, which has returned almost 8.5% over the first eight months of 2016.
Thomas Hanson, portfolio manager at Henderson, said the Euro corporate high yield health remains robust as defaults are still low.
US corporate high yield market is highly leveraged, while “broadly speaking this is not the case of Europe”, he said.
New Capital – EFG Asset Management spoke about Chinese equities as China’s economy is shaping up.
With tourism taking off and the combined effect of supply side reform with the progressing RMB internationalisation China’s economy is changing shape, said Mansfield Mok, senior portfolio manager at New Capital – EFG Asset Management.
Old Mutual Global Investors’ portfolio manager Huw Davies spoke about alternative approaches to traditional fixed income investing.
Davies said he invests taking into account forward bond rates moving in different directions in the same markets.
He also highlighted that OMGI’s absolute return bond fund long-term dispersion has a similar risk profile to government bonds.
Kames Capital’s Jacob Vijverberg also discussed how to overcome the income challenge amid global interest rates remaining at historical lows.
Kames’ Global Diversified Income fund aims at 5% return in current low yield times, which can be achieved through equity, property and alternative assets investing, Vijverberg said.
Tokio Marine Asset Management Yasuyuki Kanda discussed Japanese equities.
Kanda said Japan is very vulnerable to external factors, so the asset manager does not take significant bets on sectors or positions.
But Kanda likes turnaround stories like Sony or Nintendo, which for a long time were “not attractive but now have reached inflection points”.
“The Nintendo story goes beyond Pokemon with strong intellectual property and strategic partnerships,” Kanda said.