Fund selectors discuss nightmares, star managers, and the economic outlook
Fund selectors including John O’Tool at Pioneer Investments, José Concej for Allianz Global Investors in Madric, and Thomas Romig at Union Investment in Frankfurt have given their views on nightmare scenarios, star managers versus star funds, and the economic outlook.
Name: John O’Tool
Title: Head of multi-asset portfolio management
Company: Pioneer Investments, Base Dublin
What keeps you awake at night?
Probably what the next horrible scenario could be. Something bad coming out of China, perhaps, because it is the ‘last man standing’. If you look at global rate projections, they are being brought down.
The US has not managed to get sensible growth rates deemed sufficient to reduce unemployment; Europe is throwing money into all sorts of holes. All this will constrain growth for some years.
The last great hope is China and if something unforeseen comes from that source, that would be a problem.
Will emerging markets break through and become the new powerhouses, while Europe and the US sink? People had similar thoughts about Japan in the 1980s, saying that it would conquer the world. The answer to all this is somewhere in between the two [extremes].
Name: José Maria Concej
Title: Managing director country manager, Spain and Portugal
Company: Allianz Global Investors Europe, Base Madrid
Do investors in Spain prefer team managers or star managers?
Normally, investors don’t look at the managers’ names because in most cases, they don’t know the names of the managers of a firm.
There are probably only two or three funds in Spain that you could relate to a name. Usually what matters is the name of an institution or a bank.
In the case of foreign funds, only a few funds may be related to a specific manager.
Bill Gross at Pimco is one of them and there are maybe a couple of others.
But it is mostly the fund’s performance that matters.
In this case, the performance is good and the name is well-known and respected. It certainly helps.
Name: Thomas Romig
Title: Head of multi-asset team
Company: Union Investment, Base Frankfurt-am-Main
What is your economic outlook and fund positioning?
At the moment, we do not expect a double-dip scenario for the US with the following negative consequences for global growth.
The credit markets are now the leading indicator for the stress in the capital markets.
The challenges are the debt crisis in Europe and the US, as well as keeping up a substantial growth rate for the developed economies.
If we had a second or third crisis, then I would question if we would see the same pattern as 2008.
Starting in July, we reduced our exposure to risky asset classes, namely equities and credits, significantly.