Manuela Thies captures US upswing at Allianz Global Investors

Manuela Thies, director and head of RCM Allianz Global Investors’ Multi Asset MultiManagement in Frankfurt, has employed a mixture of ETFs and futures contracts to capture the upswing in US markets, as she says some active fund managers “can sometimes be a little bit too slow to capture these changes and market movements rapidly”.

She said using such products allowed her team to implement views quickly, where timing inflexion points could give multi-managers an advantage in the short term.

The ability to tilt a fund of funds portfolio rapidly was of great use last year as markets moved quickly between risk-on and risk-off, sometimes in one trading day. Although the markets have large been risk-on so far this year, many managers say this could change, especially if bad news comes from the Eurozone debt crisis.

However, US economic data has continued to surprise, positively, and the S&P 500 rose 9.2% in the first two months of the year, after falling by 0.82% last year.

Thies (pictured) says: “When we expected an upswing, we added passive instruments and switched from some more defensive strategies to more aggressive ones, all under the aspect of careful risk control.”

In the longer term, though, she emphasised it was still important for the team have a macro view at the fund of funds level, and find the single portfolio managers who could do best in the expected climate.

So, for example, she highlights America’s “very high debt level”, and a continuing deleveraging over the medium- to longer term, “which will be a structural issue”.

Rene Gaertner, portfolio manager in Allianz Global Investors’ Multi Asset MultiManagement team, said the team has a generally higher use of passive products in more efficient markets like America’s, than it does in Europe or Asia. It uses active managers for the US, too, but in more targeted areas such as small caps.

The multi-manager team also employs derivatives products for emerging market exposure.

Gaertner says: “We are generally positive on EMs but we realise there are erratic moves from between risk-on andto risk-off, and we need to be able to move quickly in a changing environment, and keep risk under control. You can use a combination of a futures overlay, and put options.”

 

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