Fund managers testing new tactics during Eurozone crisis
Many European fund managers are trying out new investment strategies in an attempt to keep generating returns despite the challenging market environment.
Earlier this month Jean-Marie Mercadal (pictured), head of multi-management and asset allocation at French group Ofi Asset Management, said managers needed to invest in risky assets in order to generate positive returns. Mercadal recommended convertible bonds and high yield bonds as well as equities.
Per-Olov Jansson is the director of Luxembourg-based Cardea International which runs the Mosaic Global Fund, a multi-asset fund of funds investing in a range of funds holding traditional stocks, bonds, commodities, real estate and alternative investments.
Jansson is anticipating heightened volatility in currency markets. He said Cardea’s multi-asset Mosaic Global Fund is being positioned “to take advantage of what we think will be more volatile currency markets going forward. For several months now we have seen very calm waters and we think this might change.”
According to Jannsson, more volatile currency markets should benefit some of Cardea’s hedge fund holdings that have relatively large allocations towards the FX markets. The Mosaic Global Fund encountered difficulties in August returning a negative 4%, bringing year to date performance to 0.64%.
Asoka Wöhrmann, chief investment officer of DWS Investment, the mutual fund arm of Deutsche Asset Management, also recommends playing the currency markets. “The ongoing struggle over Greece’s future is also doing damage to the common currency. Regarding the euro, we remain bearish across the major FX space. Consequentnly, we are holding euro short positions in favour of the US dollar, the Canadian dollar and the British pound,” he explained.
Meanwhile Aberdeen Asset Management has turned to Asian and emerging market debt as its chief executive, Martin Gilbert (pictured above), commented that “there is no easy resolution to Europe’s sovereign debt problems and the expectation is for anaemic economic growth in the West for some time.”
Aberdeen noted the promising performance of its fixed income investments in a recently released trading statement, notably Asian and emerging market debt portfolios. Their performance has resulted in “healthy net new business wins for both these strategies,” the report said. Aberdeen’s emerging market debt capability has added £0.4bn and Asian debt a £0.2 billion from the 30th of June to the 31st of August and has received further inflows during September.