Selectors consider allocations amid the macroeconomic backdrop
A brighter European macroeconomic backdrop is seen by some fund selectors, although the benefits of managers with silver hair and a safety-first approach are still in demand.
The Silver Manager
Name Jens Kummer
Title Head of Multi-Asset team
Company SEB Asset Management
What are some points you look for in fund managers?
We are biased towards ‘grey hair’, and we examine what culture and structure they have. If there are a lot of people involved and a committee takes decisions, that is a ‘no go’ for us. The responsibility for performance should be clear, and always a small team sitting together with a similar mindset, but different opinions and areas of specialisation.
Fund management changes happen too often, so the average ‘life’ of a fund manager now is less than three years. We want to see good infrastructure and a team that thinks long term. We are cautious if managers leave a big bank and set up their own boutique as half the day is gone running the firm. If a manager has left a bank and does well, we could come back to him. If we miss the opportunity, we miss it.
Name Didier Duret
Title Chief investment officer
Company ABN AMRO Private Banking
How has ABN AMRO changed its allocations following the ‘relief rally’ earlier this year?
Industrials join the bank’s list of preferred equity sectors as it increases its overall European equities position to neutral by taking profits on its US equities allocation, which has been overweight since July 2011. It has also moved Asian corporate bonds to overweight. Asia, where the bank is overweight in China, Indonesia and Malaysia, is favoured.
Improved investment conditions in the first quarter are reflected in a fall of almost half of the cash position within the bank’s balanced model portfolios to 18%. The bond allocation has increased to 34%, equities to 40% and alternatives stay at 8%. The bank retains an overall underweight allocation for fixed income. Last quarter’s relief rally has not exhausted the upside for equities: valuations are historically low and many investors remain underinvested.
German Wealth Preservation
Name Dirk Fischer
Company Patriarch MultiManager
Do you view the growth of wealth-preserving funds as an advantage for investors?
It is the right development for Germany. In a bull market such as the booming equities in 1999, for example, everyone thought they could continually make more money with commodity or internet funds.
However, many investors had to suffer painful experiences that were contrary to this because they were not conscious of the risks. Previously, the question had been how double-digit returns, which were envisaged in perpetuity, were to be achieved to make one’s big fortune: India, China, commodities, dotcom or gold? These days it is a case of safety first, or, if I can get 4% or 5%, then I am absolutely satisfied‘. This development is a good and proper one, and is both absolutely welcomed and supported by product providers such as Patriarch.