Italian selectors ready to expand their buy lists

Following an improvement in market conditions, Italian selectors are ready to expand their buy lists to include newly launched funds or niche funds, often managed by international fund houses looking to diversify their offering.

To expand and refresh their lists, selectors often rely on qualitative analysis, mainly face to face meetings with managers and on quantitative analysis on similar funds managed by the same firms.

Several selectors based in Milan confirmed that an improvement in risk sentiment and in the current and expected outlook of peripheral Europe has pushed them to review their fund lists since the beginning of 2013.

One of the top 3 players in the Italian market said that about one third of the list, composed by about 200 funds, has been reviewed since the beginning of the year. New funds selected often focus on high yield and on emerging markets.

Other selectors working for smaller firms and for insurance companies also mentioned the need to find and assign a rating to niche players, to whom they have a more limited exposure in Milan.

Given the more positive outlook, this search has become more proactive since the beginning of the year. Methods to assign a rating are also shifting from qualitative to quantitative to accomodate for the vast universe of funds taken into consideration.

Meanewhile, the Italian financial market remains in a wait-and-see mode during the last week before political elections are held in the country.

A significant majority is yet to emerge between the three main running parties (left, right and centre) and the most dangerous scenario mentioned by fund selectors is related to a hung parliament which could emerge if the winning party among the three will be forced to form a coalition government, with the real risk of new elections to be held before the summer.

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