2018 will be a year of allocation and tactical bets. The statement comes from Marc Terras (pictured), chief investment officer on open architecture long only asset allocation at Paris-based investment firm Rothschild Asset Management.
Speaking to InvestmentEurope, Terras, who joined Rothschild AM in 2000 to develop the institutional multimanagement of the firm, assesses macro-economic outlook looks good but that he can figure out a few clear risks.
“China, whose economic slowdown could affect trade globally, and a disappointment regarding US growth although a few indicators, like the situation of the US real estate market, do not show any sign of weakness. Could the dynamism seen in the emerging markets, in particular the LatAm area, and in the US offset slowdowns in China, Japan and Europe? It is an issue to monitor this year,” argues Terras.
Discussing long only asset allocation bets for 2018, Rothschild AM’s long only multimanagement chief says that on the equity segment, the unit would rather continue to invest in eurozone equities at the expense of US equities it still find expensive.
He adds valuations are attractive in Japan and that emerging markets equities are definitely a play, especially in Asia and Russia.
“Our fixed income investments are concentrated in a few niches currently such as emerging debt in local currency. The ambiance on the govies market does not push us to reposition ourselves on European and US government bonds yet. We wait for monetary policies to normalise. As for credit, we stress an investor shift from high yield to investment grade, even though it remains a small move. We are invested in subordinated debt,” explains Terras.
Open-architecture accounts for €5.3bn of assets under management at Rothschild AM, split between multimanagement and the structuring of investments solutions.
The firm’s InRIS platform which gathers alternative Ucits funds has €2.7bn of AUM.