The job of a fund selectors is not an easy one and, for this reason, the Sharing Alpha platform has drawn up a list of the ten best European fund selectors in 2020. The fund selectors who made the European Top-10 list are: Patricia Ribelles (Orienta Capital), Vinicius Kagel (DWPT Deutsche Wertpapiertreuhand), Tiago Gaspar (Banco Carregosa), Peter Ahl (Gräsa Consulting), Daniel Rock (Europeiska Investeringsrådgivarna), Markus Sievers (Apano GmbH), Daniel Roig Roca (Tio & Codina Asesores), Oliver Marx (HSBC), Kim Johanson Tanke (Mercer Norge AS), Insaf Amri (Banca IMI).
|Patricia Ribelles||Orienta Capital||Spain|
|Vinicius Kagel||DWPT Deutsche Wertpapiertreuhand||Germany||Tiago Gaspar||Banco Carregosa||Portugal|
|Peter Ahl||Gräsa Consulting||Sweden|
|Daniel Rock||Europeiska Investeringsrådgivarna||Sweden|
|Markus Sievers||Apano GmbH||Germany|
|Daniel Roig Roca||Tio & Codina Asesores||Spain|
|Kim Johanson Tanke||Mercer (Norga) AS||Norway|
|Insaf Amri||Banca IMI||Italy|
We asked members of the European Top-10 ranking what their market outlook was for the next twelve months:
Patricia Ribelles, Investment Analyst at Orienta Capital
The central scenario for 2021 that we put forward in Orienta Capital’s investment committee is that of a global economy gradually recovering in 2021. But highly dependent on the evolution of the pandemic and additional economic support measures that could slow or accelerate this recovery.
It will therefore remain essential to maintain portfolios that can withstand a variety of economic scenarios and withstand any unforeseen events that may arise.
Thus, we continue to build portfolios that combine traditional investments via mutual funds with illiquid alternative investments. The combination of both strategies, in which we have years of expertise, provides the diversification we seek in the current environment as opposed to the typical traditional asset-only portfolio.
Moving down to the asset classes, we hold portfolios with plenty of liquidity which gives us the flexibility to act nimbly when we find more attractive valuations. In fixed income, we continue to find little value and remain heavily underweight. In equities, we also remain underweight to high valuations and opt for a quality bias. Lastly, we favour investing in real assets that provide us with a de-correlation with the rest of the categories. This includes investments such as gold and exposure to listed commodity companies, as well as real economy projects with a significant bias towards income generation.
In short, it remains essential to build resilient portfolios that can withstand the various economic scenarios that may unfold over the course of 2021.
Tiago Gaspar, Investment Analyst at Banco Carregosa
We are looking at the current market conditions as a departure from what happened last decades but already happened long before.
Nowadays we are at an important intersection between fiscal and monetary policies. In the next fews months (and certainly beyond that), we will be paying close attention if this intersection will promote a reflationary environment. We do believe we need a reflationary environment because of the huge debt pile and this pile is getting bigger.
We think there will be two ways to reduce the debt to GDP:
- Austerity, but the European experience was very painful and, as a consequence, promoted populism
- Elevating inflation just above interest rates
A correct articulation between the fiscal and monetary policies could create this environment with inflation, let’s say, 1% to 2% above interest rates without big disruptions between debtors and creditors. In others words, the fiscal side should be expansionary to inflate the economy, and the monetary policy should keep the yield curve below the inflation. It will be a tall task without doubt, but necessary.
Daniel Rock, Financial Advisor at Europeiska Investeringsrådgivarna AB
I continue to be overall positive for risky assets in general and equities in particular. The reasons are:
- Strong global economic growth, where IMF (the international Monetary Fund) currently estimates global growth at 5.2% for 2021
- Record low interest rates both makes equity valuations look reasonable and leave few alternatives for yield looking investors
- Unprecedented monetary and fiscal stimulus which will continue poor into the market
- Strong earnings growth from equities
We do, however, have a large dispersion in valuation on equities and thus think passive investments will struggle, but active funds have high potential to generate attractive returns. Selection will be key and truly active managers will be able to benefit of this – i.e. the type of managers I select and that are found at SharingAlpha.com.
Lastly, I continue to see sustainability and impact investing as a key factor driving equity returns, where we in 2021 could expect a further multiple compression and possibilities for higher margins for companies with a clear target on how to achieve positive impact.
Daniel Roig, Managing Partner at Tió&Codina Asesores
2021 is expected to be the year of economic recovery and we believe that risk appetite will return to the markets. Equities are more attractively valued compared to bonds, which is why our recommendation is to overweight equities and underweight bonds in portfolios.
Within fixed income, our preference is for short-duration euro-denominated corporate bonds, as well as emerging market local currency bonds. On the equity side, we believe that our portfolios should maintain a predominant exposure to the world’s two major economies, which is why we will hold positions in global equity funds with a significant weighting in the US, along with emerging Asia equity funds with a significant weighting in China. On the European side, our preference is for investing in small-cap companies as opposed to large companies, as we believe we can find more investment opportunities here.
In terms of sectors, our view is that the technology sector will continue to offer structurally attractive returns, although we also believe it is worth taking a more tactical position in the energy sector. This sector is one of the most attractively valued and could improve over the coming months in the face of a possible recovery in oil prices.