This Thursday, 15th of July here at RankiaPro Europe we hosted our fifth Conference Call of 2021. We had a fantastic time learning with the insights and strategies of our three panelists while understanding their strategies on how to position portfolios for the second half of the year.
To discuss on the topic how to position portfolios for the second half of the year, we had the honour of hosting three investment professionals whose expertise gave us an understanding of the current state of the market, we discussed the state of the vaccinations in the different countries, and its effect on Emerging markets and the supply chain, inflation and the potential of recovery in the market.
Fahd Bargach, Fund Selector at OFI Asset Management, Kalinka Dyankova, Senior Fund Analyst at Lyxor Asset Management, and Antonio Del Vaso, Head of Investment Services at Volksbank touched on a broad range of factors that are likely to shape the investment landscape during these times of uncertainty and inflation.
“We see a smaller portion of the population fully vaccinated, and we also can question the efficiency of the vaccine used in the emerging market countries. A recent study shows that the Chinese vaccine have a quite low efficiency against the alpha variant, the UK one. The efficiency is even lower with the delta variant and that can be a big threat for the emerging markets.”
“About inflation, everybody is talking about it since the beginning of this year. We are just this week the number for the US for the previous month, it was quite strong number 5.4% of inflation over a year and around 1% month over month, but when see in more detail the data it’s about 60% of this inflation that came from the car, an increase in new car, used car or rental car, this is quite in line with the Central Bank thesis that inflation is transitory and we will see a more normal level of inflation when the supply chain issues will be solved.”
“The bank is not the problem, it is part of the solution and the recovery of the economy, quite agree with this thesis, and with the help of the central bank and there is a lot of constraint in the regulatory point of view since 2008, the bank came into the crisis with a strong balance sheet and stronger fundamentals”Fahd Bargach, Fund Selector Ofi Asset Management
Fahd talked during his presentation about the funds Tikehau Subfin Fund, Lazard Global Convertibles Recovery as part of his strategy.
Fahd is an analyst in the Fund Selection team at OFI Asset Management. He joined the company in 2017 and covers the selection of Fixed Income and Convertible Bonds funds. Fahd is a graduate of HEC Lausanne with a master’s degree in Finance.
“When we look at even vaccination rates there are very few countries that are producing vaccines, and when we look at continents America and Europe are the ones that have the higher vaccination rates, but what about the other continents? we have Africa, we have Asia where the rates are very low, it is still going to be a threat and this is to something that we need to be mindful of , but also the supply chain what we’ve seen previously in recessions positions were very much driven by demand, where today when we’ve seen the economy evolving, there was an increasing consumer appetite and this appetite has come to a supply which wasn’t there, basically the globe was unable to produce whatever the consumers were looking at so there’s still something to be taken into account for the second half of the year“
“After a very strong beginning of the year the commodity sector is in turbulence since June. In addition to profit taking, weakness in commodity prices has reflected investors’ doubts about the ‘reflation trade’. In our view these are temporary. They might moderate the commodity rally but could also prolong it.. Also, structural commodity drivers are not China centric. They include decarbonation, the rise of electric vehicles, infrastructure spending, and a housing boom, which would particularly benefit base metals.”
“We remain overweight in equities which, in our view, still offer the best potential in this supportive macro backdrop. Growth should continue to gather pace in developed economies and central banks to maintain an accommodative policy mix. In terms of regions, we favor US on the back of buoyant earnings growth and Europe whose delayed economic reopening, due to slower vaccination campaigns, leaves more upside to come especially in the cyclical sectors. We stay cautious on EM equities that could suffer from rising US yields and a stronger dollar.”Kalinka Dyankova, Senior Fund Analyst at Lyxor
Kalinka presented as part of her strategy the funds BGF Continental European Fund, Lyxor Marathon EM Debt, Fidelity UK Special Situations.
Kalinka Dyankova is a Senior Fund Analyst at Lyxor, which she joined in 2014. She holds a master’s Degree in Risk Management from Université Paris XIII Nord (2010) and a master’s Degree in Trading and Asset Management from ESLSCA Business School. Kalinka is mainly in charge of analysing UK equity and Bonds and GEM Equities funds.
“The threats that we could encounter in the second half, is the overestimation of the recovery rate of the retail demand once we’re out of the pandemic. This might be because of higher unemployment rate with respect to the pre pandemic, and also due to more uncertainty about the future for people. In summer we might experience some short term volatility due to news, but without a clear path, and we will see a clearer path in September or October when some extraordinary measures put in place by the government will stop, and then we will see the financial results for the third quarter”
“Long-Short strategies are characterized by the contemporaneous presence of long and short positions in portfolios. This strategy allows to modulate the market risk exposure: the differences in terms of reactivity to market exposure between the long and short position determine the real exposure. The main advantage is to exploit both the best and worst in class results of the stock picking, and even the possibility to profit in lateral markets. The bias will be long or short depending on the fund manager views on market dynamics.”
“We have significantly increased our position to emerging markets, specially to China. China presents significant opportunities to take, high inefficiency of China internal market, big opportunities to active managers to making alphas.”Antonio del Vaso, Head of Investment Services
Antonio englobed inside of his strategy to position portfolios for the second half of the year the funds Anima High Potential Europe, JPMorgan China A-Shares Opportunities, Blackrock China Bond, Pictet Global Megatrend.
Graduated in Banking & Finance, Antonio worked in 2014 for major business-consulting firms; Dedicated to driving success through teamwork and efficient communications, he accepted the position as project manager for the restructuring of Wealth Management, and as of June 2020 he has been designated as Head of Investment Services. Currently, he is also enrolled in an Executive MBA program in SDA Bocconi.