Everyone's talking about... The calls on the
cards for Q1
Professional Adviser Author: Laura Miller
In the final part of our new series looking at the most topical investment themes for the
quarter ahead, Professional Adviser asks multi-managers where they will be investing in the
first four months of the year.
The oil price underwater.
Europe facing deflation, upcoming elections and the potential for massive QE.
When we think about managers we review, its been a struggle to find value; they think
everything's expensive
Equities with earnings priced in but not proved.
Bonds yields at or nearing negative territory.
Uncertainty over home grown investments.
There seem to be no easy winners for professional investors this quarter.
Here multi-managers - who look across the whole investment universe - reveal where they will be
putting money to work, and what they will be working to avoid.
Architas chief investment officer and fund manager Caspar
Rock
We have no particular large bets at the moment but we will have big discussions on Europe. It is
just quite a difficult environment at the moment.
Miton head of multi-asset funds David Jane
I would be very vigilant about oil, high yield and bond yields. We'll be looking at opportunities in
credit and reducing our exposure to government bonds.
Investec Asset Management multi-asset strategist and
portfolio manager Max King
Our short term plan is to cut our exposure to the dollar moderately but are still positive long term.
Fidelity Worldwide Investment multi-asset manager Nick
Peters
I'm overweight the US and Japan. That has worked so I'm taking a bit of money off the table in the
US as valuations are looking at bit less attractive.
Emerging markets are now starting to look a bit more attractive so we are reducing our
underweight.
Generally I'm optimistic - increased volatility is an opportunity.
Schroders multi-manager Robin McDonald
I'm willing to increase our exposure to European equities and Japanese equities. We do believe a
dollar bull market is going to be a theme, but as everyone thinks that, there might be a set back on
the dollar.
JP Morgan Fusion multi-manager Nicholas Roberts
The dollar has seen a big appreciation - it is up 16% since July - which is putting pressure on
emerging markets and commodities. We're overweight US equities and the US dollar, but this is a
hugely consensual trade - everyone is long the dollar - so we are comfortable in the short term but
are thinking about what to do if the dollar weakens.
Gold miners are other miners might recover, and emerging markets, though we are currently
underweight emerging markets.
We've been adding to high yield as we're seeing opportunities in energy because the market has
hedges in place for 2015. We've seen contagion in high yield [from the energy sector] which we
feel is unwarranted.
One big position we have is Japan. That is our highest conviction equity market in 2015.
City Financial multi- managers Peter Toogood and Anthony
McDonald
When we think about managers we review, its been a struggle to find value; they think
everything's expensive. There is tumbleweed [when we ask for] new ideas from managers.
There is value in emerging markets but danger too. We're being very careful in our emerging
market allocation this year because of the strong dollar - a lot of debt is classed in dollars and the
emerging markets have leveraged up to the extent that they are at the same level as the developed
world in 2008; a strong dollar is very bad news if your debt is in dollars.
F&C multi-managers Gary Potter, Rob Burdett, Anthony
Willis, Scott Spencer
Property was the hot sector of last year. It concerns us. We don't generally like bricks and mortar
property funds. They are the opposite of a strategic fund, you can't move quickly.
We're underweight US equities due to valuations. From a valuation perspective we think there are
better opportunities, for example Europe, where we are neutral but are looking at a time to go back
to overweight.
We like Asian equities over emerging market equities, as they will be a key beneficiary of falling
oil prices.
We also like Japan. Corporate japan is looking extremely good.
We have a pro dollar view - the relative strength of the US economy will be good for the rest of
the world. We expect further strengthening of the dollar.
We're starting to look at high yield as a possibility.
Henderson multi-manager James de Bunsen
I think small caps and high yield should be avoided or profits taken. We've reduced our high yield
exposure significantly over 2014 due to liquidity fears. We're in UK property instead - we're
getting a yield and it is a better place to be.
We also have higher cash than usual.
We're steering well clear of government bonds and investment grade.
We've upped our exposure to Asia and emerging markets in response to falling oil prices. We
think some concerns about China are overplayed - we don't think it will blow up.
Legal & General multi-asset manager Justin Onuekwusi
We continue to keep our funds at the upper end of the risk profiles, mainly driven by the view that
economic growth will be good and that equities are more attractive than bonds, though we are
alert to European low inflation and lack of ECB action, as well as the US cutting back on QE.
Our highest conviction play is direct property, we still think it has legs and is our diversifier. And
emerging market equities if you can take the volatility.