At the 14th Investment Forum of Luxembourg-based life insurance specialist OneLife, global equity funds were the most popular. Bond funds seem to have fallen out of favour.
The forum was held over two days for a (limited) live audience while absentees could follow the event at home via streaming. This edition brought together quite a few fund managers who mainly exchanged investment ideas and insights. And equities received a lot of attention anyway.
What about the economy?
During the Investment Forum, three debates took place, focusing on the macroeconomic situation and how to respond to the current circumstances as an investor. The usual topics were covered, namely the strong economic recovery, low interest rates, inflation fears and overheating in some segments of the markets.
Eric Pas, sales director at Flossbach Von Storch Invest, said he was not worried about rising interest rates and referred to Japan, where they had been low for more than 20 years. “Interest rates will remain low forever because there is no way back for central banks and governments.” Tom Vermeulen, Executive Director at J.P.Morgan Asset Management, is not worried about the inflation ghost. “The current peak will level out because there is no overheating of the economy at the moment.”
Peter Jansen, sales manager at La Financière de l’Echiquier, took a different tack, pointing out that the pandemic has accelerated certain trends and we are clearly not going to go back to our old habits. “Offices are not disappearing, but they are being redefined, and the impact of accelerated digitalisation will be even greater. The fact that the Investment Forum has a hybrid structure with both a live and a streaming version is the best proof of this,” he underlined.
Stacey Notteboom, sales director at M&G Investments, on the other hand, is nervous about the current complacency among investors. “Not being prepared for the correction that will eventually happen is the biggest danger today,” he said. “So building a buffer into the portfolio is not a luxury.”
What to invest in?
During the debates, the various professionals from the fund industry were given the necessary time to express their investment ideas. And every type of investor will have found something to his liking. JP Morgan Asset Management today, given the low interest rates on bonds, is mainly looking at global and Chinese companies to generate returns in the coming years.
To this end, the institution highlighted its Global Focus and China Equity funds. With these funds, it can play on themes, sectors and regions that are the most interesting within the universe.
Today, M&G is looking mainly at infrastructure. It is a way of hedging against the possible arrival of inflation. At Ofi Management, they want to do this in a different way: through precious metals and not only gold and silver, but also palladium and platinum.
The fund manager also emphasised that all these metals will benefit fully from the ongoing energy transition because new technologies will use more precious metals. Sogenial Immobilier, which specialises in real estate, added that, however difficult this asset class has been over the past 18 months, real estate now belongs more than ever in any portfolio.
For Flossbach von Storch, it is now a matter of investing in quality companies that generate a predictable cash flow, and not forgetting gold as a hedge if the market goes off course. Not coincidentally, this is the strategy of the group’s flagship fund, FvS Multiple Opportunities.
La Financière de l’Echiquier also continues to go for shares but does not want to follow the well-trodden paths. With the Echiquier World Next Leaders fund, for example, it is looking in the universe of medium-sized companies for the potential leaders of tomorrow: a subsegment where there is still a lot of potential to be found.
Investment insights and trends
During the two days, OneLife introduced a new feature (which clearly appealed to the audience of mostly brokers): the Fund Pitches. A fund issuer had five minutes to present an interesting fund from its range and why it should be included in a diversified portfolio.
It was noticeable that various fund houses put forward compartments with a focus on global equities, such as the Fidelity World Fund, MainFirst Global Equities, Oddo BHF Polaris Flexible and Rothschild with its R-co Valor, but also growth funds such as Carmignac China New Economy received the necessary attention.
Thematic investing also received due attention with the Pictet Global Megatrends Selection and the Thematics Meta Fund from Natixis Investments. Bond funds were hardly mentioned, with the exception of Lazard, which presented its Credit Opportunities.
Even Pimco, the bond specialist par excellence, put forward a diversified equity fund, namely Pimco GIS StocksPlus Fund.