Asset Allocation

Keith Ney of Carmignac has said stock markets are still in a favourable climate. China remains an interesting country in which to invest, both for equities and bonds.

Ney joined the Strategic Investment Committee of Carmignac in April 2021. He has developed particular expertise in bonds and their place in a portfolio. His long career with the French manager has given him expertise in both equities and bonds. In addition to his role on the committee, he is direct co-manager of the Carmignac Patrimoine Europe fund.

“It is no secret that we at BlackRock have embraced sustainability rather late. The turnaround came with top executive Larry Fink’s letters to shareholders about creating long-term value, then purpose, and then sustainability in 2020.

Every day, Natixis IM’s head of multi asset James Beaumont and his team wonder how much higher the equity markets can go. Yet, according to him, the issue that is keeping multi asset investors awake at the moment is something else. What should they do with government bonds? 

Industrial, technology and healthcare stocks now offer a good mix between yield and defensive characteristics. China is undergoing an intensive reform phase, moving from “the end of poverty” to “common prosperity”. This offers opportunities for investors, as the country is a long-term challenge. However, investors have quickly priced in the uncertainty surrounding the regulations.

Contrary to what many central bankers and economists expect, “supply chain disruptions” are still ubiquitous. Indeed, a quick glance at delivery times, inventories and freight costs shows that supply chain disruptions are getting worse rather than less. That could put an end, at least temporarily, to the equity rally, has written Jeroen Blokland, multi-asset specialist and founder of the research platform True Insights, in his first weekly contribution to Fondsnieuws, Investment Officer Luxembourg’s sister publication. 

An active fund that mainly invests in green and social bonds from emerging markets was not available until last month, when the BlackRock Emerging Markets Impact Bond Fund was launched. The new fund is one of the first two EMD funds with an Article 9 rating under the SFDR. 

Accommodative central bank policy, an ageing Europe and the exorbitant increase in debts make interest rate hikes in Europe extremely unlikely in the short term. This increases the risk of negatively-yielding bond portfolios for pension funds and insurers. Fondsnieuws, Investment Officer Luxembourg’s Dutch-language sister publication, asked three investment specialists for their views.

A study by a group of researchers from Ghent University shows that the sentiment of the coverage in Fondsnieuws (Investment Officer Luxembourg’s sister Dutch sister publication, along with Investment Officer Belgium) positively correlates with market returns. From this the researchers conclude that the journalistic work of Fondsnieuws has a certain predictive value for future stock market performance.

“As corporate profits are rising much faster than expected, high valuations in the equity market are falling fast. Equities therefore remain attractive,” said Natasha Ebtehadj, global equities portfolio manager at Columbia Threadneedle, in a recent conversation with Fondsnieuws, Investment Officer Luxembourg’s sister publication.

“The relative performance of emerging markets versus developed markets is in cycles. At the moment we are in a downward cycle. Today almost everyone is negative, but certainly in China there are companies with huge cash flows that are very innovative and offer opportunities for an active manager,” said Gino Delaere (photo), emerging markets specialist and fund manager at Econopolis, from Singapore, where he has been living and working for years.