Asset Allocation

Looking for companies that can contribute to the decarbonisation of the European economy. That’s the mission of Echiquier Climate Impact Europe, a new impact fund of la Financière de L’Echiquier (LFDE). Remarkably, the fund mostly invests in established European companies.

Positive returns on investment-grade bonds have been hard to come by in the West. The Nordic market is one of the few exceptions, says Michael Weidner, head of European fixed income for global asset manager Lazard Asset Management. He especially likes Danish mortgage bonds.

‘Nordic bonds are a market segment with high credit quality, high liquidity and some extra yield without additional risk,’ he says. For Weidner, this market is one of the ultimate safe havens for risk-sensitive bond investors.

Disruption is wiping out entire sectors and companies. While winners are hard to predict, using megatrends such as digitalisation and ageing to identify the losers in advance is the best approach, says Henk Grootveld, head of trend investing at Lombard Odier IM.

Emerging market debt is perfectly placed to benefit from the economic recovery that will follow the current lockdowns. Especially local high-yield bonds are in a sweet spot, says Capital Group’s Luis Freitas De Oliveira.

Dividends paid by European companies on an underlying basis have sunk by more than 28% in 2020 to €141 billion, according to the Janus Henderson Global Dividend Index. This is the lowest figure since 2009.

Expensive US growth stocks need not suffer from reflation and rising interest rates. On the contrary, they will thrive thanks to their pricing power, says Ton Wijsman, senior portfolio manager at AllianceBernstein and former director at W.P. Stewart.

Carmignac says all lights are green for an investment in emerging markets. The weakening dollar and the rapid recovery of economies mean increasing your allocation to EM equities and bonds is a must.

When Tesla’s annual report was released on Monday, it stated that the firm had bought $1.5 billion in bitcoin and that it wants to expand this position. This seems a strange move for an electric car producer, but Elon Musk regularly tweets about bitcoin and the digital currency dogecoin.

The UK equity market has been underperforming ever since the Brexit year of 2016. Now that Brexit is finally behind us, is this the moment for the asset class to shine again?

Strong inflows into clean energy ETFs have pushed valuations of the various subsectors higher. To mitigate downside risks, a broader perspective on the sustainability theme is needed. Semiconductor manufacturers in particular are interesting, says Thiemo Lang, manager of the RobecoSAM Smart Energy Fund.