Give me value for money, says Invesco’s top selector

Top French selector Bernard Aybran of Invesco says he is focusing his assets on value managers and boutique-styled firms as he positions his portfolios to take advantage of current volatility.

The firm’s head of multi-management, speaking exclusively to Citywire Global at his offices in Paris, said that while he is protecting his assets he is also keen to get back into some badly hit markets.

‘I want to come back to Eurozone equity,’ said Aybran. ‘The valuations have reached levels I have not seen for a long time. I will wait until there is a bit more stability but there is huge potential in this asset class.'

‘I also want to return to certain emerging markets that have been badly hit recently like South Korea. Latin America is another place I am looking at, especially Brazil as it has had one of the worst years in a while and the valuations are really worth taking a look at.’

Among the stock pickers he said he has strengthened his position in is Robrecht Wouters who runs the JO Hambro European Select Values. He has also been impressed with how well the Allianz Europe Equity Growth fund, the Mandarine Opportunités fund, run by boutique manager Joëlle Morlet-Selmer, and the Comgest Europe fund have held up in the past volatile weeks.

‘I don’t expect a manager to predict the future, they never have. But what I will expect is for them to be able to explain to me why they have made certain decisions.'

'How are they reacting? Are they capable of taking their profits and investing them elsewhere? I need to be convinced they are not simply selling because they are tired. I need to be sure how and why they are doing things.’

Unlike fellow French selector Jacques Tebeka of EDRIM who has maxed out his cash exposure, Aybran has opted to limit his funds’ liquidity levels.

‘I am not at my maximum cash level, currently I’m about half my cash potential. The reason behind this decision not to max out is because I think that the market has dropped too quickly. Looking at it today there is such volatility that we deserve to see an upward reaction.’

Within his fixed income portfolio, Aybran said he has flushed out his exposure to European bonds and gone instead for a pure German bond approach. He has also been steadily increasing his exposure to two key funds, the M&G Optimal Income fund and Bill Gross’ flagship fund PIMCO Total Return Bond.

While he has reduced his exposure to EM debt following the emergence of cracks in this sector during the summer's strong outflows, he is still invested through the Eurizon Stars Emerging Bond Total Return fund and the Schroders emerging market debt total return fund, with the former producing consistent results over the last ten years. He has also lowered his exposure to other riskier assets such as high yield and local currencies.

For Aybran, a fund’s AUM has become an increasingly important indicator as it he believes it can act as a potential red flag and help him interpret what is happening in the market place.