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My sweetest call: 5 wealth managers reveal top Q1 plays

A bout of volatility and the spectre of rising inflation failed to knock our readers off course in the first three months of 2018.

Rob Burgeman

Investment manager, Brewin Dolphin

'Our top call in Q1 has been to maintain our long-standing overweight position to the Asia Pacific and emerging market regions. Global volatility has increased dramatically this year from a historically low base, and the UK market has lived up to its billing as the Cruella De Vil of global equity markets and claims the wooden spoon among leading indices for the year to date.

'It is worth noting how the composition of emerging market indices has changed over the last few years. Gone are the days of state behemoths and resource companies dominating the funds. Banks are still there, of course, but the large funds tend to be dominated by new technologies, albeit that the companies themselves are hardly young upstarts. Lists tend to feature names like Tencent, Samsung Electronics, Alibaba, Taiwan Semiconductor – companies at the vanguard of the technological change sweeping the globe – alongside demographic plays like Ping An Insurance.

'With waves of uncertainty continuing to buffet more developed markets, this feels like a trade that still has some legs to it.'

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Rob Burgeman

Investment manager, Brewin Dolphin

'Our top call in Q1 has been to maintain our long-standing overweight position to the Asia Pacific and emerging market regions. Global volatility has increased dramatically this year from a historically low base, and the UK market has lived up to its billing as the Cruella De Vil of global equity markets and claims the wooden spoon among leading indices for the year to date.

'It is worth noting how the composition of emerging market indices has changed over the last few years. Gone are the days of state behemoths and resource companies dominating the funds. Banks are still there, of course, but the large funds tend to be dominated by new technologies, albeit that the companies themselves are hardly young upstarts. Lists tend to feature names like Tencent, Samsung Electronics, Alibaba, Taiwan Semiconductor – companies at the vanguard of the technological change sweeping the globe – alongside demographic plays like Ping An Insurance.

'With waves of uncertainty continuing to buffet more developed markets, this feels like a trade that still has some legs to it.'

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Thomas Watts

Investment analyst, Cumberland Place Financial Management 


‘With worries that stronger US economic data and rising inflation could trigger central banks into raising rates quicker than anticipated, our underweight duration theme has played out well.

‘Such potential for monetary tightening now seems to be a theme not only in the US but throughout the developed world, therefore G4 government bonds do not represent the most rewarding asset class in our view. In the current climate, a fixed income investor needs to be much more flexible in how they allocate capital to the asset class. 

‘We feel that opportunities can be most consistently found in the short duration credit space, with such specialist products tending to enjoy low interest rate sensitivity while still producing an attractive risk-adjusted total return. Shorter duration bonds also tend to exhibit lower default rates as opposed to longer-dated bonds, helping to preserve capital and minimise volatility.’ 

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Simon Evan-Cook

Senior investment manager, Premier Asset Management, London 


‘We don’t try to make big calls for any specific quarter, or even a year. Instead we try to work out, using various valuation metrics, what we might reasonably expect to get from a selection of funds or assets over the next few years. What then happens on a quarter-by-quarter basis is down to the whims of the market.

‘The first quarter demonstrates why we take this approach. If you had told us that volatility would spike and equities would sell off, then perhaps the very last thing we would have done would be to top up our holding in Baillie Gifford American. In fact, we might well have sold it, as we’d have been concerned that its relatively aggressive growth style, which has been doing amazingly well of late, might have meant it got whacked harder than most.

‘But as we approach the end of the first quarter, this fund is, by a country mile, our best performing open-ended fund, having generated double-digit returns when its own market is in the red. Yet another lesson that the most predictable feature of markets is their lack of predictability.’ 

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Stephanie Sotiriou

Senior investment analyst, TAM Asset Management  


‘Our top call in Q1 has been to retain our faith in quality managers through a period of increased volatility. Essentially, we took the view that the fundamentals that had driven markets higher had not materially changed, therefore our investment theses still held.

‘We took the sell-off that occurred in February as a buying opportunity to top-up positions in funds where we maintained conviction in the stock-picking abilities of our managers, as well as the growth potential of the regions they were invested in.

‘We believe more volatility could follow this year as central banks attempt to find a happy medium between inflation and interest rate policy. In market environments such as these, we believe the divergence between winners and losers will continue to grow, so we will be avoiding the rush to passives and instead, sticking with quality managers who will be able to pick out the diamonds from the rubble.’ 

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John Paul Thornber

Investment manager, Andrews Gwynne


‘Through the ages, mariners have known that when the wind changes direction a change in the weather, good or bad, is likely to follow. Naturally, if it has been calm for an age and the boat is at full sail, it may well be time to reduce exposure to the wind.

 ‘Our forecasts indicated change was inevitable, so our best call for Q1 was to remain defensively rigged with a diverse range of assets turned to the volatile wind. Clearly this meant not just equities balanced by corporate bonds, whose weathervanes are disturbingly (and disturbingly obviously) aligned but different types of sails (long/short, CTA, macro, low vol) to both catch and calm the turbulence of change.

‘Whether we now batten down the hatches, or unfurl the mainsail depends upon what comes over the horizon. However, our forecasts, and the growing murmurings in the wind, indicate reality will be different from the idealised narratives of strong synchronised global growth and surging earnings, which will likely be shown to be as mythic, if no less wonderous, than mermaids.’ 

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