There was little to no volatility for many asset classes in 2017 but, as positive macro data feeds through expectations are changing and investors expect a bumpier 2018.
So, how are fund selectors positioned for the year ahead? In this edition of ‘Selector Snapshot’, one investment professional reveals her top tips for allocations in the year ahead.
Selector: Antonia Conde
For 2018 we are positioned similarly to 2017, with a focus on developed equities. However, we are a bit cautious following a decade of markets going upwards, coupled with valuations that are not cheap.
Valuations are very much in line with the market price or company valuations. We see a short/low potential for the market to continue to go upwards.
All of the macro activity worldwide is very good, in fact, it’s the best since 2006/2007 even though the situation is a lot better for corporates.
The macro is positive, the corporate data is positive, but valuations are not attractive. We are cautious because of the valuations side, we would rather be a little less invested. We will wait for some volatility to come and for better opportunities.
One of our biggest challenges is to analyse and select the right asset manager for specific asset classes. At the end of the day, every asset manager has expertise in different asset classes, so the challenge is to differentiate between them.
It’s key for us to follow up on every instrument and product we select, it’s just not sufficient that the product is good when we first select it, we have to conduct proper follow-ups of its performance.
We could have been more overweight equities last year. If we could go back to January 2017 then we would probably put more weight on equities. We were very underweight the US dollar, which worked very well for us.
We were also very underweight fixed income as a whole and didn’t have anything in long duration. From an asset class perspective, we were very comfortable with the positions we had in 2017, but we could have been more aggressive than we were.