Fund selectors face an overwhelming challenge due to the sheer amount of new strategies launched on a daily basis, Inversis Bank’s CEO Guendalina Bolis has said.
Bolis told Citywire Selector there are a few steps selectors can take to avoid being caught out by new releases.
'My suggestion is to stick to the strategy you perfectly understand, no matter who is the portfolio manager and the previous experience he/she might have.
'Stick to your selection process and results will come without taking too many risks,' she said.
Bolis is currently seeking de-correlated alpha sources and the application of the correct mix between active and passive strategies, especially against a tough regulatory backdrop.
'Due to MiFID II requirements, it’s important to pay attention to costs. In Spain, 2018 will probably be the year in which ETFs will have a huge increase in assets.
'This is due to a fiscal change in the Spanish regulation that will allow ETFs to have the same fiscal facility that active funds currently have.’
Despite a positive outlook for passive instruments, Bolis said she wished she had not been underweight US equities in 2017.
'No one in the market was excepting such brilliant returns on the US market. The industry was doubting Trump’s ability to accomplish policies with his political program and to implement his reforms.
'Moreover, in the first part of the year we were expecting the euro/dollar exchange to reach parity, we were clearly wrong on this call too,' she added.