As investors grow in confidence and move back into riskier asset classes, what strategies are fund selectors using to get an edge over the market?
As investors grow in confidence and move back into riskier asset classes, what strategies are fund selectors using to get an edge over the market?
Earlier this year, I headed down south for Citywire’s sixth annual Miami Retreat. Although the year started on a hesitant note, investors appear to be more confident in the outlook for global markets and are returning to risk assets.
I sat down with a handful of the fund selectors attending our event – which totalled over 120 delegates this year – to learn more about what strategies they have adopted within their client portfolios and whether they too are turning to riskier investments.
After the main event wrapped up, I caught up with Luis Requesens, managing partner at Andes Wealth Management in Argentina. He highlighted that after the Fed’s decision to hold off raising rates, investors seem to have more confidence in the outlook for global markets and are returning to risk assets.
He’s worried that a difficult Brexit or errors in timing from the Fed could accelerate a recession in major developed countries. Therefore, it is necessary for investors to prepare for any outcome.
‘A barbell between risk free and equities seems to be the best combination within client portfolios,’ he said.
With regard to low-risk investments, Requesens prefers US Treasuries short duration to minimize his credit risk. When it comes to riskier bets, he prefers shares of companies embedded in global trends.
‘In general, the population of older adults is growing and getting richer. The segments that we see as more attractive are insurance companies, medical device companies and biotechnology laboratories.’
Requesens noted that the global cycle has deteriorated and this year it will be more difficult to find growth.
‘We are prepared for lower yields due to lower growth with a low probability of a recession this year. We believe that companies that are embedded in long-term trends are prepared to better navigate this volatile scenario.’
This article originally appeared in the April 2019 edition of Citywire Americas magazine by Raj Dhaliwal
