We have many fronts open at the moment, but the focus is on the elections. In this regard, how do you think the results will affect the markets?
Honestly, we don’t give it much importance. The management and advisory team, which is in contact with the bankers, wants to convey peace of mind. If we look at it from a historical point of view, the elections have not had a negative effect on corporate profits. This is ultimately what moves the prices of companies and indices, and it is what all investors should focus on, so that it doesn’t move the needle. status quo Politics is difficult to change for better or worse, but that creates stability when it comes to creating long-term value and that is what we ultimately need as investors.
Regarding the rate cuts, what is your feeling about the market?
Always in the morning meetings and committees talk about how it seems that the rates have reached their ceiling, little by little these drops will occur, but it is true that the central banks are also there data dependentso it’s a bit of a difficult equation to figure out. How fast are they going to be and how aggressive? I think they’ll continue in that data dependent because most likely they don’t even know it themselves.
In the current environment, what are your investment ideas?
The team that is finding many opportunities in fixed income. The truth is that we knew how to take advantage of the increase in spreads in hybrid bonds, they were right and that was reflected in the price, not only in corporate hybrid bonds, but also in the subordinated financial part. Then, in variable income, it is true that we would be a little more cautious, we are prudent, even so we have a beta practically one with the market, so we don’t mind leaving ourselves a little overweight so that at some point we can continue loading up if the market corrects a little.
How are you positioning customers?
We try to get clients to follow the advice of their bankers, especially in the advised portfolios, and then in the managed portfolios we try to convey the point of view of our in-house strategy. We are trying to get our clients to get out of money market bonds a little, to take them a little longer on the curve, but also not to take on too much duration, because we believe that all that money that has entered money market bonds should really move towards bonds with a little more duration to capture those returns and secure them. In the end, money market bonds find that the moment rates start to fall, they also lose profitability. So we want to convey that, hey, for a conservative investor it may be a good time to extend the duration a little.
What would be the requirements for a strategy to incorporate into a portfolio?
We always have an internal debate there, each one has his own way of working, there are three of us in the team and all decisions are consensual. What I like are managers who, wherever they have been, because in the end managers come and go from funds, have done especially well with a certain recurrence. And this, I think for me, is the litmus test. Those who have historically done well will most likely do so in the future, then you also have to keep getting your hands dirty, but it is a good initial filter to rule out managers who have not had recurrence. And another trait that I like to see in managers is that they are good. stock pickerI don’t like managers who base their returns on how much they are right about being more or less in a sector. For me that is more luck, if I want to call it that, than expertise. When it comes to selecting companies, there is only, or very probably in the long term, expertise.
Source: www.vozpopuli.com
