Stock and bonds linked to inflation. These are the two pillars on which the managers' investment recommendations pivot for the year 2020. It has been revealed in the fourth edition of MarketWatch, a round table organized by Bolsamanía and Banca March with experts from different frontline investment firms. As for Wall Street, they predict less potential than in the last decade, although it will still be present in the portfolios.
As in previous years, the premise will remain "Know your risk profile and invest in the long term", says Íñigo Colomo, Investment Director of March Asset Management. More specifically, it recommends looking at markets from the perspective of the Global equities: "It is the best way to diversify risk and to have access to various sources of growth."
In equities, North American parquets will continue to have prominence in portfolios, although Europe, for the first time in many years, eats ground in forecasts. “We remain positive with Wall Street. It is true that we see less potential, but we do not go out, ” recognizes Iciar Puell, equity manager at Bankia Asset Management. This expert is concerned that the US stock market has risen a lot, but the counterpart is that technology companies, which agglutinate much of the capitalization of Wall Street, serve as support and their profits will continue to grow.
As for European parks, "they have lagged much behind this year, except for values such as Iberdrola or Cellnex in Spain, which have run a lot because of investors' emphasis on looking for quality, and that is why they can be a greater opportunity" . "It is a market with value," defends Bankia AM's expert, and leaves the door open for the Ibex to give "positive surprises" because, taken together, it is "very cheap." In this line moves Fidelity. Its general director for Spain and Portugal, Sebastián Velasco, confirms that, in equities, the firm has gone “from neutral to neutral-plus” and that they prefer European stocks to American ones.
Julius Baer expects that, in equities, the cyclical sectors will continue to behave well, “also highlighting the technology sector,” and its Director of Portfolio Management, Almudena Benedit, says that, in the last month, they have slightly overweight the ‘value’ sector because, “probably, in the coming months it will behave better than we have seen in recent years” And there may be an investment opportunity. In any case, he points out, “we will have to do more active management than in 2019”.
WILL THERE finally be INFLATION?
During the last decade, central banks have put the seeds needed for inflation to germinate with their ultra-expanding policies, but this has not yet reached the levels required by experts, especially in Europe. However, Fidelity is optimistic in this regard and adventure that, in 2020, “we will have to talk about inflation” and, consequently, recommend buying inflation-linked bonds, because “the 'break even' with which they are valuing is relatively low. ”
A niche of debt for next year where Fidelity and Julius Baer coincide are emerging bonds. More controversy, however, generates global credit. “The value of credit at the aggregate level is very small, there are only specific opportunities,” according to Fernando Aguado, director of Investments at Fonditel, who looks favorably on structured portfolios with fixed income at maturity and with credit with a very limited duration.
Within private fixed income, Bankia AM opts for bonds with investment grade, while Julius Baer sees it appropriate to make investments in ‘high yield’, in the range of BB.
After an exceptional 2019 for the markets, where all the assets have closed in green, investors should change their mentality by 2020. “Customers have to lower their level of expectations, this year they have taken future returns in advance ”, says Aguado, of Fonditel, more likely not to add extra risk in the portfolios, but to “manage the risk differently”, with themes and Megatrends such as demography or the green revolution.
For investors who, in a year predictably more volatile than the one that has just closed, seek simplicity, a low price and delegate management in a single product to professionals, Francisco Quintana, director of Investment Strategy of ING, has a formula of success: passive management. "Our bet goes through diversification without tactical adjustments, with the autopilot on and at the lowest possible cost", asserts
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