Inversis Banco’s Eduardo Anton sees 2013 as a year when selectors will impose stricter risk control mechanisms.
Spanish market ‘improving’
Based in Madrid, the selector is in the best position to discuss the current market sentiment in Spain.
“The four-year performance for Spanish stocks is negative and the country is in the centre of the European crisis. It is not the best market, but it is improving,” he says.
However, because Inversis is a global investor, its discretionary portfolios under management performed well in 2012, reassuring investors.
Looking ahead, Anton has some concerns. “In Europe we expect more action from the central governments and ECB where there is speculation about rate cuts,” he says. “We started the year recommending clients invest in Japanese equities and emerging market equities, especially China and Asia. In fixed income we are overweighting European investment grade, global high yield and emerging market debt in local currency,” he explains.
To find new sources of investment, Inversis mainly relies on quantitative scoring which identifies the best-performing funds in each asset class.
“As our scoring is restricted to funds included in the Morningstar database with a minimum track record of two years, we discover new ‘black pearls’ by reading specialist magazines and attending global investment forums. Here we have the opportunity to share investment ideas with other funds selectors,” he adds.
Back on risk controls, Inversis seeks managers who invest in a diversified portfolio, have liquid assets and are focused on capital preservation.
“The tools managers use to limit maximum drawdown, and if they have an independent risk-management team to monitor the portfolio, is important to us,” Anton says. “We also analyse the reputation of the asset management firm, the management team and the brokers they use.
“The strategies we are favouring for this year are fixed income, long short equities and global macro,” he adds.