2023-12-29 10:58:24
After a decade of robust growth, the world is in an economic environment vulnerable to inflation and geopolitical risks, as seen during and after the covid-19 pandemic, the war in Ukraine and the recent conflict in the Middle East. We could say that what works best is diversification, of course, and being very aware of the opportunities and risks that each investment entails. A diversified portfolio offers the best alternatives, and given the current uncertainty we believe, even more so, that the golden age of quality investment has just begun. A quality approach can be applied to both fixed and variable income.
Has variable income been the big surprise this year 2023?
Investors looking to gauge the state of the US economy have faced mixed signals. It is perhaps not surprising, then, that many investors have turned to liquidity, or the assets that replace it, especially Treasury bills, to protect capital. For example, many have told us that they have accumulated 40% of their client portfolios in cash-like investments with maturities of three to six months. While this capital preservation operation has made sense, it is time to question whether it remains valid as we seem to be reaching the final rates. At these times, the opportunity cost of not investing can be high and compromise the portfolio over the long term.
Thinking about 2024, in which assets, in which regions and in which topics can we find opportunities?
Each investor has their own risk profile, needs and investment horizons, for some the short term is more important than the long term. It is important for each investor to be clear about their investment objectives and to be well aware of the risks and opportunities. Both fixed income and variable income offer attractive opportunities, precisely because of their diversification potential.
For a conservative investor, who seeks to preserve capital and adjust the risk, what do you propose?
High quality fixed income and also investment grade credit are interesting alternatives. Another interesting proposal is multi-sector fixed income, which are investments capable of adjusting quickly to look for new opportunities and mitigate the risks generated by the evolution of market conditions. These strategies look for relative value across geographies, sectors, issuers and bond types, with the intent of achieving alpha from both a bottom-up and top-down approach. Obviously, the investor must be aware of the risks and make sure that he is able to take them.
And for that saver who wants to incorporate stock market, could you give me two investment ideas?
US and global equities offer interesting opportunities. The direction of interest rates remains a worrying factor for investors. Therefore, a growth strategy based on quality, where you invest in companies that are resilient in times of recession and successful in the long term, is very important.
Impact investing is also attractive. Investing to mitigate the effects of climate change is not only necessary to prevent its catastrophic effect – water stress or biodiversity loss – to name a few, but also makes long-term economic sense. For example, the Panama Canal Authority has recently announced further cuts in ship traffic due to the drought caused by El Niño, which is considered the worst in recent history.
“A quality approach can be applied to both fixed income and variable income”
Timing and diversification are important to build solid investment portfolios, but so is having a good financial advisor. What does a financial advisor bring to estate planning?
The financial advisor can guide investors in making decisions, taking into account each person’s financial situation. Explain the risks and opportunities.
What is the benefit of incorporating investment funds from an international manager like Vontobel into a portfolio?
specialization As an active and multi-boutique manager, we are in a position to offer fixed income, variable income and multi-asset investment solutions. We are organized into six independent boutiques, each with its own investment philosophy.
As a manager, do you incorporate sustainability criteria into asset selection?
Yes. As a global investment firm, Vontobel plays a responsible and active role in the sustainable transformation of our society and economy. This is reflected in our governance, investment philosophy and operating processes. Many of our investment solutions focus on companies and sectors that contribute to sustainable transformation and manage the associated risks. In this way, Vontobel helps create new opportunities for investors.
From Vontobel, what are you doing to promote financial education among your customers?
The financial education of society is key to ensuring an adequate level of prosperity. As a committed manager, from Vontobel we have participated at a local level in various activities, among which I would highlight the following three:
Together with the sector association of which we are a part, and in collaboration with an NGO, we participate in a program that imparts basic financial education to VET students to equip them with tools that allow them to make appropriate decisions .
Likewise, and with the help of a foundation, we have collaborated in the preparation, publication and distribution of the book Cuidemos de nuestro planeta, which aims to bring ESG criteria and sustainable investment closer to the children’s public.
Finally, on a monthly basis, we collaborate in the broadcast of a radio program focused on Financial Education in which we disclose concepts that may be useful to private investors who maintain investments in financial products.
Full name of the manager, headquarters and year of creation:
Vontobel is headquartered in Zurich, Switzerland and was founded in 1924.
Assets managed globally and in Spain:
Globally, Vontobel manages approximately €220 billion.
In Iberia, the manager has assets under management of approximately 3,000 million euros. Data as of June 30, 2023.
Date of opening of office in Spain:
2012
Presence and team at national and international level:
The Vontobel Asset Management team in Madrid that serves the Iberian market has six people. Internationally, the number of Vontobel employees is around 2,200.
What they specialize in:
Vontobel Asset Management is an asset manager with a global reach and a multi-boutique approach. It has boutiques specializing in very competitive fixed income and variable income solutions. Specifically, capabilities in North American equities, impact investing, corporate fixed income and commodities stand out.
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