Asset Classes
Decisions, decisions
Stock markets and global economies are giving investors
enough of the right signals to allow them to make positive
investment decisions. For the time being there are enough
indicators for most professional investors to make firm
asset allocation decisions.
One disadvantage of all this choice is that it
necessarily takes longer to make a decision, and
it is possible to come up with too many options.
Some portfolio managers are also hedging their bets
as can be seen by how they treat fixed income allocation.
The biggest selling sector of 2009, corporate bonds, has
been replaced by strategic bonds, indicating that investors
like the fixed income story but would prefer to outsource
the actual sub-asset class investment decision.
■ The top selling IMA sector in February was £ Strategic
Bond, with net retail sales of £278m, the first time
it has been the top sector since April 2008.
■ The lowest selling IMA sector in February was
£ Corporate Bond, with net retail outflows of £140m.
■ By comparison, in February last year £ Corporate
Bond was the highest selling IMA sector and was
for ten consecutive months from November 2008
to August 2009.
Source: Investment Management Association
In this section…
Equities
EUROPE 49-51
“Investing in Europe needs to
consider that it is effectively
divided into three distinct
economic and market blocs,
between developed, developing
and struggling areas”
David Burrows asks whether it is
right to look at Europe as a single,
homogenous investment area
The contrarian
VALUE INVESTING 46-47
“The important intellectual
distinction is not between value
and growth styles but between
value and momentum” Neal
Underwood writes that the value
manager is due a comeback as
markets return to being driven
by fundamentals, although there
are some who argue that value
investing never really went out
of fashion
Fixed income
STRATEGIC BOND FUNDS
52-53
“A strategic bond fund gives
fund managers the flexibility
to be able to respond to
changes and offers a good
choice in these uncertain
times” Investors are paying
greater attention to strategic bonds
as a way of outsourcing their own
fixed income asset allocation,
says Bambos Hambi
MAY 2010 [www.portfolio-adviser.com] PORTFOLIO ADVISER
45
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