After a decade of strong growth, the world finds itself 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 conflicts in the Middle East. We can say that the most useful thing is of course to diversify and be aware of the opportunities and risks that each investment brings. A diversified portfolio offers the best alternatives, and given the current uncertainty, we believe the golden age of quality investing has just begun. The quality approach can be applied to both fixed income and equities.
Were stocks the biggest surprise of 2023?
Investors trying to gauge the health of the U.S. economy have encountered mixed signals. Perhaps it’s no surprise that many investors are turning to liquidity or substitute assets, especially Treasury bills, to preserve capital. For example, many people told us that they accumulate 40% of their client portfolios in liquidity-like investments with a maturity of three to six months. While this capital preservation operation makes sense, it is time to ask whether it is still valid as we appear to be reaching final rates. The opportunity cost of not investing in such times can be high and jeopardize the portfolio in the long run.
When we think about 2024, in which assets, in which regions, in which themes can we find opportunities?
Each investor has his or her own risk profile, needs and investment horizon; For some, the short term is more important than the long term. It is important for every investor to clearly express his investment goals and know the risks and opportunities well. Both fixed income and stocks present attractive opportunities precisely because of their diversification potential.
What do you recommend for a conservative investor who wants to preserve capital and adjust risk?
High-quality fixed income as well as investable loans are interesting alternatives. Another interesting proposition is multi-sector fixed income, which are investments that can adapt quickly to seek new opportunities and reduce risks posed by evolving market conditions. These strategies seek relative value across geographic regions, sectors, issuers, and bond types to capture alpha through both a bottom-up and top-down approach. Obviously, the investor must be aware of the risks and ensure that he or she can assume them.
Can you give me two investment ideas for savers who want to incorporate the stock market?
US and global stocks offer interesting opportunities. The direction of interest rates continues to be concerning for investors. Therefore, a quality-oriented growth strategy in which you invest in companies that are resilient in times of crisis and successful in the long term is very important.
Impact investing is also attractive. Investing in mitigating the effects of climate change is not only necessary to prevent devastating effects such as water stress or biodiversity loss, it also makes economic sense in the long term. For example, the Panama Canal Authority recently announced further disruptions to ship traffic due to drought caused by El Niño, which is considered the worst in recent history.
The quality approach can be applied to both fixed income and equity
Maturity and diversification are important for building solid investment portfolios, but so is having a good financial advisor. What does a financial advisor contribute to estate planning?
A financial advisor can guide investors in making decisions by taking into account each person’s financial situation. Explain the risks and opportunities.
What does an international manager like Vontobel contribute to adding investment funds to a portfolio?
Expertise. As an active multi-boutique manager, we are positioned 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 take sustainability criteria into account when selecting assets?
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 operational processes. Many of our investment solutions focus on companies and sectors that contribute to sustainable transformation and manage associated risks. In this way, Vontobel helps create new opportunities for investors.
What do you do at Vontobel to promote financial education among your customers?
Financial education of society is key to ensuring adequate levels of well-being. As a dedicated manager, we participated in various activities at the local level at Vontobel; Among these I will highlight the following three:
In cooperation with the sector association of which we are a member and an NGO, we are participating in a program that provides basic financial education to vocational education students and provides them with the tools to make the right decisions.
Likewise, through a foundation, we collaborated in the preparation, publication and distribution of the book “Let’s Take Care of Our Planet”, which aims to bring ESG criteria and sustainable investment closer to children.
Finally, we collaborate on the broadcast of a monthly radio program focused on Financial Education, which disseminates concepts that may be useful to individual investors pursuing their investments in financial products.
Manager’s full name, headquarters and year of establishment:
Vontobel is headquartered in Zurich, Switzerland and was founded in 1924.
Assets managed globally and in Spain:
Vontobel manages approximately €220 billion worldwide. The manager has around €3,000 million in assets under management at Iberia. Data as of June 30, 2023.
Office opening date in Spain:
2012
Presence and team at national and international level:
There are six people in the Vontobel Asset Management team serving the Iberian market in Madrid. The number of Vontobel employees internationally is around 2,200.
What do they specialize in?
Vontobel Asset Management is an asset manager with global reach and a multi-boutique approach. There are specialized boutiques that offer highly competitive solutions on both fixed income and variable income. They specifically highlight capabilities in US equities, impact investing, corporate fixed income and raw materials.