In the current context, how are you adjusting the mixed fund strategy? Are you adopting a more defensive bias or do you see room to increase portfolio risk?
We believe that the current environment is still one of proactive riskand that is how we have been positioned since before the summer.
In the end what we are seeing after a very turbulent yearthe first quarter we had the whole defense spending announcement thing in Europe, which led to a strong rise in variable income, a rebound in bonds, there were strong falls in fixed income; and then the topic of the year has been the topic of tariffs, the tariff war. All of this has caused us to see a very turbulent year and we, already at the end of April or at the beginning of May, positioned ourselves a little against the market because we thought that the real impact of the rates was not going to be as relevant as it was stated at that time in price, there we took a more pro-risk approach to the portfolios. And this confirmation of the American growth resilience We are seeing it until the last few months.
In the end we are seeing that Companies and households have very healthy balance sheetsprofit growth continues to be very solid; and all this is supporting the good investment data, the good employment data. So in the end we are still in a fairly risk-friendly environment.
Yes, it is true that seeing the good year we have had we are gradually establishing slightly more defensive positions so to speak, but we are still overweight in risk assets. Therefore, we do think that it is still a favorable environment.
After the strong rebound in fixed income in the last year, where do you currently find the greatest attraction: in duration and credit, or in certain segments of variable income? How do you balance that binomial within mixed funds?
It is true that right now the environment is not easy because on the variable income side we see positive things, we believe that we are in a favorable environmentwe are in a monetary cycle that favors equities, we are still seeing profits with double-digit growth and with companies with little leverage. With which, It is a favorable environment for equities, but at the same time in corporate bonds we see returns of 3% or 4% in euros, with companies, as I say, very healthy.. Therefore, it also has its appeal, we are even seeing that in parts of the American curve, in duration, we still have a favorable bias, so I am saying, we have entered a monetary cycle now in the United States of rate cuts, which favors the asset.
And I believe that these are the advantages of mixed fundsthat in the end we can take advantage of the potential they offer for profitability and diversification of many assets; For example, we have had gold in our portfolios for a couple of years, because in the end we know that it has a very good diversifying and protective nature in certain environments, as we are seeing this year.
These are the things that we value with mixed funds. With which, in the end We have a fairly balanced portfolio and trying to take advantage of all the virtues of all the assets we have in our possession.
Mixed funds allow flexible and adaptable management. What recent tactical moves have you made to take advantage of market opportunities? Are you taking advantage of volatility to reposition portfolios?
Lately we are not making very relevant changes. We follow overweight US equitieswe follow slightly overweight duration of government, both American and European. And where we have the most conviction for, as I say, several months now, is in the high yieldlos high yield bonds that we called, which has had a spectacular year and we believe that its environment is still very favorable.
As I say, what we are perhaps taking advantage of these last few weeks, where we are seeing historical highs again in the stock market It is to take coverage with derivatives, another of the virtues that we have in mixed funds, perhaps to protect a little the good performance at the end of the year; although as I say, we still have a positive vision of the environment.
Beyond the short term, what role do alternative assets, structural themes or ESG management play in your mixed funds? Do you think that investors today better understand the importance of maintaining diversified and consistent portfolios throughout the cycle?
A very important thing that we have seen in recent years has been a great learning and knowledge of what mixed funds are.
In the end these funds They were created to meet a need Among everything, he was an investor who trusted more in the stock market or was prepared for volatility such as profitability markets and what there was, the typical Spanish investor who in the end is the one who is in deposits; and the mixed fund was created to cover that need. 15 years ago, there were practically no mixed funds in Spain, it was a very local product where all the potential that existed in the investment universe that we have was not used and in recent years they have already been created.
We have mixed funds, but the industry has grown a lot in Spain and Very global, very diversified portfolios have been created, taking advantage, as I say, of all the potential of the vast investment universe that we have.. And within this, more and more better funds have been created, from my point of view, or more complete, one of the assets that is entering in recent years, so to speak, are private assets, both the private equity as the part of private creditwhich is an asset that is well used offers a very good diversification and profitability character. Although it is important to make a little distinction between the wheat and the chaff because it is true that there has been a very strong boom in these products and we are fortunate to be able to take advantage of the great team we have of internal selectors in Santander to be able, as I say, to select the strategies that have more potential or more capacity to add value to mixed funds.