The American bag is in historical maximums, is it almost immune to the macroeconomic environment?
To say that something is foreign to the macroeconomic context is a lot to say, especially in a world as volatile as the current one, not only this year but for several. Today we live with a complex type of uncertainty: they are those factors that we know, but whose impact we do not know, the calls known unknowns. That makes it difficult to build the economic context.
Thus, although effectively the S&P 500 is at historical maximums, I would not say that its companies are immune to the macro environment. But it is true that they are there because they grow. Once the short -term anxiety passes, as we saw after April, many of these companies, especially the technological ones that weigh the most in the index, continue to publish good results. Even the repatriation of benefits after the depreciation of the euro is giving them an extra, positively impacting business benefits.
Given global instability, what do you think of the defense sector? Do you feel comfortable investing in it?
From our philosophy, we always prioritize a long -term horizon and a patrimonial management that respects the investment policy of each client. As for issues such as the defense sector we believe that there is a structural effect for the public and private investment record, but much is already discounted in prices.
After consulting with managers who have been investing in Europe, many have reduced positions in defense for prudence, risk and assessment, although they previously had companies such as Rheinmetall. In addition, in defense it matters to analyze not only the demand but the ability to offer it. So, at this time, we do not see reasons to actively recommend this subject.
The retail investor is looking at the US, while the institutional goes to Europe. The IBEX 35, in addition, has had a good semester. What is your vision and how have they positioned themselves?
The important thing is to avoid short -term. Following the market usually leads to buy on peaks and sell in Panicos. There are studies that show the clear correlation between funds of funds and past yields.
That is why we maintain a global strategy, since the US remains the market with more and better companies. Given the macro uncertainty and the current risk premium, we bet on quality global companies, even if it supposes to pay something more for valuation, because they offer greater returns on the capital and visibility of less cyclical benefits.
We complement that with ideas in MID and Small Caps, and some linked to companies related to raw materials, where we see depressed assessments. Thus, we would reinforce the part of the portfolio more focused on growth titles with opportunities that can raise profitability.
How is geopolitical and legal insecurity in your decisions?
In the Investment Committee we try to base ourselves always on data. Geopolitics is not an exact fact, but raises risk premiums, which implies demanding greater returns.
In Variable Income we maintain the global strategy, but for fixed income we have been more cautious. We have reduced exposure to US debt, deriving it to Europe. As investors in euros, we prefer to assume only the risk of carrynot that of currency or American duration, especially after the deficit and fiscal stimuli in the USA. In addition, we maintain structural positions as 5% in gold, which, among others, serves as a mattress in the face of these risks.
In the short term, the market seems immune: neither wars nor debt are affecting. How much can this stage last before having to rotate portfolios?
Markets can be remained irrational longer than we can remain invested. The S&P 500 is at maximum, the risk indicators for variable income and fixed income, the VIX and the Move, in minimum, the stable type curve; Low risk premiums … is surprising with the context we live.
In the short term, this can change with the results season. In the US, the previous one was good but with little Guidance. Now that the bank to publish begins, we will have more visibility, especially about margins, which are at maximum. This is key, although many prefer to speak only of geopolitics.
Therefore, although we monitor the macro, the focus is on the growth and benefits of companies. Artificial intelligence, for example, is not even collected in global growth models, but we know it will be a relevant driver. However, the big structural problem remains indebtedness, which limits the potential growth of economies and, therefore, long -term expected returns.
Do they have direct exposure to artificial intelligence or does it cost to enter by valuations?
We receive questions about almost daily. Nvidia’s thesis, for example, is solid: monopoly in a growing market. But the valuations do not compensate for the risk.
We prefer to approach indirectly, investing in industrial companies that form the ecosystem: for example, companies that improve data centers or energy efficiency. These are not as «in price» as NVIDIA, but they have a more attractive profitability/risk binomial.
Let’s talk about debt and inflation. How do you see the inflationary scenario? What profitability is acceptable today for variable income?
Inflation is no longer the structural problem we feared. The US labor market is still strong but moderating, wages slowly go down and break-evens Five years are slightly above 2%.
Today, for conservative portfolios in euros, we can build credit combinations and 3-5 years governments that beat inflation by a point. In variable income, earnings yields They don’t look so much anymore. We believe that we must moderate expectations: we will see more in line with history, not like the double digits of the last decade.
And the risk in fixed income if the types continue to fall?
There we differentiate. The descent of types is discounted. In credit we do not see so much risk of reinvestment. Yes in monetary, so since the end of last year we advise to move positions to somewhat greater durations. The photo for a conservative inverter today is much better than before the COVID, with zero or negative types.
Finally, what great trends do you see face to the future?
For fixed income, mainly Europe, well combined between government and credit. For variable income, global wallets, little exposed to Spain directly. If Spain appears, it is because they are within European funds.
As for trends, we prioritize companies with high returns over the capital invested and less cyclicity. That weighs more than any fashion of 3-6 months. We complement with small and medium -sized companies or strategies deep valuewhere it costs to find really specialized managers, but that offer diversification against core quality growth. At the sector level, the sectors with the greatest representation are technology and health, due to their fundamental and demographic dynamics.