Top Picks of the Month – June 2021
We show here a selection of funds that might be of interest to you. They were chosen either for their outstanding performance, which is likely to continue, or for their potential for attractive returns or diversification given current and expected market conditions.
- Mixed Assets: FFG Global Flexible Sustainable
Flexible multi-asset strategy investing in equities (40% – 90%), fixed income (5% – 15%), gold (5% – 15%) and cash (max. 50%), a diversified range of often negatively correlated assets. The fund is managed by Guy Wagner since 2006, he has demonstrated his ability to generate consistent performance over the long-term while limiting downside risk. Equity risk managed via index futures to tactically protect against short-term risks such as in Q1 2020. Allocation to precious metals to hedge against financial, inflation and geopolitical risks. Currency risk hedged to maintain an exposure to the euro of at least 35%. Large and mid-cap bias mainly for equities with a quality tilt leading to a structural overweight in Consumer, Industrial, Healthcare and Technological sectors and a structural underweight in Banks, Insurance, Utilities and Commodities. Usually no corporate bonds and fixed income exposure limited to long-dated US Treasuries.
- EM Hard CCY Bonds: Vontobel Emerging Markets Debt
The fund invests primarily in hard-currency denominated bonds and other fixed or variable-rate debt instruments issued by public-sector domiciled in emerging markets. The fund can invest up to 75% in sub investment grade issuers. Off- benchmark investment include corporate issuers (max. 10%) and local currency denominated bonds (max. 10%). The fund has been badly hurt in March last year, due to significant outflows and from their country allocation (overweight in Latin America and Africa versus an underweight in Asia). This proved to be very costly in a period of dislocation. The Portfolio Manager, consistent with its contrarian investment philosophy, kept most of his conviction unchanged and even took profit from the market dislocation to increase exposure to the most valuable opportunities. It starts to pay off as the fund is up +1.6% YTD (as of 31.05.2021) vs. -1.4% for its benchmark. More importantly the fund is yielding 6.8% vs. 4.0% for a similar average rating and a lower duration which should anticipate a strong performance recovery in the next few months.