Large fund managers have different views on where investment should be concentrated
The encouraging news about the vaccines and their upcoming distribution herald the end of the pandemic.
It is time, therefore, to reposition the portfolios in this new situation, but the great fund managers do not agree on how to do it.
Thus, in the first place, JP Morgan Asset Management does not focus so much on the region where the investor can position itself, but rather is in favor of buying shares in travel companies, airlines and hotels , precisely the sectors that suffered the most with the coronavirus, regardless of the country.
“Rotation in the equities sector could dominate investor discussion in the coming months,” says Tai Hui, Asia market strategist at JP Morgan.
“We believe that investors may seek to diversify their allocations to take advantage of potential good news about vaccine development,” he explains.
Three regions with great investment potential.For its part, Fidelity’s multi-asset team puts more focus on the region that may be a winner after Covid. He believes that now is the time to put on more weight in regions like Europe that are severely affected by the virus, betting that they will improve thanks to the vaccine.
For the manager, Europe would fall into that category because in the region the virus evolved with great violence. But with the news of the vaccine, European equities, on average, have risen more than 7% since November 9.
Instead, Franklin Templeton argues that it is still too early to move away from places like Asia that handled the crisis better.
Stephen Dover, Franklin Templeton’s chief equity officer, believes there are still months at least before any vaccine can be widely deployed, and that means Asian stocks are still the place to be.
The reason is that “Asia can benefit from being able to function fully economically while the West awaits full vaccines,” he says.
As for US equities, they hit new highs on Tuesday with the Dow Jones climbing above 30,000 points for the first time. Global stocks are poised to deliver the best November performance in their history, while Asian stocks are on track for the best gains since 2009 this month.
All in all, there is a general opinion that the markets are being very optimistic. “We think the markets are too optimistic about the speed of a global vaccine launch,” explains Ross Cameron of Northcape Capital in Tokyo.
“It will take a lot of time and money” to vaccinate the entire population, warns Cameron.