The handles for building a solid portfolio in times of rapid change

Javier Dorado expects that in 2025 «ETFs (especially actively managed ones) “continue the strong growth trend we have seen in 2024.” On the other hand, “the progressive democratization of alternative assets that we have seen in recent years is here to stay, it is an asset class that acts as a great diversifier and investors continue to have an insufficient allocation in their portfolios, so We expect this asset class to continue growing in 2025 and beyond,” he adds. Remember that in an environment of falling rates, the main challenge for the industry will be the transfer of investor positions from deposits and other liquidity assets to riskier products that can beat inflation and thus avoid the loss of purchasing power. . “There are numerous interesting investment opportunities in various asset classes, and the most important thing is to continue building diversified portfolios to achieve the financial objectives that each person establishes within the time horizon that they determine,” says Dorado. He also points out that in the markets, the keys will be the same as in 2024: “growth/economic cycle, inflation and central banks.” From this manager they expect global economic growth slightly below trend, inflation to remain low and central banks to continue lowering interest rates.

Carolos González Ramos, director of investor relations, marketing and communication at Cobas AM

Carlos González Ramos considers that throughout 2024 the financial markets are behaving positively, obtaining double-digit returns in most stock markets, “although it is true that they have experienced significant volatility due to several factors: political uncertainty, persistent inflation and restrictive monetary policies. This situation has led to a revaluation of assets, highlighting depletion of growth and attractiveness of value. “This change in investment preferences reflects a market adaptation to the new economic reality, where the search for value and stability becomes more prominent in the face of volatility and perceived risk in growth stocks.” “The next few years could be the years where value investing shines again,” he emphasizes. “Faced with a stabilization or drop in interest rates, companies with good fundamentals, competitive advantages, solid balance sheets, little or no debt, among other factors, could find their moment,” he argues. Spots opportunities in the energy sector with exposure to infrastructure related to liquefied natural gas, oil and gas producers and services; and in defensive assets that in uncertain environments have a high probability of maintaining their benefits and even increasing them “such as the pharmaceutical, aerodefense and residential-education sectors, among others.

Arantxa López Chicote, head of product, market and digital intelligence at Santander AM

Arantxa López Chicote defines 2024 as a great year for the investment fund industry in Spain. «In the first ten months the assets have grown by around 45,000 million euros, practically half due to the entry of new capital and the other half due to positive returns from the funds given the good performance of the markets”, stands out. Looking ahead to 2025, he continues to see profitability and opportunities in the most conservative funds, although at lower levels than this year. Taking into account the forecast of lower rates, which “highlights other types of strategies”, he believes that funds will continue to be one of the best alternatives to invest savings in the medium and long term, “diversifying in different types of assets and geographies,” he highlights.

This expert considers that the prospects point to a growing trend of this industry towards private markets through strategies suitable not only for the professional client but also for the retailer under certain requirements. «We are moving towards an industry with greater controls and levels of protection for the investor, but also full of opportunities that make it accessible to any type of investor, always better thanks to delegated management through portfolio management mandates, which are emerging as one of the best investment services,” points out López Chicote.

Alfonso del Moral, head of T. Rowe Price for Iberia

In 2024, T. Rowe Price has seen a lot of client interest in American equities, and within this segment, ‘small caps’ stand out. «The story right now is very attractive, especially due to a valuation issue, price. Small American companies have borne the brunt of the risk aversion of recent years, and are now trading at a historically wide valuation discount,” explains Alfonso del Moral, head of T. Rowe Price for Iberia. Among the catalysts for a positive revaluation are “consumer spending, the ‘onshoring’ of US industry and pricing power.”

Regarding the outlook for 2025, experts at T. Rowe Price see the risk of US yields maintaining an upward trajectory “as reflation risks increase amid resilient fundamentals, a bearish Federal Reserve and “a potentially inflationary fiscal policy under the Trump Administration.” Looking at Europe, “Trump’s victory naturally raises concerns about tariffs, which could undermine consumer and business confidence in the eurozone,” they highlight.

Joaquín García Huerga, director of global strategy at BBVA AM & Global Wealth

The base scenario that BBVA AM & Global Wealth is working on is that of the global economic cycle with moderate growth, close to potential in the main economies, and with no recession in sight. “This is due to the growing weight of the services sector, which concentrates employment and acts as a buffer against the volatility of the manufacturing sector, and also due to the absence of relevant imbalances in the private part of the economies, companies and families” , he states Joaquín García Huerga, director of Global Strategy of the manager. If we add to this increasingly controlled inflation, “the environment seems appropriate for fixed income investments,” he adds.

From a strategic point of view, BBVA AM & Global Wealth’s estimates of future profitability, “always approximate, suggest that it is still a good time for funds or mixed portfolios,” says García Huerga. And that is due to the continuation of the economic cycle that “should allow additional increases in the stock markets, hand in hand with business profits, and fixed income should provide positive returns in the scenario of controlled inflation and rate cuts, and also continue acting as a natural hedge for variable income,” he clarifies.

Estimates of future returns are also positive in real terms. “Without having to take big risks or having to invest everything in the stock market, in our central scenario, inflation can be beaten with a traditional or mixed portfolio, which should be the minimum objective of every investor.”

Ralph Helder, CEO of BNY Mellon

Ralph Elder, CEO of BYN Mellon, recognizes that 2024 has been a mixed bag for clients, “much more interested in looking for ideas, specifically in fixed income. “We have noticed a considerable increase in net flows.” At the same time, “we continue to see the trend of passification of the market and a lot of competition for our own product, affecting net flows,” he adds. He expects 2025 as “a year with more dispersion and more volatility. The victory of President Donald Trump may deviate some of the expected macroeconomic expectations and may create more tail risks,” he points out. They see possibilities in the American market in general, but at some point, “the policies of the Republican president, if he follows his proposed plan, will create more attention on the deficit and as the year progresses, we will closely monitor the inflation data.”

Ignacio González-Enciso, head of institutional relations at Income 4 manager

“In 2025, fixed income will continue to offer profitability and quality companies are consolidated as an ideal investment in variable income,” he says. Ignacio González-Enciso, Responsible for Institutional Income Relations 4 Manager. In the case of fixed income, investment grade bonds, both sovereign and corporate, “continue to provide positive IRRs thanks to current monetary policy,” he adds.

This environment continues to favor investment in fixed income assets “as a recurring source of income, with competitive returns that allow investors to diversify their portfolios and generate stable income without assuming high risks. “Fixed income remains a key option for those seeking stability and predictability in their investments.”