co-head of UK multi- manager funds, Aberdeen Asset Managers

Based in: London, UK

“The rally in the markets in the second half of 2010 has led to a higher level of optimism, with “risk on” trades being back in vogue. This renewed exuberance seems to have had a bearing on how many leading strategists view the prospects for the year ahead. Ordinarily we are uneasy to share the consensual view, but ultimately we believe the positives outweigh the negatives and the global economy is on track for a sustainable recovery. With this in mind we have reduced our cash position by allocating more capital to the Jupiter Absolute Return Fund which can to invest in a range of different asset classes.”

CFA, European Fund Selection Committee, Allianz Global Investors Investments Europe

Based in: Milan, Italy

“This month we are changing the portfolio, reducing the fixed income absolute return exposure (Vontobel and Julius Baer) and entering a new alternative beta position, the Dexia Index Arbitrage strategy. We stay invested in the euro government bond market with the Allianz Euro Bond Strategy, where at the moment the duration and peripherals positioning is prudent. We keep a slightly positive exposure to global equities with a position in the gold sector, as an hedge for macroeconomic imbalances. In the euro equity market, we still focus on active managers (Alken, Rothshild & Cie) and the ING High Dividend Strategy.”

portfolio manager, BNP Paribas Wealth Management

Based in: London UK

“When it is cheaper to eat out and shop in London than in Madrid, you know there is a problem. The euro is too expensive and sterling too cheap. As the E/$ rate tests 1.3, we should all remember that shortly after the launch of the euro this rate was closer to 0.8. It may well be that the most effective way to deliver out performance for euro portfolios, is simply to invest abroad? While this may be true, Europe is so unloved that equity valuations are among the lowest in the world. Pity we could not say the same for tapas!”

executive director and chief investment officer, C-Quadrat Kapitalanlage AG

Based in: Frankfurt am Main, Germany

“December marked the overall positive end of an exciting year from an investor’s perspective. After the debt struggles of the peripheral European countries at the beginning of the year, global equity markets showed remarkable resistance and finished the year with a positive performance. This is mostly due to the increased demand for goods and commodities from the emerging markets, especially China. Our portfolio, which is allocated according to C-Quadrat Best Fonds Strategy, reacted to this market environment by increasing equities and reducing fixed income investments.”

head of funds of funds business, Dekabank

Based in: Frankfurt am Main, Germany

“The strengthening world economy, flow and return momentum and value favor aggressive overweigts of private-sector securities over public sector debt. We have a large overweight of equities over fixed income and non-financial credit over government debt. We kept our overweight positions in European stocks. Growth in emerging markets in 2011 will remain elevated. The favourites in the emerging markets region are Russia and Brazil. Bond yields are likely to rise, because of the improving growth prospects. Central banks in industrialised countries will maintain their expansionary policies

Eurizon Capital

Based in: Milan, Italy

“In December we did not make any changes to the portfolio.

We were hurt by our slight underweight in equities and no exposure to corporate issuers in the fixed income part of the portfolio. In the period we got good contribution to performance from GLG Japan CoreAlpha, UBAM US Value and M&G Global Basics. Vontobel Global ex US and Vontobel US Value posted disappointing results. The bond portion of our portfolio remains invested in pure government bond funds, as we maintain our conservative approach.”

head of portfolio management, FundQuest, BNP Paribas Group

Based in: Paris, France

“Year end brought positive returns on risky assets. The equity portion of the portfolio invested in emerging and developed markets contributed significantly to its strong performance. In fixed income, our European convertibles holdings did well helped by supportive equity markets. Our defensive holdings on sovereign debt and implied volatility detracted from performance, penalised by improving macro-economic figures. We switched part of our credit exposure from corporate investment grade to financial subordinated debt, benefitting from an interesting entry point and good fundamentals.”

manager selection specialist, IPCM, ING Private Management

Based in: Luxembourg

“The last quarter of 2010 saw a strong rebound of most of our equity investments. In particular, our two funds dedicated to the US market (Investec and Schroder) have performed well. In addition, our bets on commodities via the JPM Natural Resources fund have been beneficial. While we have not made any change in the portfolio this month, we are closely monitoring the evolution of both Govies and Emerging Market Debt. Despite disappointing performance in 2010, we are ready to switch part of our bonds allocation into absolute return and hedge fund products.”

head of manager selection, Invesco

Based in: Paris, France

“The asset allocation has remained broadly unchanged between last November and early January, with an equity holding at half the total assets. A fourth European Equity fund has been added, focused on smaller companies, a part of the market less prone to macro hick-ups. Another important decision at the top-down level is to be over-weighted on government bonds, at least through a directional, pure-play holding. Instead, we are keeping our fixed income investment with diversified, nimble, go-anywhere active fund managers. Going forward, the equity weight may be increased, provided part of the early-January frothy enthusiasm fades away.”

senior portfolio manager, Investment Management Balanced, LGT Capital Management

Based in: Pfäffikon, Switzerland

“Long dated high quality government bonds and equity markets had a divergent development over the last four months. While bond yields increased significantly, equity markets continued their uptrend. Global macro data surprises to the upside since the beginning of November last year. An expansive monetary policy, combined with an attractive valuation and prudent investor positioning, call for further upside in risk assets. Given our constructive view on the markets, we increase the exposure to Japanese equities and goldmines and reduce inflation linked bonds after real yields have decreased significantly.”

head of international portfolio management, Rensburg Sheppards IM

Based in: London, UK

“‘Investors flocked back to the equity markets after gaining reassurance from the flow of corporate and economic news. A positive surprise came from (the multi-cap, style blended) Polar Japan that delivered excellent absolute and relative performance. Concerns remain, with the quant-driven Blackrock US Flexible Equity and defensively minded Cazenove European. Both of these funds have struggled among their respective peers in the market upturn.”

co-heads of multi-management, Thames River

Based in: London, UK

“Equities finished the year strongly led by Europe and Asia, with bond markets falling back as growth and inflation prospects were factored into prices. Currencies were again volatile as the Euro fell against sterling and the dollar by 2.5 per cent and 3 per cent respectively. The Janus US All cap fund was the best performer of our selection benefiting from the currency move as well as the skill of the manager. The Thames River Global Bond fund was the worst performer, reflecting the move in bond markets. We expect the positive tone of the year end to continue, but expect some short term profit taking at some point.”