Garrabou von Trotha’s clients have also opted for more risk, realising their fixed income-heavy portfolios were not ideally suited to weather the low-yield environment.
“Our most popular fund-of-fund strategy has been changing from the one with an allocation of 10% to equities to one with 25%. That’s a huge step in the change of mentality of the Spanish investor,” he says. Traditionally, Spanish investors invest almost their entire portfolio in fixed income, and they are not used to taking on equity market risk.
And his clients are taking their higher exposure to risk remarkably well, says Garrabou von Trotha. “Our sales people have done a very good job in making clients aware of the higher risk. In August and September, we have not seen significant outflows.”
Click here to see part two of the interview, in which Alexandre Garrabou von Trotha explains why he turned to alternatives for his fund-of-funds clients.
