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swedes hedge their bets on europe

It is rare that the speakers at an Expert Investor event oversee more assets than the delegates, but it was a close run thing on 11 February in Stockholm


Dylan Emery

Something in the region of $25bn (€18bn) AUM was represented by figures such as Harry Nimmo, head of Standard Life Investments’ small cap teams; Wahid Chammas, head of Janus’ European equity strategy; Harry Clark, founder of Clark Capital in the US; Bastian Gries, head of credit at Meriten; and Craig Moran, who is deputy manager on several of M&G’s behavioural finance funds.

The one person who doesn’t manage money is Nicholas Brooks, who is head of research and investment strategy for ETF Securities – but the opinions of his team influence the decisions of all of the investors using his companies’ funds.alt=''

As a result of all this expertise, the topics covered were wide ranging and opinionated: there was a particularly interesting discussion on inflation/deflation – while two-thirds of the Swedes in the room think that deflation is really the worry, rather than inflation, the panellists had a substantially different view depending on the assets they manage.

When one delegate asked what the perfect inflation-proof company would be, Chammas pointed out that commodities companies would do well because of their relatively fixed cost base – so as inflation rose, so would their profits; while Nimmo mentioned that high quality companies might struggle because the environment would punish them.

Various other panellists also pointed out that while deflation was a risk, the obsessive determination of central banks to prevent Japanese-style deflation largely ignored the longer-term risks of high levels of inflation.

Demand for European long/short

Another point that stood out in the day was the attitude of the delegates towards European equities. Like many other countries, there is a trend towards overweighting Europe – but what is unusual is that the Swedish showed a strong preference for small caps and for value stocks, while in US equities, value is somewhat preferred – but the style choice is far less consensual.alt=''

Finally, there is yet more evidence that the readers of EIE are happy and comfortable with hedge fund investing. Two-fifths of the respondents would choose long/short as their primary route to access EU equities; only 20% would do that for US equities; 30% in emerging markets.

In historic terms, this is very high. It also links up to the attitude to absolute return products, which after a popularity dive last year are back up again; and the preference of 15% of the respondents to buy their fixed income in a hedge product.

Click here to see a slideshow of photos taken at Expert Investor Nordic.

Platinum members can additionally view a full breakdown of the event voting data here.