Monday, July 4

The tourism sector is busted and has high potential. We see well IAG, Fraport or Ferrovial

– Three months ago you joined Finaccess Value as Co-Chief Investment Officer … What challenges do you face?

Finacess value has been in Spain for several years as a Company, as a securities agency since the beginning of this year and we belong to a global Finacess group that operates both in Mexico and in Miami (USA) and in Europe through Spain. What we do is “think globally but act locally” each one in their geographic area but we feed the matrix. One thing that differentiates us is that we produce products to meet the needs of our clients, never the other way around, we have an expert team in both equities and fixed income in Spain. We have just launched two funds, one of short-term fixed income to solve liquidity problems or deposits of our clients that are charged by banks, and we have taken out a dividend fund that offers a semi-annual distribution of income to our clients. Our role is to make our clients see the added value that we provide through a management that not only offers profitability but also good risk control.

– What macroeconomic vision do you have for 2022 and with what scenario do you build your portfolios?

We believe that the first part of the year will go with the same inertia that we ended 2021. We have quite volatile markets, the VIX index has passed in the last ten years above the level of 30 ten times and of these, six times have been in the last year and a half. It is true that this volatility is decreasing in intensity and it is something to take into account. In addition, we will coexist with an environment of reflation although the two variables (growth and inflation) that make it up will decrease.

Another variable is interest rates. We believe that there will be a very moderate rate hike in the US while we do not see it at the ECB. First, because the balance sheets of both the FED and the ECB have increased exponentially in recent years and that is very difficult to reduce and also because we are at record levels of sovereign debt, it is not so easy to raise rates because you hurt the states .

On the subject of corporate results, we believe that they will continue to be positive but that we have seen peaks of upward revisions to results. In this regard, we believe that active management is important as there are companies that have made the valuation cap and upward revision of expectations of results.

And finally, the issue of China, which may have passed the deleveraging phase and could go to a leverage phase with all the impact that this has on raw materials.

-Which sectors do you think will do better in the next year?

There is a first sector, which is tourism, which we believe is busted. It is, for obvious reasons, the one that has recovered the least at the price level and we see high potential as the situation normalizes. It is true that the recovery of the sector has been postponed and we see well companies such as Fraport, which has a beautiful history of restructuring behind, IAG or Ferrovial.

The second sector that we see well, even though it is very heterogeneous, is the industrial sector. We see companies that have done their homework and have done very well despite the environment in which we have moved. Daimler and Renault can do well. In Spain Cie and Gestamp. And other securities such as Schneider Electric, CAF or Acerinox.

In the financial sector we are more biased towards means of payment with Adgen or Next and in the banking sector Commerzbank.

And finally in the technology sector there are stories that will continue to work because they have high entry barriers, they are oligopolies like Infineon or ASML but there are also stories that have lagged behind and, even presenting good results, it has not been reflected in their price, such as SAP.

The Finaccess Strategy Dividend fund has just been launched together with Renta 4 Gestora where Finaccess Value is in charge of management by delegation of management. What does it consist of?

This product is a mixed variable income, investing more or less 50% in equities and 50% in fixed income. The fixed income part is focused on bonds that offer a coupon that is capable of covering the management commission and it is in the variable income part where we try to invest in companies that offer a good sustainable dividend yield, that have a team of solid manager over time and that gives us a diversified portfolio of companies both geographically at the level of Spain, Europe and the US, as well as at the sector level. Fee-free profitability is around 3% and we also include fairly strong companies that we expect to appreciate over time.

– And for the fixed income part of the portfolio that can reach 30%?

In the fixed income part, the scenario with which we work is high inflation, withdrawal of stimuli by central banks and minimum credit spreads. With which we are doing a very active management, avoiding long durations and avoiding positioning ourselves in the sovereign debt part, which we use very marginally as a cushion in times of volatility. What we are looking for is corporate fixed income and even high yield, knowing the companies well. We are also doing a very opportunistic management because, for example, in sectors such as leisure and tourism, volatility has given a good opportunity to enter into fixed income. We are looking at companies that have a fairly solid balance sheet, fairly cyclical earnings behavior, and are capable of passing the increased costs on to customers.

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