In this series of short profiles, we ask leading fund managers to defend their investment strategies, reveal their views on cryptocurrency, and tell us what they'd never buy.
This week our interviewee is Alex Pelteshki, co-manager of the Aegon Strategic Bond Fund, which has a Morningstar Quantitative Rating of Gold.
Which Sector Shows the Biggest Promise in 2023?
We continue to like European financials best in 2023. The fundamental backdrop remains very solid, while the pass–through from higher rates continues to support revenues. We see the best risk-adjusted returns in the senior part of the capital structure there.
What's the Biggest Economic Risk Today?
If I were to name just one, it would be the length of the global tightening cycle that would pose the biggest challenge to all economic actors. While not our base case, an extended race to the top from the major global central banks has the potential to tip the global economy into a negative growth territory.
Describe Your Investment Strategy
I always seek mispriced opportunities across the capital markets. My goal is always to find the cheapest possible way to express a view and ideally, a way to protect the downside if that view turned out to be incorrect too.
Which Investor Do You Admire?
There isn’t a single investor that I admire or religiously follow. I try to form my own investment views, while being abreast of what thought leaders globally are preoccupied with too.
Name Your Favourite "Forever Stock"
No such thing. The main goal of investing is to continuously find mispriced securities that could deliver excess returns. In the land of fixed income and unlike in equities, there is a clearly defined upside that cannot be exceeded (as expressed in the credit spread). Therefore, a successful fixed income investor should by definition always be rotating out of securities that are fully priced to others that are under-priced in order to stay ahead.
What Would You Never Invest In?
Tobacco.
Growth or Value?
I am a fundamentals analyst by nature and would always seek value in any investment opportunity. To a great degree, this helps me eliminate emotion or euphoria from my investment approach.
House or Pension?
Both. A house gives someone an immeasurable sense of current stability, while a pension does the same down the line. Both go hand in hand.
Crypto: Brilliant or Bad?
There is a broader use of the technology underpinning crypto, but as a store of monetary value I think it needs to evolve a fair bit more.
What Can be Done to Improve Diversity in Fund Management?
Any opportunity should be left open to the best candidate for that role. If this is applied consistently and successfully irrespective of age, sex, gender, background or religion, the diversity profile of any position should be a mirror image of the broader society. That is the ultimate measurement.
Have you Ever Engaged with a Company and Been Particularly Proud (or Disappointed) in the Outcome?
We engaged with Italian energy company Enel to act on its Paris-aligned accounting. We received a positive response which led to steps being taken to provide disclosures on how climate risks are being taken into consideration and contact with the companies' auditor to audit this process.
What’s the Best Advice You’ve Ever Been Given?
Success is 75% hard work and 25% talent.
What Would You be if You Weren’t a Fund Manager?
An entrepreneur.
