Why technology mutual funds are falling – What do you consider best if I want a fund that makes the most of reliable companies and, above all, with a high dividend distribution? The M&G, Global Dividend or the news top dividend?
Hello. Both are excellent options to enter quality global companies that pay dividends. We prefer the DWs fund because it is less volatile, more focused on larger companies, more exposed to value and with a lower weighting in technology. This makes it a more defensive fund that meets the criteria we are looking for for the defensive part of the portfolio within equities. In the current scenario, it should perform well as long as the market turmoil continues. Structurally, the two funds could be included to keep them within a broader diversified portfolio in the long term. Other alternatives to consider we have the Fidelity global div. Guinness global income etc.
Let’s not forget that looking for quality companies that give us good dividends ensures long-term periodic returns that are generally higher than the yield of a bond portfolio.
I have had a position at JPM Global Natural Resources D for four months. Do you think it can be maintained? Or, a possible alternative could be the Morgan Stanley Global Infrastructure A.
Hello. The question has different answers depending on the composition of the rest of your portfolio. If the fund weighs around 5-10% of its portfolio, I don’t see a need to change that. If it is true that perhaps it entered late, on foot changed in raw materials because the significant increase occurred in the first quarter. We have been warning for months of the danger of entering raw materials and energy following the necessary increases because the sector, in general, may suffer if we go into recession. Still, it is also true that in the long term, we like it since we are investing in natural resources that are increasingly scarce and in greater demand.
If you only have this fund in your portfolio or you weigh a lot in your portfolio, the sensible thing right now would be to reduce some weight. Alternatively, if you are thinking of more defensive sectors, you can go to funds of companies with high dividend yields; Health, Infrastructures is also a sector that has historically behaved well in difficult times. The Morgan Stanley fund seems to us a suitable option, but as always, within a broader and adequately diversified portfolio. A vital nuance if your entity is selling you the JPM Class D Fund, demand that it give you class A, which is cheaper and is the one you should have, the private banking class.
I am thinking of entering China. Can you advise me on some funds and your opinion of these funds: Fidelity Chicha Focus Fund A-Acc-Eur; Fidelity China Consumer Fund A-Acc- Eur and if it is better in funds in USD than in EUR?
Hello. The two options are interesting for entering China, but although they belong to the same manager, the composition of the two funds is very different. The Fidelity China consumer fund is heavily exposed to the consumer cycle and companies with a growth bias. In general, this fund is quite volatile. If we want to bet on a recovery in China looking to enter current levels, if we are not worried about volatility and go in the medium-long term (3-5 years), this fund can give us outstanding results.
The China focus fund is a calmer and less volatile fund, with a more diversified portfolio with exposure to companies with a value bias that generate general dividend yields, less volatile companies, etc. Logically, in the event of a strong recovery in the Chinese market, it would also have less travel than the previous fund. It would also be a good option for a more defensive entry into China and suitable for more cautious investors who do not tolerate much volatility.
Finally, regarding the currency, it is cheaper to do it in the Usd since you are investing in assets generally quoted in the Usd. Still, with the significant rise in the Dollar in recent months, it would be convenient to do it in Euros, and if it falls again, the Dollar rises to change to USD.
Do you think it’s time to get into the Nasdaq and the S&P 500?
It is a very open question that depends on the investor’s characteristics, the term, the rest of the portfolio, etc.
In principle, if you go long-term and want to start building a portfolio, these prices are interesting to enter gradually. Right now, the SP 500 is in a wide range of 3,700-4,300, and as it approaches the bottom, 3,800-3,700 seem to us accumulation zones, but, as we have said many times over these months, you have to keep liquidity since while we are with such high levels of inflation. In a scenario of rate hikes, the ranks of the equity indices may continue to fall. Therefore, doing it gradually is the best recipe as falls occur.
I would like you to analyze these two funds for me. Nordea 1-global climate&shipping…… Fidelity Global Technology A-ACC……
Hello. The two funds are within our portfolio of recommended funds. Especially the Nordea fund, where we have spent years within client portfolios with spectacular results. This year it has indeed fallen by around 8%, very far from the falls in most markets and sectors. We believe it is a fund to keep within a diversified portfolio in the medium-long term. It invests mainly in three essential legs that we consider to have a long way to go: clean-alternative energies, improvement in efficiency and use of resources and, in general, in protecting the environment.
The Fidelity fund is a global fund with 70% exposure to the technology sector and around 65% to the USA. It bets above all on quality companies with a growth bias and active management that has made it have outstanding results in recent years. Specifically, this year, it dropped 8%, much lower than the drop in the index. It also seems a fascinating idea to go into the medium-long term, taking advantage of the corrections, and if it already has it, it would be to maintain it.
I am 50 years old with a moderate profile, and in my BBVA branch, they advised me to enter BBVA SUSTAINABLE FUTURE ISR, FI (ISIN Code: ES0114279039. How do you see it losing 4.27% in the year?
Hello. The idea of investing in funds with high ESG criteria, in general, seems like a good idea to us, but what we don’t like too much is this fund. It is a mixed fund (70% fixed and 30% variable R) which invests, among other assets, in additional funds, and the fund results are pretty poor. We think there are many other better alternatives for the future, and if you want in private, we can give you different ideas according to your profile.
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