FINANCE | 07.30.2020

“Active management is now vitally important”

Daniel Sancho

Head of Investments of MAPFRE Gestión Patrimonial

Daniel Badía

Volatility continues in the markets, as business results begin to reflect the devastating effects of the pandemic in their accounts.

For this reason, Daniel Sancho, Head of Investments at MAPFRE Gestión Patrimonial, believes that it is essential “to have a good advisor to help us build a well-diversified portfolio.” In an interview with Radio Intereconomía’s A Media Sesión program, he said that “active management is now vitally important because, when it’s done properly, it can help us beat the benchmarks.”

At the macroeconomic level, caution continues with the prudent message by the Chair of the Federal Reserve, which remains in the midst of the latest negotiations for the new fiscal stimulus package in the US. “The current situation does not provide any reason to be more optimistic, since the virus is still spreading. In the end, this is just another measure, when those taken so far by central banks have already exceeded 20 trillion dollars — or the equivalent of 14 percent of the world’s GDP,” adds the expert at MAPFRE Gestión Patrimonial.

For Sancho, this stock market volatility may also be an opportunity for managers. For example, Sancho is convinced that the technology industry will greatly benefit from the commitment to be a more digital and sustainable world. Of course, there are already companies with high valuations, which is why they have to be carefully selected.

Something similar is happening with the tourism industry, which is one of the hardest hit industries by this crisis. “As the price does not match the valuation, there are companies with flexible businesses that are adapting well to the new normal that are being hit hard on the stock market, but may succeed in the long-term,” he explains.

In this environment of strong uncertainty, investments in gold have risen spectacularly. Sancho says that MAPFRE Gestión Patrimonial does not directly invest in raw materials, but rather seeks funds to invest in companies with high exposure to gold.