3 selectors, 3 funds for 2025
23 JAN, 2025
The 2025 is shaping up to be a key year for financial markets with challenges such as persistent inflation, the evolution of interest rates, and geopolitical tensions setting the course. In this context, choosing the right investment fund is not only a matter of profitability, but also of strategy and long-term vision.
To help you navigate this landscape, we have asked three selectors to recommend a fund to keep in the portfolio for the next twelve months. Gracia Campos (Deutsche Bank Spain), Thierry Guérillot (Myria AM) and Rosario Antonio Zammuto (CNPR) have identified an investment strategy that they consider ideal for 2025, whether for its ability to generate consistent returns, its innovative approach or its resilience in the face of volatility. If you are looking for investment opportunities, this article is for you.
| Investment Fund | ISIN | Category | 1 Year Return | 5 Year Return (annualized) |
|---|---|---|---|---|
| Capital Group New Perspective Fund (Lux) | LU1310445934 | RV Global Cap. Large Growth | 26.37% | 12.49% |
| Indépendance France Small & Mid | LU0104337620 | RV France Cap. Small/Medium | 4.19%* | 8.38%* |
| Amundi Euro Liquidity | FR0010251660 | EUR Money Market | 0.17% | 1.29% |
Capital Group New Perspective
Gracia Campos, Head of Fund Selection, Deutsche Bank Spain
Our proposal for 2025 is Capital Group New Perspective, a fund that has been among our selected funds for many years, considering it a core fund of active global equity management that currently has a bias towards growth. Therefore, we believe it is suitable for investors seeking long-term growth and global diversification through active management.
Its long track record, given the fund's 51-year history, as well as its consistency in management during major periods of crisis and prosperity with great solvency and rigor, were the criteria that marked the selection of the fund. The management company is characterized by the low turnover of its employees and, in particular, its managers develop their career mainly at Capital Group.
At Deutsche Bank we especially value the stability of the management team, being an actively managed fund. Its investment process is very characteristic due to the alignment of the manager with the fund's result. The fund is managed by ten portfolio managers with an average of 30 years of investment experience and 23 years at Capital Group. In addition, part of the strategy is managed by their investment analysts: Research Portfolio (RP). Each of them selects the highest conviction stocks globally. The ten portfolio managers are invested in the strategy, with four of them having at least 1 million dollars each invested alongside the investors.
This investment process results in a large portfolio in terms of the number of companies, with no limits by market capitalization, although de facto it shows a bias towards large companies (280 names and the top ten represent around 25%, while the portfolio turnover is very low, averaging less than 20%). The result is a fund that invests in companies around the world, which can benefit from changes in global growth patterns and economic and political trends. In this sense, currently there are three major transformative changes: the accelerated digital disruption, innovation in the health sector and the rebirth of the industry. Trends, all of them, aligned with the vision of the DB strategy team (CIO Office).
Precisely, digital transformation is an unstoppable process, which is allowing companies to improve their productivity and competitiveness, largely thanks to the development of artificial intelligence. The arrival of Donald Trump to the presidency of the U.S. can also be a new supporting factor for the entire technology sector, both fiscally and for his commitment to increased R&D spending, as well as, presumably, easing regulatory pressure.
Health is also another long-term issue, given the increasing aging of the population, as well as the growing development of medical technology. Similarly, the recovery of demand, coupled with an almost complete recovery of global supply chains (heavily affected after Covid and the war in Ukraine) should also allow a rebirth of the European industry.
Independence France Small & Mid
Thierry Guérillot, Responsible for Fund Selection and Hosting Activity, Myria AM
There are many ways to cope with small cap equity funds. As the definition of small cap differs between Europe and the US, you can invest in a large array from micro to mid-cap funds. Generally speaking, these companies are more family businesses than in the large cap area, more focused on a specific industry and countries.
Your investment in small cap equity funds could be justified for speculative reasons (to play IPOs, M&As) during a period of time of expansion or for value reasons at a time when small caps lived a long period of underperformance whereas investors anticipate an economic revival and interest rate cuts by the Central Bank. That is the kind of backdrop we could imagine for the coming months…
At Myria AM, for that kind of strategy, we do like very much investment processes that rely on a private equity approach, long time oriented and quality focused.
The Indépendance France Small & Mid Equity fund, managed by Indépendance AM, ticks nearly all the boxes: a quality-value approach (the best approach in my opinion to invest in small caps with a large focus on cash flow, ROE and the level of margin), a low name turnover, a balanced portfolio with less than 50 holdings (the top 10 is approximately 40% of the assets), a SFDR8 classification, one of the longest track record in the category with the same portfolio manager (over 30 years!), one of the most regular fund delivering annual outperformance (24 years out of 30) and an outstanding outperformance on most of rolling periods.
Conversely, fund selectors who are concerned by a value for money constraint in management fees will have a difficulty to invest in, as the ongoing fees of the strategy are over 150 basis points.
Amundi Euro Liquidity
Rosario Antonio Zammuto, Financial Analyst CSTA - CNPR National Provident Fund for Accountants and Commercial Experts
A long-term investor, such as pension funds and provident funds, which generally follows a passive management referenced to a specific benchmark (often conservative or globally balanced), can consider monetary investments in two different ways.
The first is based on the management of their own cash flow, that is, the activity that serves as a bridge between risk investments aimed at ensuring long-term wealth growth and the liquidity management necessary for the payment of pensions to affiliates. Specifically, the use of monetary funds can help to invest, for example, temporarily incoming liquidity flows constituted by the contributions of the affiliates. The second way in which pension funds can show interest in monetary investments is the management of a monetary investment line from a "life cycle" perspective for affiliates who, with only a few years left until retirement, want to minimize the risk of market price fluctuations.
However, in periods of falling interest rates, the returns on monetary funds can be very low and in the last decade this has led pension funds and provident funds to seek investment alternatives. In fact, for about a decade (2013-2022) monetary funds have given returns below 1% and for long periods even negative returns.
Only in the last two years have monetary funds returned to positive returns. Investing for example at the beginning of 2025 in annual BOTs can still yield 2.4%, before costs and expenses; in 2024, the same investment yielded 3.30% and in 2023 +3.06%. A good monetary fund like Amundi Euro Liquidity in the last two years has yielded 3.62% annual net of expenses, managing to cover inflation growth and beating short-term public debt investment (without considering the tax effect).
Annual evolution of BOT yield over the last 20 years
What are the prospects for the money market in 2025?
Given the current money market interest rates, we believe that a good profitability target for a well-managed money fund this year could be between 2.5% and 3%.
The flows in money funds were positive in 2024 both in Europe and the United States. While in the United States interest rates remain high, justifying an increase in flows in this asset class, in Europe the ECB has cut rates more than in the U.S., reducing the profitability of those who, for various needs, want to invest in the monetary. For an investor in euro assets, therefore, it is advisable to bear in mind that allocations in the monetary will have a lower return than in the last two years and that, in addition, the yield could be eroded by costs and rising inflation. However, it is maintained that the estimated positive return of just under 3% for 2025 can be a good return target for those who have a pension plan they want to secure.
