Diogo Verde from Millennium bcp is our Fund Selector of the Month

Diogo Verde holds a degree in Economics from University do Minho and a Master’s in Management from Universidade Católica Portuguesa. I am grateful to Golden Wealth Management for the opportunity to begin my career in the financial sector – first as an investment analyst and later as a fund selector, he emphasizes. His path eventually led him to Lisbon, where he joined the analysis team of FundsPeople. More recently, he was invited to join the fund selection team of Millennium bcp, an opportunity he was very pleased to accept. Diogo is currently part of that team, where he is responsible for selecting and monitor all fixed income vehicles included in the bank’s current offer.

Would you mind sharing a bit about your experience with fund selection? What initially drew you to this sector? What did surprise you?

I have been working with investment funds since the beginning of my professional career. Over the course of the years, I had the opportunity to try or investigate different roles within the industry and understand the uniqueness and requirements of each one. I believe fund selection is a mix of the two things I liked the must: the old reliable financial analysis and the networking and people touch embedded in each interaction with a portfolio manager/investment specialist.

During those years, what did you learn that shaped your understanding of the market?

Among other developments, I believe I now have a much deeper understanding of the market as a whole. I have had the pleasure to meet most of the participants in Spain and Portugal, gained insight into a wide range of management companies and their strategies. This experience helps me to know with whom I should talk when looking for a specific fund and establish a benchmark of what to expect from each different one.

Which performance indicators or financial metrics do you trust most when evaluating a fund’s potential?

The indicators and financial metrics vary depending on the asset class of the fund or what is the role it is intended to play. On a generic approach, I like to look at the stability and expertise of the management company and management team of the fund, analyze the evolution of assets under management, costs compared to the peer group and, of course, performance over different time horizons. 

With your deep experience in both the Portuguese and Spanish investment markets, how do these markets differ from each other, and how do they compare to Northern Europe?

Funnily enough, I find them quite similar. Aside from scale, the players and what strategies investors are looking for at a specific moment in time are pretty much the same. I believe there is still a long way to go in terms of educating the end client about the different asset classes, investment time horizon and risk management. That is the main difference I can identify between the Iberia market and, for example, the German or the Netherlands’ market. If you want a useful indicator, just go look for the percentage allocated to bond investments in both regions.

When evaluating a fund, how do you balance short-term performance with long-term potential?

Performance is not always the only thing we look for, in particular short-term performance. It is of utmost importance to understand very well the investment process/philosophy of the fund and the drivers of said performance. Every fund has good and bad runs, to understand in which scenario each one excels is the key to unlock the aforementioned “long-term potential”.

Which recent market developments have had the biggest impact on your investment decisions?

I believe that 2022 marked a pivotal year for any professional involved in fixed income fund selection. On one hand, the long-standing assumption of a near-sacred decorrelation between equities and bonds came under scrutiny. On the other, the sharp rise in yields and spreads injected renewed dynamism into an asset class that had been significantly constrained by central bank interventions. This shift not only challenged conventional portfolio construction frameworks but also opened the door to compelling opportunities across the credit spectrum.

What advice would you give someone starting out in fund selection today?

Everyone starting in fund selection must have a lot of openess to meet new people, network and overall have a schedule packed with meetings. At the same time, this person needs to have the discipline to keep working on its technical skills. Meetings with portfolio managers can very rapidly get technically demanding.

From your perspective, what might 2026 bring for fund performance and market dynamics?

I believe that 2026 has the potential to be another good year for investors. With recession worries cooling off and some more visibility on the plans of the main central banks, portfolio managers should be well-positioned to deliver alpha to investors.

Beyond your professional work, how do you like to spend your time? Are there hobbies or personal interests you’re especially passionate about?

Off work I like to do sports and spend time with my friends and family. I like to go to the gym, practice boxing or just hang out at a coffee table. I also like to travel a lot when I have the chance. I like going abroad and getting to know other countries and experience new cultures and ways of living.