Scheurer, the firm’s senior investment director for global capital markets and thematic research for Asia-Pacific, is in charge of coming up with the firm’s economic house view for the region.
He has found that, in order to meet the growing need, he needs to travel to the region more frequently.
“The demand for information is popping up [from clients],” Scheurer told FSA. “It definitely makes more sense to be longer on the ground.”
Frankfurt-based Scheurer, who first joined the firm in 2008, said that he visits the region 10-12 weeks per year.
He covers 12 countries and looks at the equity, bond and currency markets in the region, as well as the political landscape in the different markets.
China and Japan have the biggest weighting in terms of the importance of the markets that Scheurer covers. However, he noted that he still has to cover the smaller countries as all markets are interconnected.
Moreover, “Asean or emerging Asia is very interesting from an investment perspective,” he said.
Macroeconomic research
Scheurer sits on the firms’ global economics and strategy team, which he described as Allianz GI’s think tank that feeds into the macro layer of the different investment portfolios that the firm manages.
When he is not in Asia, he remains in communication with the portfolio managers through an internal chat system, similar to social media platforms such as Facebook, where they express their views on countries, sectors and other topics.
He values the insight he gets from conversations with fund managers. “We have portfolio managers who are looking at companies in [different markets] and analysts as well,” he said. “I give them insights from a macro perspective.”
He is also responsible for econometrics, such as analysing and forecasting China’s GDP growth numbers, but also determining if the numbers that the country releases are trustworthy.
However, at the end of the day, Scheurer said that the portfolio allocation decisions are left with a fund’s portfolio manager.
“Of course they have the freedom to allocate or not to allocate, but we are giving them a kind of framework on how to deal with different issues faced in different markets,” he said.
Volatility questions
Investors are quickly adapting to short-term volatility, said Scheurer.
For example, after the election of Donald Trump as president of the US, he expected the equity markets to go down, currencies to fluctuate and investors to rush to safety.
While some of it happened, markets were quick to stabilise. “Three days after the Brexit, the market was pretty solid,” he said. “[After the US elections], it took three hours.”
Although Scheurer said he found it interesting that investors were adapting quickly, he added he was worried that they were becoming too complacent, as indicated by low volatility despite political uncertainty in many countries.
Scheurer noted that the firm aims to anticipate global political events. “Heading into an event, we have regular calls and meetings internally, where we discuss different scenarios,” he said.
Before the Brexit referendum and the US elections, the firm’s global policy council prepared five different scenarios, he added.
The three year performance to 16 May of two of the several Asia-Pacific-related funds that the firm manages, versus their benchmarks.
Both the Allianz Asia Pacific Equity and the China Equity funds underperformed their benchmark indices, which are the MSCI AC Asia Pacific ex-Japan and the MSCI China, respectively.
