With stock markets at historical highs, managers are calling for discipline and diversification. Reducing the weight of large tech stocks and seeking opportunities in Europe, Japan, and emerging markets are the keys for the second half of the year.
Investors are facing a dilemma: with major indices at historical highs and valuations becoming increasingly tight, the room for optimism is shrinking. Managers agree that the second half of the year demands more discipline than euphoria. The recipe is to diversify, reduce concentration in large tech stocks, and seek new opportunities in Europe, Japan, or emerging markets.
Portfolio review without drastic moves
Abante believes it is time to review portfolios, but without making drastic moves. The firm advocates for moderate adjustments to slightly reduce risk in those assets that have seen the largest gains and present more demanding valuations. The key, according to Abante, is to maintain a long-term strategy based on diversification, avoiding concentration in large tech stocks, the United States, or trendy themes.
Factors such as inflation, central banks, or geopolitics will continue to influence market behaviour in the coming months. For investors, this means that it is not enough to buy and forget: one must be attentive to macroeconomic changes and adjust the portfolio gradually.
Avoid seasonal trading: summer is not an excuse
Unicaja Asset Management reminds us that summer alone is not a reason to change a portfolio. The manager insists that investment decisions should respond to the risk profile, time horizon, and economic outlook, rather than seasonal factors. To achieve true diversification, it recommends reducing excess weight in large US tech stocks, incorporating small and mid-cap companies, and combining rigorous quantitative and qualitative analysis in fund selection.
Investors who wish to follow this advice can start by reviewing their exposure to the 'seven giants' of Wall Street and seeking alternatives in less crowded sectors. Professional advice becomes crucial here to avoid falling into passing trends.
Spain, Japan, and emerging markets: alternatives gaining traction
The Spanish stock market is once again attracting the interest of large institutional investors, according to Alantra, thanks to economic growth, attractive valuations, and improved corporate profits. However, capital has become much more selective and prioritises companies with visible growth, cash generation, competitive advantages, and strong management teams. Sectors such as infrastructure, digitalisation, artificial intelligence, electrification, or defence continue to hold interest.
Beyond Spain, Rothschild Asset Management believes that emerging markets are once again offering opportunities after years overshadowed by the United States. The manager aims to identify leading companies with solid balance sheets and attractive valuations. Brazil stands out for the potential of its financial sector, while China remains a relevant bet due to its capacity for innovation in technology and artificial intelligence, despite the discount at which many of its companies still trade.
Another alternative for diversifying portfolios comes from Asia. The Arcus Japan Fund, distributed in Spain by Campion Capital, focuses on Japanese equities with a strong value approach, seeking medium and large-cap companies that are trading below their intrinsic value. Although it has lagged behind the TOPIX this year due to the surge in artificial intelligence and semiconductors, it maintains lower volatility and a solid long-term return history.
Selectivity in technology: not all AI is equal
Technology continues to be one of the major drivers of the markets, although experts warn that it is no longer enough to buy any company in the sector. Victoria Torre (Self Bank), Silvia Merino (Fidelity International), and Carlos de Andrés (WisdomTree) agree that artificial intelligence will continue to drive growth, but they advocate different strategies: from diversified exposure across the entire tech value chain to vehicles exclusively focused on AI-related companies. In all cases, the common denominator is the same: being much more selective in light of increasingly demanding valuations.
For retail investors, this means that it is not enough to buy a generic tech ETF. It is advisable to analyse which companies within the sector have real competitive advantages and not just a label of 'artificial intelligence'.
In summary, the second half of the year presents itself as a period to adjust sails, not to set sail into the sea aimlessly. Geographical and sectoral diversification, along with careful stock selection, will be the tools to navigate a market that continues to offer opportunities, but with a more complex risk map.
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