In the afternoon of the Charity Investment Forum 2011, Anthony Hilton hosted a lively panel discussion with a selection of investment experts. Read on for some of their comments.

The panel James Bevan - chief investment officer, CCLA Alan Goodwin - director of investment management, Newton Jeremy Smouha - director, GAM Oliver Burns - director of charities, Jupiter Paul Hodgson - managing director, Eskmuir properties and speaking on behalf of Aegon Asset Management Lothar Mentel - chief investment officer, Octopus Investments and speaking on behalf of CAF

Double-digit inflation

Smouha, GAM: We’ve run though the economic figures and there are good arguments to say it will come back and good ones to say it won’t. You want a situation where you have your cake and eat it, so try and ensure you invest in companies which if inflation doesn’t come back they will do well, but if it does they are structurally able to deal with the problem.

Bonds

Goodwin, Newton: If there’s inflation then bonds are going to be expensive. If we’re wrong and we are heading back into a slowdown then bonds are already good value but that’s not the line that most of us are pushing. The position of bonds in our portfolio is much more about liquidity and insurance for us being wrong in our view on inflation.

Emerging markets

Bevan, CCLA: The two economies that one should have some caution on are India and Brazil because both are overheating.

Middle East unrest

Mentel, CAF: Fear of a 1970s-style oil price shock is rattling the market. However, the 2 per cent of world oil output from Libya can easily be made up by Saudi Arabia digging a little bit into its idle reserves, so that at the moment isn’t the problem. The fear is that the unrest will spread, and the big issue is Saudi Arabia and Iran. Iran is in quite a different situation to what we’ve had in Egypt and Tunisia in that in Iran the protest was carried out by the middle class. Saudi Arabia, meanwhile, has a small population and vast amounts of money. So while there is the chance of a price shock, it is fairly low.

What sets you apart?

Burns, Jupiter: We recently moved quite substantially from emergingmarket- related equities towards more UK-related equities, and we did take some quite strong views on that.

Mentel, CAF: You have to recognise that all managers together can never outperform the market. But equally we do know that there are managers that over sustained periods of time, particularly in certain parts of the cycle, can produce superior returns to what’s available in the market. And if you’re going a step further and are not so blinkered that it always has to be active management, then actually we’re very happy to fall back on exchange-traded funds and tracker funds when the time isn’t right to be investing with active managers.

Hodgson, Aegon: We look at how we would differentiate ourselves in a property context, which in terms of charities we see as preserving capital base and delivering returning income streams.

Smouha, GAM: It’s about finding strategies which aim to achieve positive returns and are not beholden to crises in the world. For example, you can go up when markets crash if you are long on bonds or in the right currencies.

Goodwin, Newton: We are global stock lenders which means we look across the world for stocks we’re buying, and tend to de-emphasise geographic boundaries. What we think is more important is diversification across an industrial sector globally. In 2007 and 2008, because we were looking at the banking sector worldwide, we could look at UK banks and see better opportunities elsewhere.

Bevan, CCLA: Fundamentally, investment is about the devil being in the detail, and we are very interested in understanding what a company does and why that company should be rewarded with capital, what will happen to that capital and why we might be confident that the value of that capital will grow over time. So we look at shareholder value as opposed to simply short-term share price movement. We actually have very little control over what happens to the share price day-today, so what we have to do is buy where prices are depressed and wait long enough for value to come through.