What was your route into asset management?
Ella: I grew up in Albania, until the age of 17, which is when I came to the UK to study, during a turbulent period in my native country. I witnessed the fall of a communist regime and the subsequent fallout first hand, which provided me with an early lesson in how unusual or tail-risk events are far more likely to occur than many economic models suggest. I believe those experiences had a fundamental influence on my perspective in life. Fixed income sits at the forefront of these risks as it is a lot more macro than micro-focused.Fixed income appealed to me from early on in my career given that I like to navigate macro complexities, and I considered it would be an intellectually stimulating as well as demanding area. Back in 2003, many of my friends who were also pursuing financial careers did not understand why I wanted to get into fixed income when the asset class was seen as a bit of a ‘boys club’, with most preferring equities as the place to go and investment banks over asset managers.
I started my investment journey as a trainee portfolio manager at Invesco Asset Management in London in 2003. There were few women fixed-income managers at that time, and most worked in emerging markets. The numbers have changed over time, albeit at the margin. Later, I worked at Wellington Management and Pictet Asset Management before joining Newton.
How would you describe your career at Newton?
Ella: As an investment team leader, my role entails not just markets and investing but also managing the interactions with internal and external stakeholders of the business. Ultimately, our role is to seek to deliver attractive outcomes for our clients and to look after their capital in the best way possible.
How would you characterise your style as a portfolio manager?
Ella: I would describe myself as a thematic, top-down macro investor with a contrarian preference, who seeks out potential turning points in markets. I like to focus on the probability set of different scenarios and believe that by looking at asymmetric risk one can gain an advantage over time. Another crucial skill as a bond manager is to focus on mitigating and surviving downside risk. As a manager, I believe that to have a successful team it requires a degree of cognitive diversity in terms of background and investment style. ‘Groupthink’ can be very dangerous and there is plenty of evidence that groups often make worse decisions than individuals, so we try to avoid it. We spend a lot of time thinking through tail risks and their implications. It is important to understand that we cannot hedge for all scenarios so we take time to work out which tail risks matter most and how we can account for them.
What do you most enjoy about your job?
Ella: The changing and demanding nature of the role and fast-paced movements in markets. I enjoy figuring out complexities, but especially the learning. Investing is one of the few careers that requires constant evolution.
What have been the most memorable periods of your investment career?
Ella: Experiencing various crises in markets up close helped to shape my understanding of systemic risk, and significant market shocks have continued to underline the importance of risk management throughout my career. I have seen a few hiking cycles, such as that of 2003-6, and the current one, but I have also managed portfolios through the global financial crisis in 2008-9, the eurozone crisis of 2013-14, Brexit in 2016 and, more recently, the Covid pandemic and Ukraine war.
What is the market outlook for fixed income?
Ella: The fixed-income outlook is the most interesting it has been for some time as we are in a late-stage cycle and are able to ‘stress-test’ government bonds. Rising geopolitical tensions complicate the picture for fixed income, with the risk of volatility and higher oil prices that have implications for wider commodities and credit. More broadly, we expect the trends identified by our financialisation theme to dominate markets as the effects of monetary tightening play out over the next few years, with a significant wall of debt that will need to be funded in an environment of higher interest rates.
How do you spend your free time?
Ella: I am a constant learner and am always studying something new. At the moment, I am completing an Executive MBA at the University of Cambridge. Aside from that, wine is a hobby of mine and I am a fully qualified sommelier, and I also enjoy reading and dancing. I speak five languages and like to travel as extensively as possible.
