Growth guru: Will Hobbs
He trained as a chef before making the switch to finance. Now – as Head of Investment Strategy at Barclays Wealth & Investments – Will Hobbs’ market insights are helping private investors identify the most profitable ingredients for their portfolio.
Will Hobbs is a busy man. As Head of Investment Strategy at Barclays Wealth & Investments, it’s his team’s job to try to decipher the various signals coming from the world economy and help decide where clients can best invest their capital – and turbulent world events are only making that more of a challenge. “Yes, we’re busy. It’s the budget, it’s Trump, it’s Europe. It’s everything,” he says. “Part of the process is to try to work out where the risks are. The electoral cycle is part of that story, and it’s a very cluttered political calendar this year. A confluence of things have come together to make things incredibly active.”
“It’s our job to produce a narrative around economies and markets”
Hobbs’ working day begins at six in the morning: “We do a morning call at 8.15 to the wealth business and I have to prepare for that. We’re trying not to do the job of the newspapers, but it’s any economic data and our view on it; political news and our view on it; how to interpret what’s happening and deliver our view to clients.”
One thing I like about my job is that it’s never the same from week to week, there’s always something where you’ve got a short amount of time to get to the bottom of it and work out what ‘the view’ should be on that particular subject.
Head of Investment Strategy at Barclays Wealth
Looking back to the start of his career, Hobbs describes himself as “desperate to become a chef”.
Training in Italy he “realised he wasn’t good enough” but, in changing careers, sought out a job that brought in one of his other interests, “the interaction between markets and economies”. Hobbs notes that: “It’s different to the kitchen, but with the same level of stress, and the same hours.”
Joining Barclays in 2003, Hobbs gained a Masters in Economic Development while working for the bank, as well as reading voraciously around the subject. “A lot of my reading is to do with economics and markets - because I’m interested in these subjects, which many may rightly see as a little tragic! One thing I like about my job is that it’s never the same from week to week, there’s always something where you’ve got a short amount of time to get to the bottom of it and work out what ‘the view’ should be on that particular subject. This year it’s been tax, where there have been complex and challenging changes touted by the new US administration, and there’s a race to understand the various ramifications."
Hobbs is a public face of the bank, writing popular blogs and appearing as an expert analyst on Bloomberg and CNBC. “It just kind of happened as part of the job,” he says. “To simplify my team’s job, we have to produce a narrative around economies and markets. The purpose of that narrative is twofold: it has to be profitable for clients to follow of course, but it also has to be accessible. That’s important because in financial services a lot of the jargon we hide behind obscures investments to clients and other normal human beings. One of our jobs in this sector is to make investments more accessible to a wider part of the population, because the returns available from capital markets are – over time and with the right sort of help – much more attractive than many people realise or are currently exposed to.”
In his work as a commentator, Hobbs tries to follow the example of those he admires: “The people you admire as commentators – whether in sport, finance, politics or whatever – you notice they’re always saying things that are carefully thought through, measured and defensible. The people I admire who speak on these matters have always been able to say, ‘I don’t know’. It takes a lot of guts to say it, but of course it’s impossible to know the answer to everything, even on a subject much narrower than the world of capital markets.”
Market strategists
The idea of “knowing what you don’t know” is also pertinent to the wider sphere of Hobbs’ work. He believes that “it’s important we advertise ourselves not as people who can see the future better than anyone else: the future’s unknowable, we’re just making carefully considered, well researched guesses. An ever-present problem in markets is how one measures and assesses risk. Many investors look at the year ahead and focus on the items they can see – this year everyone has been very focused on the various potential electoral minefields in Europe. But how can we place such risks in their proper context if we can’t see all the details of the future? In reality, like icebergs, most of the risk picture is submerged from view, and the danger is you exaggerate the risks you can see, just because you can see them.”
Rewinding twelve months, most analysts did see the risk of a Trump presidential victory or an EU referendum Leave vote, but few thought they would actually happen. Do unlikely future events begin to look more possible because such shocks have already taken place? “Possibly,” says Hobbs. “But the important thing we got right last year was that for markets it would be the economy – the prospects for growth and inflation - that would eventually be more important than the ever-evolving political backdrop, and that’s still the thing to think on.
“We’re not political strategists, we’re market strategists and our job on the political side of things is really to analyse how much politicians can actually do within the various, carefully constructed, constitutional frameworks. In the US we continue to argue that a combination of congressional treacle, economic self interest and the policing role often played by markets will end up diluting many of this new US administration’s more extreme promises. In Europe, we probably need to remember that the constitutional framework in many of the countries in question was designed in the aftermath of the Second World War, with the specific aim of muting the extreme ends of the political spectrum. We suspect these various constitutional restraints will continue to hold firm.”
French lessons
Looking to future events, Hobbs says the French elections “represent the biggest risk to the Euro’s existence”. How would a second round victory for Marine Le Pen impact on whether Barclays Wealth’s mainly UK-based clients should invest in gilts or bond? Hobbs answers instantly: “If Le Pen won, all things being equal, you’d expect bonds to do very well and stocks to do very badly in a short space of time. Those clients who were exposed to stocks would feel very nervous. There are two rounds of the French elections and then the lower house elections, so you’d have a month where people were wondering whether she’d manage to assemble sufficient parliamentary clout to carry out her anti-EU, anti euro agenda. In that time you’d surely see the Euro suffer, with implications for sterling assets. Gilts would probably become very popular; stock markets around the world would do very badly, at least until the results of the lower house elections came in.”
The prediction, like the others Hobbs delivers, has clearly been worked on and thought out, and will be sent through the bank on one of his 8.15 morning calls. “To whatever extent is possible we’re trying to ensure that the whole business is saying the same thing – in meeting rooms and on client calls. We aim to have a unified message, making sure that the narrative around economies and markets that we present to clients has been rigorously stress tested and plausibly fits together. Then our clients can think of Barclays as an institution that works incredibly hard to provide accurate, accessible and profitable commentary and advice around the world’s capital markets.”