5 stock pros confess their biggest market worries

Reuters

MADRID (MarketWatch) � The headaches besetting globally oriented investment managers are constant, but the pain essentially has two sources: Slow economic growth and the European sovereign debt crisis.

Greece has struck a debt-restructuring deal with its private creditors, and a path seems clear to a second bailout from international lenders, but investment managers are sensitive to the volatility and losses that international-markets stockholders suffered in 2011. And there�s still a lengthy list of problems to confront.

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For a sense of how asset managers are coping with the current global investment climate and to understand their worst fears, MarketWatch spoke to five seasoned professionals who are based outside of the U.S., from London to Hong Kong, about their biggest stock-market worries:

Khiem Do: Baring Asset Management

�How is it going to end?� Khiem Do asked about Europe�s debt troubles. �How much has to be written off and who is going to take the haircut?�

In response to this uncertainty, Do, manager of Baring Asset Management�s closed-end Asia Pacific Fund, Inc. APB �and head of the investment firm�s multi-asset management for Asia, is steering clear of banks in the U.S. and in Europe that are closer to the crisis. The Hong Kong-based fund manager is investing in Asian banks instead. Read more: 5 money moves an Asian stock-fund manager is making now.

At the same time, Do added, �We don�t want to be too bearish on the U.S. economy right now.� So the fund manager favors U.S. utilities, telecommunications, consumer staples, technology and energy stocks.

�If there were to be a massive selloff in European banks due to any of the macro risk,� he said, these sectors would still do all right. Said Do: �They are more stable companies.� Read more: Greek political leaders reach deal.

Rainer Baumann: Sustainable Asset Management

Rainer Baumann, Zurich-based head of portfolio management at Sustainable Asset Management, is concerned that the U.S. economic growth this year will fall short of expectations of 2%-plus.

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�Fundamentals seem to be fragile,� Baumann said.

Sustainable Asset Management, which oversees about $11.4 billion in assets, invests only invest in companies that are sustainable leaders, which acts as a natural hedge. �Our companies are more stable and robust,� he said.

Plus, he added, companies with a clear way of addressing long-term trends, problems and risks can often work through tough times.