Newsletter

Apr. 2017 || Newsletter

Investment Perspective

The modest percentage changes recorded by certain asset classes during March fail to tell the whole story. In particular, significant movements were observed during the month within the bond and FX markets. For example, the 10-year US Treasury yield climbed from 2.39% to 2.63% on March 13 before retreating back to its start-of-month level. This was largely due to the Federal Reserve appearing as less hawkish following its March decision to hike rates by 0.25% to a new 0.75% - 1% range. 10-year Bunds followed a similar path as they spiked from 0.21% to 0.48% to end the month at 0.33% as investors reacted to the minutes of the latest ECB meeting. The dollar also experienced a rollercoaster ride as it consistently lost support until recovering at the tail-end of the month.    

Apr. 2017 || Newsletter

Investment Perspective

The modest percentage changes recorded by certain asset classes during March fail to tell the whole story. In particular, significant movements were observed during the month within the bond and FX markets. For example, the 10-year US Treasury yield climbed from 2.39% to 2.63% on March 13 before retreating back to its start-of-month level. This was largely due to the Federal Reserve appearing as less hawkish following its March decision to hike rates by 0.25% to a new 0.75% - 1% range. 10-year Bunds followed a similar path as they spiked from 0.21% to 0.48% to end the month at 0.33% as investors reacted to the minutes of the latest ECB meeting. The dollar also experienced a rollercoaster ride as it consistently lost support until recovering at the tail-end of the month.

April 2016 || Newsletter

Investment Perspective
During March, global equity markets continued to claw back early-year losses with the MSCI World Local Index climbing by 5% thus limiting its first quarter loss to 2.5%. With a 13% monthly gain, emerging market equities outperformed significantly on the back of improving sentiment, a rebound of commodity prices and dollar weakness. The dollar effectively had one of its worst quarters in more than five years, reflected by the 3.7% drop of the Dollar Index.

April 2016 || Newsletter

Investment Perspective
During March, global equity markets continued to claw back early-year losses with the MSCI World Local Index climbing by 5% thus limiting its first quarter loss to 2.5%. With a 13% monthly gain, emerging market equities outperformed significantly on the back of improving sentiment, a rebound of commodity prices and dollar weakness. The dollar effectively had one of its worst quarters in more than five years, reflected by the 3.7% drop of the Dollar Index.

August 2017 || Newsletter

Investment Perspective

The euro was the star performer during a month of July which also saw global equity markets record additional gains. Developed sovereign debt markets regained their composure following the late-June/early-July correction while the US dollar continued to depreciate against most of its peers. The equities of emerging markets outperformed once again as they recorded a 4.4% gain in local currency terms. In contrast, the appreciation of the euro prevented equities of the Eurozone from making any significant gains.

August 2017 || Newsletter

Investment Perspective

The euro was the star performer during a month of July which also saw global equity markets record additional gains. Developed sovereign debt markets regained their composure following the late-June/early-July correction while the US dollar continued to depreciate against most of its peers. The equities of emerging markets outperformed once again as they recorded a 4.4% gain in local currency terms. In contrast, the appreciation of the euro prevented equities of the Eurozone from making any significant gains.

Dec. 2016 || Newsletter

Investment Perspective

November was an eventful month for financial markets following the election of Donald Trump as the next US president. Following an initial shock and a strong bid for safe haven assets as soon as the results were first announced, the ensuing reaction of the markets turned out to be as unexpected as Trump’s victory itself. 

Dec. 2016 || Newsletter

Investment Perspective
November was an eventful month for financial markets following the election of Donald Trump as the next US president. Following an initial shock and a strong bid for safe haven assets as soon as the results were first announced, the ensuing reaction of the markets turned out to be as unexpected as Trump’s victory itself.

December 2017 || Newsletter

Investment Perspective

November turned out to be quite eventful, especially when compared to the relatively quiet previous months. The performances of equity markets across the world were far from being homogeneous; US equities hit new records, emerging markets ended flat and European equities lost ground, due to the impact of an appreciating euro. Short-lived stress was observed in both the US and European high-yield bond markets whereas Chinese assets were affected by authorities’ efforts to limit levels of debt. Finally, the high-flying technology sector was impacted by a late-month sell-off. Profit-taking and a switch into sectors seen benefiting the most from the potential reduction in the US corporate tax rate were behind this correction of tech stocks..

December 2017 || Newsletter

Investment Perspective

November turned out to be quite eventful, especially when compared to the relatively quiet previous months. The performances of equity markets across the world were far from being homogeneous; US equities hit new records, emerging markets ended flat and European equities lost ground, due to the impact of an appreciating euro. Short-lived stress was observed in both the US and European high-yield bond markets whereas Chinese assets were affected by authorities’ efforts to limit levels of debt. Finally, the high-flying technology sector was impacted by a late-month sell-off. Profit-taking and a switch into sectors seen benefiting the most from the potential reduction in the US corporate tax rate were behind this correction of tech stocks.

Feb. 2017 || Newsletter

Investment Perspective

Markets are having a bit of a rest after quite a steep climb at the end of 2016.

However, many trends observed since the beginning of the year have been in contrast with consensus expectations; emerging market equities have distinctly outperformed, the dollar has lost ground and gold has had a solid month on the back of a weaker dollar and stable US bond yields.

The most significant of all the market moves that took place during the past month was the rise of yields on euro-region bonds.

2017 has started on a positive note for our portfolios, thanks not only to the contributions from equities but also from our fixed-income allocation, which has been largely immune from the rising yields observed in Europe.

February 2016 || Newsletter

Investment Perspective
Global financial markets were under considerable stress all through January as market sentiment was negatively impacted by the selling pressure on Chinese assets and the sharp drop of oil prices. The correction of equity markets was widespread while risky credit instruments suffered from the significant widening of their spreads. Under these conditions, the best performing assets unsurprisingly included government bonds of the developed markets, gold and the Japanese yen until the Bank of Japan unexpectedly announced the introduction of negative interest rates.

February 2016 || Newsletter

Investment Perspective
Global financial markets were under considerable stress all through January as market sentiment was negatively impacted by the selling pressure on Chinese assets and the sharp drop of oil prices. The correction of equity markets was widespread while risky credit instruments suffered from the significant widening of their spreads. Under these conditions, the best performing assets unsurprisingly included government bonds of the developed markets, gold and the Japanese yen until the Bank of Japan unexpectedly announced the introduction of negative interest rates.

June 2016 || Newsletter

Investment Perspective
The month of May was proving to be quite uneventful as major equity markets evolved in a trendless manner within tight ranges. However, at month-end, they were shaken out of their lethargy by the realization that the Federal Reserve could well raise interest rates as early as June. This contributed to a positive end to the month for global equity markets and to additional gains for the dollar, while gold continued to slide and Treasury yields moved higher. The developed equity markets registered modest monthly gains while the prospect of higher US interest rates hurt the assets of emerging markets.

June 2016 || Newsletter

Investment Perspective
The month of May was proving to be quite uneventful as major equity markets evolved in a trendless manner within tight ranges. However, at month-end, they were shaken out of their lethargy by the realization that the Federal Reserve could well raise interest rates as early as June. This contributed to a positive end to the month for global equity markets and to additional gains for the dollar, while gold continued to slide and Treasury yields moved higher. The developed equity markets registered modest monthly gains while the prospect of higher US interest rates hurt the assets of emerging markets.

June 2017 || Newsletter

Investment Perspective

May was another positive month for global equity markets whereas the dollar remained under pressure and government yields declined. US equity indexes ended the month at record levels, emerging markets continued to outperform while European equity markets took a breather following a period of strength. As largely expected, the centrist candidate Emmanuel Macron was elected French president and it was a case of “sell on the news” as European equities peaked immediately following the second round’s outcome.   

June 2017 || Newsletter

Investment Perspective

May was another positive month for global equity markets whereas the dollar remained under pressure and government yields declined. US equity indexes ended the month at record levels, emerging markets continued to outperform while European equity markets took a breather following a period of strength. As largely expected, the centrist candidate Emmanuel Macron was elected French president and it was a case of “sell on the news” as European equities peaked immediately following the second round’s outcome.

Mar. 2017 || Newsletter

Investment Perspective

The trends observed in February were clearly entrenched, with global equity prices moving higher, bond yields declining and the dollar recovering some of its early year losses against other majors.

Equity markets continue to be driven by an improving economic environment, higher inflation expectations and anticipations of supportive policies by the Trump administration. Despite concerns about the timing and implementation of these new US policies and rising political risks in Europe, the levels of volatility have remained close to record lows. This is reflected by the reading of the CBOE Volatility Index which is currently about 25 percent below its five-year average. 

Mar. 2017 || Newsletter

Investment Perspective

The trends observed in February were clearly entrenched, with global equity prices moving higher, bond yields declining and the dollar recovering some of its early year losses against other majors.

Equity markets continue to be driven by an improving economic environment, higher inflation expectations and anticipations of supportive policies by the Trump administration. Despite concerns about the timing and implementation of these new US policies and rising political risks in Europe, the levels of volatility have remained close to record lows. This is reflected by the reading of the CBOE Volatility Index which is currently about 25 percent below its five-year average.        

March 2016 || Newsletter

Investment Perspective
Global equity markets fell for a third month but ended well above the mid-February lows. Market sentiment gradually improved on signs that financial tensions in China were abating and on better price trends for commodities. This was best illustrated by the 29% rebound of oil prices from February 11 onwards, following the severe decline observed since the start of the year. Nevertheless, assets deemed the safest performed the best and included German bunds, whose 10-year yield collapsed to 11bps, as well as gold which appreciated by 11% to reach $1’239 an ounce.