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.

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November 2017 || Newsletter

Investment Perspective

October was another strong month for global equity markets as the MSCI World Index gained 2.5% in local currencies. The ongoing rally was primarily sustained by positive economic data, robust third quarter corporate earnings and a dovish European Central Bank. Rising expectations for US tax cuts and a general election victory by Japan PM Abe also contributed to the supportive environment for risk assets. The US dollar extended its September rebound and appreciated versus all the other major currencies. Bond yields edged lower in the Eurozone while the yield on 10-year Treasuries ended the month only four basis points higher than at the end of September.

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October 2017 || Newsletter

Investment Perspective

The trends observed during September were not necessarily those anticipated by many seasoned market investors and commentators. A rise of volatility and a correction of equity markets had often been put forward but the end result was a good performance of equity markets and volatility close to record lows. Bond yields trended higher while the US dollar finally managed to regain some composure as it rebounded against most currencies. Within the equity asset class, European equities clearly outperformed, for the first time since April. Emerging market equities were impacted by some profit-taking and the recovery of the dollar. The dollar was also a headwind for gold as were the rising real interest rates.

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September 2017 || Newsletter

Investment Perspective

Global equities managed to end August virtually unchanged even though it was quite a volatile month for financial markets. Sovereign debt performed well as key central bankers refrained from discussing any changes to their monetary policies whereas gold benefited from safe haven demand and lower real interest rates. The euro reached new year-highs against other major currencies and peaked close to a parity of 1.21 versus the dollar before retreating somewhat. Finally, oil prices dropped as severe flooding in Texas restricted  refining capacity, resulting in lower demand for crude oil.

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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.

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Perspectivas de inversión, julio 2017

En esta publicación semestral repasaremos las expectativas de enero y analizaremos algunos de los principales indicadores económicos actuales antes de definir la asignación de activos que recomendamos para el segundo semestre.
Incrementamos nuestra asignación de renta variable a principios del año
A consecuencia de nuestras perspectivas positivas, tanto macroeconómicas como de renta variable, para 2017, hemos posicionado las carteras de forma dinámica mediante el incremento de la asignación hacia la clase de activos de renta variable. También habíamos expresado nuestra confianza en que los precios de la renta variable deberían estar apoyados por una aceleración del crecimiento global de los beneficios y, hasta la fecha, esto es lo que ha sucedido.
Habíamos reafirmado nuestra firme convicción acerca de los mercados emergentes y nuestra exposición global a la renta variable a comienzos del año estaba bien diversificada entre las diferentes regiones. Desde entonces hemos aumentado la asignación hacia la bolsa europea y también de los mercados emergentes. Los fondos alternativos fueron motivo de preocupación tras la decepcionante rentabilidad registrada en 2016, aunque los diferentes fondos a los que estamos expuestos han mostrado un comportamiento mucho mejor en lo que va de año y han contribuido a la sólida rentabilidad de las carteras.

 

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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.

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May 2017 || Newsletter

Investment Perspective

The month of April got off to a difficult start for risk assets before ending on a very positive note. Following a strong first quarter for equities, investors turned more cautious in view of rising U.S. tensions with North Korea, Syria and Russia, and concerns about the French presidential elections. Gold, Treasuries, Bunds and the yen were well bid while volatility spiked as the VIX Index reached levels last observed after Trump’s election last November. However, these trends were quickly reversed and volatility collapsed to a ten-year low. Better-than expected first-quarter earnings reports and the first-round results of the French elections were the main drivers for strong equity gains during the last week of the month.

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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.

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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. 

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Perspectivas de inversión, enero 2017

Los mercados empezaron 2016 a la baja ante la preocupación por la economía china y los precios tan bajos de las materias primas pero mejoraron levemente hasta principios del verano. El referéndum británico del 23 de junio que dio lugar al Brexit fue un golpe inesperado que provocó otra corrección de la renta variable y el desplome de la libra esterlina. Sin embargo, en cuestión de semanas, los mercados de renta variable ya habían recuperado sus pérdidas y se estabilizaron. Sorprendentemente, la inesperada victoria de Donald Trump sólo desencadenó una apuesta muy breve por los activos seguros, dado que los activos arriesgados se recuperaron casi inmediatamente y cerraron el año al alza.

Seguramente el 2016 se recordará como el año en que por fin terminó el ciclo de alza de la renta fija de estos últimos 35 años.

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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.

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Nov. 2016 || Newsletter

Investment Perspective
October proved to be a relatively quiet month for equity markets with the MSCI World Index declining by 0.8%. Weaker currencies contributed to the outperformance of European and Japanese equities over US ones during a period of widespread dollar strength. However, the main trend observed during the past month was the pick-up of bond yields, resulting in above-average price movements for the asset class. Highly-rated sovereign debt and credit were the most impacted fixed-income market segments, reflected by the 1.7% drop of the Citigroup Euro Broad Investment Grade Index. Investors appear to be taking account of the fact that the main central banks have reached the limits of their unprecedented policy actions and that record low yield levels are no longer sustainable.    

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Oct. 2016 || Newsletter

Investment Perspective
During a month where global equities ended largely unchanged, the policies of Central Banks continued to be the main drivers of the markets’ behaviour in September. Following a positive start to the month, equities retreated after ECB President Mario Draghi disappointed investors by keeping the bank’s policy unchanged and by not committing to more stimulus once the current QE program expires in March 2017. Draghi gave the impression that the ECB had largely fulfilled its mandate as he urged governments to help out with looser tax and spending policy and economic reforms. Stocks were also hurt by the weakness of the European banking sector following the news that the U.S. Justice Department was claiming $14 billion from Deutsche Bank to settle a probe related to the subprime mortgage crisis in 2008.

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Sept. 2016 || Newsletter

Investment Perspective
The main trends observed during a quiet month of August were the extension of the tightening of credit and emerging market debt spreads, the strong rebound of oil prices and for developed markets’ equities to remain range bound; the equities of emerging markets also continued to outperform on the back of positive inflows. In contrast, the US dollar proved to be quite volatile. Following a weak start to the month, the dollar rallied as expectations of higher US interest rates were boosted by comments from Fed Chair Janet Yellen and Vice Chairman Stanley Fischer at the end of the month.

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