Insights

  • MONTHLY FUND COMMENTARY

In May, the Japanese stock market rose soundly amid retreating uncertainties over US policies, an increased likelihood of an interest rate hike in the US and alleviation of geopolitical risk in Europe. Investors also reacted positively to corporate earnings results with the Nikkei 225 closing up 2.4% MoM at 19,650.6 and the TOPIX closing at 1,568.4, also up 2.4% MoM.

  • VIDEO

EI Sturdza’s fixed income portfolio manager, Eric Vanraes discusses his three bond funds covering North America, Europe and emerging markets.

Eric then highlights the importance of risk management in fixed income portfolios and why the team’s macro-economic view is driven by central bank activity. Lastly, he addresses the prospect of the ECB tapering QE in the near-term and the likely market impact of such a move

  • VIDEO

Bertrand Faure, portfolio manager for EI Sturdza’s Strategic European Smaller Companies Fund, discusses how small-cap equity markets in Europe have evolved in recent years.

  • VIDEO

Mitsuhiro Yuasa, portfolio manager for EI Sturdza’s Strategic Japan Opportunities Fund, outlines the background to Rheos Capital Works and the recent partnership with EI Sturdza to form the Strategic Japan Opportunities Fund.

Mitsuhiro then highlights his investment process and shares his views on how Japan’s economy is changing as investors search for companies with strong leaders and higher levels of productivity.

  • MONTHLY FUND COMMENTARY

The second half of April was a good period for European equities, with the MSCI Europe Index (MXEU) rising to close up 1.3% on a monthly basis. In the early part of April the index had traded sideways, but after a large drawdown on 18th April, rebounded strongly on 24th April.

  • MONTHLY FUND COMMENTARY

In April, US economic data was disappointing with the notable exception of housing and unemployment figures. The Fed still expects two more rate hikes this year but, more importantly, has begun discussions regarding how to reduce the size of its huge balance sheet. Its securities portfolio could shrink in early 2018. 

  • MONTHLY FUND COMMENTARY

European financial markets were in a “wait and see” mode for the main part of April until the first round election result in France on 23rd April. Macron’s win in the first round, with polls at the time indicating a 60/40 probability of winning the election, removed the main overhang in Europe for now.

 

  • MONTHLY FUND COMMENTARY

Overall, the Japanese market rose slightly in April, but small caps which had previously rallied declined during the period. The North Korean threat continuously capped the Japanese market, but investors took comfort for a while after several important dates passed without incident.

  • MONTHLY FUND COMMENTARY

The performance of China stocks in the A share market and the HK market diverged in April. The MSCI China total return index continued to trend up 2.7% whereas the CSI 300 index lost 0.5%. Financial deleveraging and tighter regulation, which was triggered by President Xi’s speech to control risk in the financial markets, drove up the 10-year China bond yield and led to a sell-off in the domestic A share market. The HK market was, however, left unscathed this time.

  • MONTHLY FUND COMMENTARY

The Fund’s benchmark returned 1.69% in April. Gold increased by 1.53% to finish at $1,268.28 as political concerns surrounding the upcoming French Elections and concerns over President Trump’s budget saw investors buying safer assets.

  • MONTHLY FUND COMMENTARY

In the first half of April, the Japanese stock market was generally weak as geopolitical risks grew in the wake of North Korea’s ballistic missile launch. However, in the second half of the month, concerns over geopolitical risks related to North Korea and the French presidential election faded away. The market later rallied on expectations of progress on US policy formation, together with a positive reaction to Japan’s corporate earnings results.

  • MONTHLY FUND COMMENTARY

As the first third of 2017 comes to end, (1) the general state of the U.S. economy, its direction, and (2) the ongoing earnings season garner attention.

The Fund has performed well YTD as a result of its focus on tech, internet, education, auto component plays, exporters and HK/global retail. Apart from the HK/global retail exposure, which is a turn around story, the sectors aforementioned have all enjoyed strong secular growth stories not sensitive to cyclical upheaval.

  • MONTHLY FUND COMMENTARY

Japanese small caps rose continuously in March whilst the overall market traded sideways due mainly to the weaker dollar against the Japanese yen.

  • MONTHLY FUND COMMENTARY

In March, European financial markets continued their upward move, with little discrimination and an extremely low implied volatility.

  • MONTHLY FUND COMMENTARY

China stocks were up for the third consecutive month. The MSCI China index climbed another 2.1% in March, finishing the first quarter with a return of 12.9%.

  • MONTHLY FUND COMMENTARY

In March, US economic indicators were led by strong housing and unemployment figures and consumer confidence data at a 16-year record high. The Fed raised its key rate to 0.75%-1% and still expects two more rate hikes this year, despite Ms Yellen confirming that the FOMC will adopt a cautious approach to further rate increases.

  • MONTHLY FUND COMMENTARY

The Fund’s benchmark returned 3.34% in March. NYMEX WTI CRUDE was down 6.31% on the month to finish at $50.60. The US 10year treasury yield was unchanged, finishing the month at 2.39% after President Trump failed to get his initial healthcare reforms through and as concerns arose that not all his budget reforms would get approved.

  • MONTHLY FUND COMMENTARY

March was a very good month for the European equity market both in absolute and relative terms. On an absolute basis during the month, the MSCI Europe Index rose +3.0% having risen strongly on four days (the first and last three days of the month), whilst in the middle of March the market traded sideways.

  • MONTHLY FUND COMMENTARY

In March, the Japanese stock market rallied based on the expectation there would be an early rate hike in the US, but subsequently fell after the Fed raised the key rate. This reflected a retreating view that the pace of hikes would accelerate, as well as uncertainties over US government policy manoeuvres.

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