Europe in April 2017

BY WILLEM VINKE

Monthly Fund Commentary
18 May 2017

BY WILLEM VINKE

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.

NYMEX WTI CRUDE was down 2.51% on the month to finish at $49.33. The US 10year treasury yield decreased by 11bps to finish the month at 2.28% following concerns over Trump’s budget, which was still to be approved. The German 10year treasury yield decreased 1bp to finish the month 0.32% with the Swiss 10year treasury yield also decreasing 2bps to finish the month at -0.11%. The UK 10year gilt yield decreased by 6bps to finish the month at 1.09% as the rhetoric between the UK Government and the EU regarding the details of the Brexit terms continued. Silver decreased by 5.75% to finish the month at $17.22. The Euro strengthened over the month against the US$ up 2.28% at 1.09 and weakened against sterling, down 0.85% to 0.84.

The Fund outperformed its benchmark by 0.24% in April*. Industrials, Consumer Discretionary and Real Estate were the best performing sectors in the benchmark whilst the worst performing were: Telecoms, Energy & Utilities. The Fund’s top performing stocks were: Sophos, Sage and Smith & Nephew and the worst were: Pandora, Barclays and Phillip Morris.

During the month the Fund exited the position in: ASR Nederland, Bankia & Lloyds and bought Criteo.

The Fund sold ASR, Bankia and Lloyds to rebalance the portfolio as inflation expectations have come down, and to reduce UK exposure. Criteo operates in a fast growing part of the online advertising market, using algorithms to predict users’ intent thereby enabling them to assist in the purchasing and selling of advertising inventory. Criteo allows clients to see the ROI on their advertising expenditure, something increasingly sought after, and given its first mover advantage the algorithms will only improve as the client data set grows. The Investment Adviser believes the shares are undervalued given the company’s top and bottom line dynamics.

* EUR I Class.

 

The views and statements contained herein are those of Lofoten Asset Management in their capacity as Investment Adviser to the Fund as of 12/05/17 and are based on internal research and modelling.