Europe in February

BY WILLEM VINKE

Monthly Fund Commentary
16 Mar 2016

BY WILLEM VINKE

The Fund’s benchmark was off 2.2% in February following ongoing concerns regarding the health of the global economy, weaker than expected economic data and credit spreads widening.

NYMEX WTI Crude fell to below $29 before rallying to $33.75. German bond yields fell significantly in February with the 10year declining from 0.33% to 0.10% and the US 10year treasury declining from 1.92% to 1.74%. Gold strengthened as investors looked for exposure to safer assets, the price rose from $1,118 to $1,238. Political uncertainties from the announcement of the UK’s decision on whether to leave Europe (BREXIT) (referendum on 23rd June) impacted sterling and saw it fall against all currencies (US$ to a low of 1.3871 and a Euro € low of 1.2645). Towards the end of the month hopes seemed to grow that the ECB would announce further financial stimulus at its next meeting on 10th March.

The Fund (EUR class) outperformed its benchmark by 25bp in February. Materials, Energy and Industrials were the best performing sectors in the benchmark whilst the worst performing were; Utilities, Financials and Information Technology. The Fund’s top
performing stocks were: Intercontinental Hotels, Intertrust and Wolters Kluwer and the worst Anheuser Bush InBev, Dixons and Swedish Match. During the month the Investment Adviser re-initiated a position in SES SA.

The views and statements contained herein are those of Lofoten Asset Management in their capacity as Investment Adviser to the Fund as of 4/03/16 and are based on internal research and modelling.