Europe in January

BY WILLEM VINKE

Monthly Fund Commentary
18 Feb 2016

BY WILLEM VINKE

The Investment Adviser’s benchmark was down 6.22% in January following concerns regarding China, weakening oil prices and the risk of a global slowdown. Currencies were a major factor at the beginning of the month with the People’s Bank of China under pressure to consider devaluing the Yuan.

Japan surprised the market when it introduced a negative interest rate policy on excess reserves held at the central bank and cut its benchmark rate to -0.1%. Oil continued to be volatile as oversupply and lack of demand caused the price of NYMEX WTI Crude to fall from $37.95 to $33.62, down 11.4% in the month despite having rallied from the lows of $27.5. Concerns from bond investors saw the German 10year fall from 0.63% to 0.33% and the US 10year treasuries from 2.27% to 1.92%, Gold benefitted from concerns elsewhere and strengthened from $1,074 to $1,118 as it was seen as a “safer” asset.

The Fund outperformed its benchmark by 1.8% in January, Consumer Staples & Information Technology were the best performing sectors in the benchmark whilst the worst performing sectors were: Finance (on worries about “bad banks” in Italy), Materials & Consumer Discretionary. The Fund’s top performing stocks were: Reynolds, Paysafe and Pandora and the worst: Shire, Qiagen and UBS. During the month the Investment Adviser closed positions in Accor & UBS.

The views and statements contained herein are those of Lofoten Asset Management in their capacity as Investment Adviser to the Fund as of 5/02/16 and are based on internal research and modelling.