Europe in July

BY WILLEM VINKE

Monthly Fund Commentary
19 Jul 2016

BY WILLEM VINKE

The UK’s EU referendum and result impacted all markets and bond yields.

The UK voted to leave the EU on the 23rd June. Though the polls were inconclusive up to the day before the result, London had anticipated a remain result and the surprise Brexit had a significant impact on all markets. The Euro weakened slightly over the month against the US$ from 1.1132 to 1.1106 and gained against sterling from 0.7686 to 0.8343. UK 10year gilt yields fell from 1.427% to 0.8652%, as 10year US treasuries declined from 1.847% to finish the month at 1.47%, and German 10year treasuries declined from 0.138% to finish the month at -0.132%. The Swiss 10year treasury declined from -0.347% to finish the month at -0.613%. Meanwhile Gold traded up 8.77% on the month to finish at $1321.9 with Silver trading up 15.37% to finish the month at $18.7148. NYMEX WTI CRUDE was down 1.57% on the month.

The Fund outperformed its benchmark by 401bps* in June, down by 24bps whilst the benchmark was down 425bps. Energy and Consumer staples were the best performing sectors in the benchmark whilst the worst performing were Financials and Consumer Discretionary. The Fund’s top contributing stocks were Intertrust and Reynolds and the worst were CTS Eventim and WorldPay. During the month the Fund exited positions in Henkel and Visa and established new positions in Red Electrica, Groupe Eurotunnel and Sophos.

 

* 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 14/07/16 and are based on internal research and modelling.