Europe in October

BY WILLEM VINKE

Monthly Fund Commentary
18 Nov 2016

BY WILLEM VINKE

The Fund’s benchmark returned -0.82% in October. NYMEX WTI CRUDE was down 2.86% on the month. The US 10year treasury yield increased by 23bps to finish the month at 1.8255 as US elections were driving sentiment. The German 10year yield increased by 28bps to finish the month at 0.163% and the Swiss 10year yield also increased by 15bps to finish the month at -0.393%. The UK 10year gilt yield increased 50bps to finish the month at 1.25% as investors began feeling more confident that the UK would not be pursuing a “Hard Brexit”.

Gold traded down 2.94% to finish at $1277.21 as investors sold safe haven assets ahead of the US election, with silver trading down 6.59% to finish the month at $17.91. The Euro weakened over the month against the US$ down 2.26% to 1.10981 and gained against sterling up 3.55% to 0.89685.

The Fund underperformed its benchmark by 4.28%* in October. Financials, Energy and Materials were the best performing sectors in the benchmark whilst the worst performing were: Real Estate, IT and Healthcare. The Fund’s top performing stocks were: Reynolds, Pandora and CTS and the worst were: Sophos, Grandvision and Novo Nordisk.

During the month, the Investment Adviser bought Danone and Novo Nordisk and sold Reynolds American on valuation grounds. Eurotunnel was sold after it became apparent that the Brexit situation was far more unstable than previously thought.

 

*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 08/11/16 and are based on internal research and modelling.