Europe in September 2017

BY WILLEM VINKE

Monthly Fund Commentary
23 Oct 2017

BY WILLEM VINKE

​In September, NYMEX WTI CRUDE was up 9.4% to finish the month at $51.67. The US 10y treasury yield increased 10.23%, finishing at 2.33% as positive news regarding Trump’s Tax plan began to make headlines and success seemed closer.

The German 10y treasury yield increased 28.28% to close the month at 0.464%. At the same time, the Swiss 10y treasury yield increased by 84.4% to finish the month at -0.022%. The UK 10y gilt yield rose by 31.93%, finishing the month at 1.365%.

Gold decreased by 3.15% to finish at $1,279.75 as investors took profits from safe haven assets. Silver also decreased and closed the month at $16.655 (down 5.26%). The Euro weakened throughout September, finishing at 1.1814 against the US$ (down 0.81%) and closing at 0.8820 against the Sterling (4.24%).

The Fund* returned 2.71% in September, underperforming its benchmark by 1.18%. Energy, Industrials and Consumer Discretionary were the best performing sectors in the benchmark, whilst the worst performing ones were Utilities, Real Estate and Consumer Staples. The Fund’s top performing stocks were Sophos, Astra Zeneca and SBM Offshore, whereas the worst ones were Criteo, Pandora and Heineken.

During the month, the Investment Adviser exited a position in Unicredit and established positions in Equifax and Telenet. Unicredit was sold as the Investment Adviser found a better investment alternative. Equifax was bought following the sell-off caused by the company’s data breach. The Company has been held by the Investment Adviser before and is well known by the team. Before establishing a position in Telenet in September, the Investment Adviser had been following the Company for some time. The Company’s regulations have become clearer recently and Free Cash Flows are expected to improve from now. on The team took a position in Telenet following a recent pull back.

* 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 05/10/17 and are based on internal research and modelling.