January update

BY WILLEM VINKE 

Monthly Fund Commentary
28 Feb 2018

BY WILLEM VINKE 

In January, NYMEX WTI CRUDE gained 7.13% to finish the month at $64.73. The US 10y treasury yield increased 12.45% to close the month at 2.7050, following positive market reactions to the US Tax Reform bill. Optimism over upcoming and strong corporate earnings supported equity markets after their positive start to the year.

On the negative side, a short term government shutdown was looming as migration and funding for a children’s health insurance program were discussed in Parliament. During the month, the UK Parliament cleared the EU withdrawal bill, which was then passed to the House of Lords for final approval, with further news on how, if any, progress was being made.

The German 10y treasury yield increased 63.15% to finish the month at 0.697%. At the same time, the Swiss 10y treasury yield rose by 176.63%, closing the month at 0.114%. The UK 10y gilt yield increased by 26.94% to finish the month at 1.51%.

Throughout the month, gold increased by 3.25% to finish at $1,345.14, with silver rising by 2.41%, closing the month at $17.3455. During the month, the Euro strengthened against the US$, finishing at 1.2414 (up 3.41%). At the same time the Euro weakened against the sterling, closing the month at 0.8748 (down 1.50%).

STRATEGIC EUROPE VALUE FUND

The Fund* lost 1.69% in January. Financials, Consumer Discretionary and Materials were the best performing sectors in the benchmark, whilst the worst performing were Consumer Staples, Utilities and Real Estate.

In terms of total return, the Fund’s top performing stocks were Sophos, Wirecard and Telenet, while the worst ones were Pandora, Shire and Grandvision. During the month, the Investment Adviser exited the Diageo position on valuation grounds.

EUR I Class

STRATEGIC GLOBAL QUALITY FUND

The Fund returned 2.34% in January. Consumer Discretionary, Technology and Financials were the best performing sectors in the benchmark, whilst the worst performing were Utilities, Real Estate and Telecoms.

The Fund’s top performing stocks were: Mastercard, Wirecard and Google (Alphabet) , while the worst ones were Shire, Criteo and Relx. During the month, the team exited the Diageo position and established a position in Oracle, both on valuation grounds. 

The views and statements contained herein are those of Lofoten Asset Management in their capacity as Investment Adviser to the Fund as of 16/02/18 and are based on internal research and modelling.