October update

In October, NYMEX WTI CRUDE was up 5.2% to finish the month at $54.38. The US 10y treasury yield increased by 1.96%, finishing at 2.3793%. Throughout the month, concerns about the failure to finalise Trump’s Tax plan and the fact that any change may be delayed to 2019 became apparent.

Monthly Fund Commentary
27 Nov 2017

In October, NYMEX WTI CRUDE was up 5.2% to finish the month at $54.38. The US 10y treasury yield increased by 1.96%, finishing at 2.3793%. Throughout the month, concerns about the failure to finalise Trump’s Tax plan and the fact that any change may be delayed to 2019 became apparent.

The German 10y treasury yield decreased by 21.70% to finish the month 0.363%, while the Swiss 10y treasury yield decreased by 264.81%, closing the month at -0.079%. The UK 10y gilt yield fell by 2.42% to finish the month at 1.332%, as Brexit negotiations were still proving challenging and reports questioned whether enough progress had been made.

Gold fell by 0.65% to finish at $1,271.45, whereas silver increased by 0.38% to finish the month at $16.7175. Over the month, the Euro weakened against the US$ and sterling, closing at 1.1646 (down 1.42%) and 0.8767 (down 0.60%) respectively.

STRATEGIC EUROPE VALUE FUND

The Fund* outperformed its benchmark (up 1.96%) by 0.22% in October. Energy, Information Technology and Materials were the best performing sectors in the benchmark whilst the worst performing were Healthcare, Telecoms and Financials. The Fund’s top performing stocks were Sophos, Wirecard and RELX, whereas the worst performing were Convatec, Liberty Global and Swedbank.

During the month, the Investment Adviser exited a position in NETS and Swedbank. At the same time, the team established a position in Liberty Global. NETS was sold after the company was bid for. The position in Swedbank was exited due to the deteriorating situation in Sweden. Liberty Global is the largest international cable company, operating in 14 countries, including the U.K., Germany, the Netherlands, Belgium, and Switzerland. The shares have many levers which should cause it to perform, from underlying internet trends to company specific success in the UK cable or mobile spaces. According to the Investment Adviser, the Company could easily return 40%+ of its market cap to shareholders over the next 2-3years.

STRATEGIC GLOBAL QUALITY FUND

The Fund outperformed its benchmark (up 1.89%) by 0.56% in October. Information Technology, Materials and Utilities were the best performing sectors in the benchmark, whilst the worst performing were Telecoms, Healthcare and Consumer Staples. The Fund’s top performing stocks were Adobe, Microsoft and Wirecard, whereas the worst performing were Phillip Morris, Clorox and Colgate.

* 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 17/11/17 and are based on internal research and modelling.