Tue, 01/01/2013 - 09:25
The majority of London & Capital’s US managed portfolios posted a positive return in November amid optimism that Central Bank stimulus programmes are bolstering growth in the world’s biggest economies.
Thanks to London & Capital’s portfolio construction and dynamic asset allocation strategy the portfolios have delivered strong risk-adjusted returns.
One of the main contributions to performance came from bonds, with all parts of the fixed income markets helping to boost performance. Corporate and emerging market bonds were supported by low default rates, a US earnings season that turned out to be fairly robust and a continued chase for yield in a world of low interest rates. Government bonds were supported by an easing in the Eurozone sovereign debt crisis and by the continued lack of significant inflationary pressures.
There was also a positive contribution from equities, despite a mid-month wobble caused by concerns that an Obama election victory would create a stalemate in finding a solution for the US Fiscal Cliff. Equities eventually recovered thanks to more positive comments from US politicians, easing concerns over Greece not receiving the latest tranche of its bail-out money, and signs of economic life in the US and China.
Commodities benefitted from signs of economic stabilisation in China. This was due to looser economic policy and the expectation of more to come now that the political leadership change has taken place.
Absolute return funds contributed positively thanks to improved credit markets, and successful macro and equity relative value positions.
Looking forward, London & Capital is encouraged by the unlimited monetary intervention of the Federal Reserve and the ECB, which ultimately is helping to stabilise the global economy. However, the company is still concerned about the on-going economic stagnation in Europe and continues to monitor the risks and opportunities in the portfolios and manage them accordingly.
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