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25/04/2024NachrichtenFixed Income & ConvertiblesFrédéric Loisel

Is geopolitical risk a market risk?

Reminder of portfolio management strategies

We have already written a great deal about central banks, and we will return to the subject again in this monthly report. On the subject of monetary policy, the borderline between forward-looking analysis and repetitive rhetoric has now been reached. The Swiss National Bank’s (SNB) surprise start to the cycle of key rate cuts does not revisit the subject (the SNB’s decision is also motivated by a problem of overvaluation of the Swiss franc), or even the fashionable thesis that the ECB could finally cut rates before the FED. The duration of a longer-than-expected pause, which has been our scenario since last year, has now been taken on board by the markets. Additional volatility would come from an acceleration in the timing and pace of the downturn. With this in mind, we are comfortable with our ‚cruising‘ duration of 4.

25/04/2024NachrichtenOutlookJean-Pierre Petit

Where are US and European long-term yields heading?

US long-term yields (T-Note 10Y) have risen by 70bp since the start of the year (including 35bp in the last month), mainly as a result of downward revisions to expectations of future Fed rate cuts. At the start of the year, futures were forecasting more than 6 Fed funds rate cuts by 2024. We are now down to 2, which seems about right. In this sense, the upward movement seen in recent months corresponds to a form of normalisation from excessively low levels at the end of autumn 2023.

25/04/2024NachrichtenFixed Income & ConvertiblesXavier Nicolas

5 questions to a fund manager – Xavier Nicolas

After 30 years of falling rates and 2 years of rising rates, what is the state of the bond market today?

Despite a number of disruptive events – the fall of the Berlin Wall, the 1994 bond crash, the Gulf War, the bursting of the dotcom bubble and the collapse of Lehman Brothers – long yields fell almost uninterrupted for more than 30 years between 1990 and 2020, before rising sharply between 2021 and 2023, wiping out almost 10 years of performance. Over these years, the market has undergone a profound transformation, helped by the growing indebtedness of governments. The scope of available instruments has widened. Limited to government debt in 1990, bank, corporate and private debt have since been added to the pool. The instruments have also become more sophisticated, with the arrival and growing importance of futures markets, structured products and, finally, synthetic products, fuelling an increasingly flourishing industry. Hedge funds, thematic funds, index funds, ETFs, total return funds, dated funds – each year brought its cohort of increasingly innovative products.

28/03/202428/03/2024NachrichtenRegional EquityRupert Kimber

Five questions to a portfolio manager – Rupert Kimber

1. The market has performed well for the past 3 years. Given that there have been many false starts for Japan over the last 30 years, what makes this time different?

Corporate governance/changes in the corporate landscape/ shareholder activism are three factors, now well established, that should contribute to a fundamental change in market dynamics.

28/03/202428/03/2024NachrichtenRegional EquityJean-Pierre Petit

How has the Japanese market become attractive again?

The Japanese market has outperformed the global market in local currency terms over the past 2 years (see chart below).

28/03/202428/03/2024NachrichtenRegional EquityRupert Kimber

Trip Observations

The fund manager of our japanese equity fund Taiko Japan, Rupert Kimber, recently came back from a trip to Japan. Here are his notes.

28/03/202428/03/2024NachrichtenRegional EquityRupert Kimber, Tim Shanagher

Taiko Japan – Market outlook and review

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26/02/202426/02/2024NachrichtenFixed Income & ConvertiblesFrédéric Loisel

Jerome Powell and the boustrophedon

If we are looking for the principle that guides Jerome Powell in his communication with the markets, we can find it in the boustrophedon style of writing that goes from right to left and then from left to right. Used in archaic Greece until 402 B.C., this type of writing was inspired by the march of an ox marking its furrow in a field.

26/02/202426/02/2024NachrichtenOutlookJean-Pierre Petit

Geopolitics in 2024: a year of transition before a possible shock in 2025

First of all, it should be pointed out that much may change with the possible election of Donald Trump on 5 November. But the effects of his election will not be felt until 2025 (when he takes office on 20 January that year).

Let’s now take a look at the „hottest“ geopolitical issues that will continue to accompany us this year.

26/02/202426/02/2024NachrichtenInfrastructure EquityMark Ebert

Five questions for an investment manager

1. You have worked for several major banks in your time in finance. How have you seen the development of alternative assets, such as private equity and infrastructure, developing in private client portfolios?

Alternative assets such as private equity are now very much in focus for private clients. When I was responsible for private equity at Lombard Odier, buy-out and venture capital funds were sought after, but had to be specifically structured for private clients. Now private investors are also exploring infrastructure, property, credit, and secondary private equity in an attempt to diversify their portfolios. Challenges such as liquidity and institutional structures are now being addressed.