Monthly Update - 30Apr22
Updated: Feb 20
· Markets came under pressure as an increasingly hawkish Fed drove the worlds discount rate higher (US 10-year treasury yields rose 58bps to 2.94%). Longer-dated, higher-rated assets sensitive to the rate adjustment suffered disproportionately.
· Both equities and bonds fell. Credit spreads widened and volatility spiked. FAANG earnings peaked - with slowing growth, Russian sanctions, and China lockdown supply chain constraints blamed for a dim outlook.
· US Q1 GDP surprised with a negative print. The USD rallied against major currencies as global liquidity tightened. Gold failed to protect portfolios. Cash went from trash to King. Bear market alert!
· The Fund (-3.3%) performed reasonably well on a relative basis, outperforming global equities (-8.1%) by 480bps – our large US financial short partly offsetting China Tech losses.
NUMBERS & OUTLOOK:
· We’ve cleaned up the Fund numbers – separating the 1.) Incubation account returns (Grey) and 2.) Audited family office Fund results (Black). Both sets represent DBS final money weighted rate of return calculations net of transaction fees.
· Returns prior to the Feb21 asset injection represent incubation account returns while awaiting MAS SFO approval.
· We are pleased with the audited track record (last 15 months), delivering a healthy +23.9% return vs the MSCI AWCI (Global Equities) +2.1%, representing almost 22% outperformance over the period.
· Returns continue to meet our multi-level target of; 1.) Positive annual results , 2) Greater than (>) 15% pa and 3.) Greater than (>) global equities (as represented by the MSCI ACWI) – with less than half the market downside volatility.
· We see significant alpha opportunity as Chinese policy diverges from the world off a depressed base.
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