Invest February 2013

investment solutions monthly 02 / 2013

EFG Asset Management

China’s Reform Creates OpportunitiesNew Capital China Equity Fund

Ride The Renminbi RoundaboutMarket & Macro Round-up

CRO On The GoChina Recovery Certifi cate

Contact your Client Relationship Offi cer to access our latest investment communications:

• Invest: Investment Solutions Monthly

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Coming soon …

Invest PLUS: Crafting investment solutions

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TAP INTO THE GROWING ASIAN CONSUMER MARKETS FOR GROWTH AND INCOME IN EQUITIES AND FIXED INCOME.

EFGAMNEW CAPITAL FUNDS

To fi nd out more about our Asia investment capabilities contact your Client Relationship Offi cer.

01/02

02 Investment SolutionsLooking for growth: Investing Ideas in China

03 Market & Macro Round-UpRide the Renminbi Roundabout

05 Mutual Fund SelectionLaunch of EFGAM’s Funds Best Ideas

06 Investment SpotlightNew Capital China Equity Fund

07 Hot TopicLook Outside the Border to Invest Inside China

09 CRO On The GoChina Recovery Certifi cate

10 Question TimeTail Risk Solutions

contents

EFGAM’s investment team would like to introduce the new title Invest: Investment

Solutions Monthly. The new title comes with new content. The magazine will add the columns: Investment Solutions and CRO On The Go to its continuing coverage of macroeconomics and research. This issue concentrates on investment solutions related to China’s recovery and announces the launch of EFGAM’s Funds Best Ideas.

Moz Afzal, Chief Investment Offi cer

The value of investments can go down as well as up and clients may get back less than they invest. Issued by EFG Asset Management (UK) Limited.EFG Asset Management (UK) Limited is authorised and regulated by the Financial Services Authority. Registered No.7389746. Registered address: EFG Asset Management (UK) Limited,

Leconfi eld House, Curzon Street, London W1J 5JB, United Kingdom, telephone +44 (0)20 7491 9111.

Investment Solutions

Investing in 2013 isn’t going to be any easier than the previous year. In 2012,

markets were resilient in the face of countless sources of uncertainty that seemed to emanate from all corners of the world.There have been some recent resolutions with the US election and the election of Mario Draghi to head the European Central Bank. However, real interest rates are negative in many countries, government yields remain ultra low and growth, despite showing some signs of accelerating, is a scarce resource. In that context, EFGAM’s main mission remains to identify investment solutions that can generate decent income and fi nd attractive capital appreciation for our investors, while limiting the risk of a drawdown.

One of EFGAM’s key themes for 2013 is China’s recovery. Economic indicators continue to reinforce our view that Chinese growth has been recovering since the fourth quarter, after slowing for seven consecutive quarters. We see China’s economic recovery gaining momentum with economic reforms being the focus in the coming years. And Chinese assets are cheap; the Shanghai Composite index is trading at historically low levels in

both price-to-book and price-to-earnings values. We thus believe that the recovery of Chinese equities that started in November is just at the beginning of a larger upward trend.

So what are the best ways to play China’s recovery? One of the most direct ways to benefi t from this theme is to buy Chinese equities through the New Capital China Equity Fund or one of the external funds from our recommended list (example: First State China Growth Fund). Another way to get exposure is to invest into different Asian assets that are all linked to China’s economy (examples: North Asian equity markets, Asian REITs, Asian Fixed Income, etc.). We also expect some stocks from developed markets to benefi t from the China recovery. (See article on pages 7/8) Last but not least, investing into renminbi-denominated vehicles could further enhance your returns. In a world where China’s economic might is increasing while many developed world central banks are – intentionally or not – debasing their currencies, we view the prospects for the renminbi as favourable.

As always, we strive to adapt our set of solutions to the risk profi le of our clients. For our more conservative investors, we issued a three-year structured note which is exposed to the assets mentioned above but with full principal protection (in renminbi). (See article on page 9)

by Charles-Henry MonchauHead of Investments, EuropeGeneva offi ce

How to playChina’s recovery?1) China Equity funds2) Asian assets linked

to China’s economy (e.g. Pan-Asian equities)

3) Developed markets stocks with high exposure to China

4) A structured note linked to a basket investing in these three themes in a diversified way

Looking for growth:

Chinain

InvestingIdeas

Your capital is at risk and you may not get back your original investment.

investment solutions monthly / 02 / 2013

03/04

In recent years, the Chinese renminbi has strengthened almost unremittingly with

a 25% gain against the US dollar since 2005. There was a brief respite during the global fi nancial crisis, when the Chinese authorities maintained a constant exchange rate versus the greenback over a period when the global economic backdrop was highly uncertain and fragile. Since then the Chinese authorities have faced regular attacks from US politicians accusing them of manipulating the currency to boost exports.

Then, last summer, the unexpected happened: the renminbi experienced a period of weakness, which lasted for several months. By the standards of any other free-fl oating currency the weakness was relatively modest, particularly for an emerging market. Nonetheless, the unusual nature of the move has led some to question whether or not this is the end of the line for further trend strength in China’s currency.

When currencies appreciate by a large amount over a prolonged period of time they will, ipso facto, be less competitive. The question is: at what point does a currency shift from being undervalued to being fairly valued? As with almost all fi nancial securities, there is no easy way to answer this. Even if we were able to establish a sensible estimate of where fair value lies, that would not guarantee that the fair value is ever reached. Nonetheless, we have found it instructive to consider the pressures on China’s currency according to a number of different metrics. The more of these metrics that are in agreement with each other, the greater the degree of confi dence we have in terms of the anticipated strength and direction of any move.

market & macro round-up

Roundabout

Ridethe Renminbi

by Daniel MurrayGlobal Head of ResearchLondon offi ce

When countries run trade surpluses, the financial mechanics behind the flow of goods and services implies that foreigners are demanding more of that country’s currency than the inhabitants of the country are demanding of foreign currencies. This is a convoluted way of saying that there is pressure on the currency to appreciate. At an average of over $25 billion a month for the past six months, China’s trade surplus is below the levels reached in 2008/09 but still remains large. The size of a country’s foreign exchange reserves is a closely related concept. It provides an indication of a country’s ability to defend its currency and will, most likely, act as a deterrent to any attack in the first instance. China has the world’s largest foreign exchange reserves, currently over $3.3 trillion. What also matters is the speed with which those reserves are changing. Here we find less support for the currency since the pace of Chinese reserve accumulation has slowed down considerably in recent months.

Another metric we have found useful is relative unit labour costs. This is hard to estimate because we need to take into account relative wages, relative productivity as well as the rate of change of these two

factors, none of which are readily available from easy-to-access and reliable data sources. When the gap between China’s unit labour costs and those in the US and other developed economies was very large this did not matter so much because we knew that there was still a strong incentive to outsource manufacturing to China. Now that Chinese relative wages have been growing so quickly at the same time as the exchange rate has been appreciating, that gap has narrowed. Indeed some companies are now relocating manufacturing facilities back to the developed world. The precise gap between manufacturing costs in China and those in other countries will vary by company and country and in some cases it would appear to have been closed completely. However we still believe that, on average, China remains a low cost manufacturing country and this would tend to support the currency.

The relative growth rate between two countries is also helpful when thinking about appropriate currency valuation, since it is associated with relative interest rates, bond yields and profit growth, all of which influence the flow of capital. Our view of the world is that, after three decades or so of double-digit growth, China’s trend growth

rate will slow from here although we do not expect it to collapse. Using the history of other developing economies as a guide provides us with a crude rule of thumb that we should expect trend Chinese growth to roughly halve over the next decade, although this will not happen over night. Even so, the Chinese economy will continue to grow much more rapidly than the developed world, which will encourage capital inflows.

Taking all these factors together suggests to us that there remains more room for the renminbi to appreciate. Add to these factors longer term support from indicators of purchasing power parity and net foreign assets and the case for the renminbi appears strong. The one constraining factor here is the fact that the currency is not free floating. While this should not detract from supportive fundamentals over the medium to long term, the more the currency is allowed to trade freely in international markets, the greater the propensity for a portion of onshore Chinese assets to try to find a home offshore. This is likely to add to currency volatility. However, with such supportive fundamentals we would view any short-term weakness as an opportunity to buy.


In February, EFGAM launched a new star-ranking system, FBI to

further develop its fund recommendation capabilities. The fund rankings use both the fi rm’s macroeconomic research and forecasting combined with the individual fund research expertise. This brings a more holistic approach to fund selection.Here’s how it works. There are currently 16 preferred funds that have been singled out for the Funds Best Ideas list. The 16 best idea funds are evaluated and ranked with a star system to better help Client Relationship Offi cers fi nd the best fund for their investors. These funds originate from the 105 funds on EFGAMs Mutual Fund List. To show how much research has gone into the process, investors must note that we fi nd the best 105 funds from a total universe of more than 40,000 funds. The overall top ranking for a portfolio on the Funds Best Ideas is fi ve stars.

The fi rst rating is a bottom up rating for the fund in isolation. We continue to examine the same fundamentals as before. We evaluate the fund’s team to make sure it is experienced and has depth and breadth; the stability of the fi rm and its risk management; the investment process to make sure it is sound and proven and of course, we check the

performance to make sure it works. The maximum stars for this rating is three.

The next rating is for the fund asset class category (example: US equities). A fund receives one additional star if it is aligned with EFGAM’s macro economic investment calls.

The third rating is for the fund’s style. We will appoint one additional star to a fund that we believe has a good investment style for the current market conditions.

Taking an example, the fund team has identifi ed Sky Harbor US Short Duration High Yield as being a best in class fund within the US high yield area. Hence the bottom up rating for the fund is a maximum 3 stars. The fund receives an additional star as EFGAM has a positive asset allocation view on US High yield. Finally, the fund receives a 5th star as the style view is positive for short duration.

If a fund outperforms its relative index, we might consider taking some profi ts and move it off the Funds Best Ideas list. Indeed, if we make a mistake, we will sell it early and keep losses to a minimum. The FBI list will be updated monthly to refl ect the most recent asset allocation views and any changes to underlyingfund and style views. However, we do not anticipate dramatic changes month to month. To help CROs articulate FBI to clients we will produce bespoke factsheets which include our rating rationale and key fund data. The FBI fund list can be found on Invest in the Mutual Funds area.

05/06

Launchof EFGAM’s (FBI) Funds Best Ideas

Mutual Fund Selection

The fund rankings use both the fi rm’s macro economic research and forecasting combined with the individual fund research expertise. This brings a more holistic approach to fund selection.

by Andrew HarradineHead of Long Only Research

London offi ce

EFG Ratings

Fund Ratings

Asset Allocation Rating

Style Rating

Overall Rating

Investment Spotlight

China’s new leadership should soon stimulate a long-awaited stock

rally. During the past two years, the China equity market performed well in the first quarter but lost momentum quickly and became one of the worst performing markets, disappointing investors.However, we expect 2013 will take a different path. The change of Chinese leadership is an important catalyst, never seen before. Under the new leadership of Xi, China will undergo a series of reforms ranging from capital account liberalisation, VAT, land and tax reform as well as an increase in social spending. This will break the old monopoly and create opportunities for new players. From an investment perspective, one of the ways to capture China's economic growth is through individual “stock picking” not China Exchange Traded Funds. China ETFs often have large shareholdings of heavily weighted big capitalisation stocks, which will likely undergo market devaluation under the reforms.

The New Capital China Equity Fund exploits three major investment themes: Renminbi (RMB) currency Internationalisation combined with banking reform, domestic

consumption and the Internet boom. Chinese banks are required to preserve more capital to meet Basel III, creating a boom in non-bank financials. The fund has built up positions in the insurance sector with names such as New China Life Insurance Co Ltd. and PICC Property & Casualty for their attractive valuations. There are some other niche finance players, including China Everbright International Ltd., a listed asset manager; Far East Horizon, a leasing company; Hong Kong Exchange, a platform for distributing RMB financial products. These companies may benefit from the growing financial market in China.

The fund also holds more than a 25% exposure in the consumer sector. We like the auto and smartphone industries where penetration rates remain low. Dah Chong Hong is our favourite auto servicing company that will benefit from the rising auto-using population. We have built up the fund’s position in the consumer staples sector, which currently has a relatively high price-to-earnings ratio because we believe the market is underestimating the growth potential.

Tencent, which has grown into China’s largest and most used Internet service portal and is known as China’s Facebook, is also our favourite Internet play. The fund also has significant positions in a few telecom equipment makers.

They may benefit from the rising telecom capital expenditure in view of the skyrocketing Internet traffic. We also invest in IT companies that are expanding their business' coverage of increasingly popular cloud computing.

Reform May Create Opportunitiesby Mansfield Mok

Fund Manager of New Capital China Equity Fund

Hong Kong office

The China equity market formed a significant bottom last year. It is now at the early stage of a bull market.

NewCapital China Equity Fund

Your capital is at risk and you may not get back your original investment.


by Robin MilwayHead of Equity ResearchLondon offi ce

07/08

Hot Topic

During the last few years, investing in companies selling

products to China proved to be lucrative. One of the best investments are in companies with products that China can’t produce. The glaringly obvious example is commodities. China at this stage in its development cycle requires large quantities of commodities that it does not have. For an investor, the direct investment route for this is, of course, a very volatile trade and fraught with danger for all but the most skillful (or lucky) commodities trader. The next most direct option is to invest in the junior miners but given the price volatility and patchy access to fi nancing that many have been victims

of for the last few years, this is again probably not a desirable option for most investors. Investing in the super-majors such as BHP Billiton and Rio Tinto has its own set of issues from a corporate perspective, with their almost unblemished track record of destroying economic value through their capital allocation decisions. So fi nally this leaves our preferred option of service providers to the mining industry. We’ve chosen two businesses, both based in Australia that should continue to benefi t from the ongoing growth in China.

One of our top stock picks is Orica Mining Services Ltd., a global mining services and chemicals company based in Melbourne, Australia. It is the global leader in commercial explosive systems for the resources and infrastructure industries. The majority of profi ts were derived from selling explosives to miners across Asia Pacifi c. Orica’s end markets are very diverse with the majority of

outside the border to invest inside

ChinaLookook

supply going to coal, copper and gold industries. The explosives business has high barriers to entry and through Orica’s leading position it enjoys robust margins.

Reliability and safety are the principal requirements for clients. Therefore, reputation is paramount and exports and imports are highly regulated and licensing is required for handling and transportation of goods. Importantly, input costs are passed through and Orica has no commodity price exposure within its contracted revenues insulating it from the violent swings in the commodity cycle. Future growth could come from its expansion plans on the western coast of Australia that will open up a new market for iron ore – a major import of China.

We also like ALS Laboratory Group Ltd., a leading Testing Inspection & Certification (TIC) services provider based in Brisbane, Australia. The TIC industry has traditionally facilitated global trade with vital services such as cargo inspection and goods

testing. ALS offers global best practices and leading systems and processes that can perform a greater range of services cheaper than local in-house labs often can. ALS is primarily a network of laboratories and is one of the largest players in the minerals testing industry with global scale and leading analytical services. The services cover the entire development and production cycle of a mine; from exploration and assaying the ore content in rock samples to on-site extraction processes and product shipment.

ALS is remunerated by volumes, not pricing and this business is very profitable with over 30% operating margins. Half of spending on global metals exploration is directed on gold and 33% copper, nickel and zinc. Of this exploration a third is undertaken on “greenfield” undeveloped ore bodies. This greenfield is the volatile part of ALS’ business and therefore could benefit from resurgent commodities demand from China.

China at this stage in its development cycle requires large quantities of commodities that it does not have. We’ve chosen two businesses, commodity services providers, both based in Australia that should continue to benefit from the ongoing growth in China: Orica and ALS.


09/10

Is it possible to ride an expected recovery in China without too much risk of falling off?

by Simon HodgesHead of UK Investment Advisory Services

London offi ce

China Recovery Certifi cate

With EFGAM’s Managed Opportunity Strategy

(MOS), investors can choose an investment solution that focuses on the recovery opportunity in China. It is an investment solution that offers full exposure (100% participation) to an (EFGAM) actively managed multi-asset investment strategy with 100% principal repayment in renminbi (CNH) over three years. One thing to note is that investors should be aware that the principal repayment is applicable at maturity only, meaning that investors may lose principal should they sell the Certifi cate during the term.

The ability to gain exposure to a relatively short-dated actively managed multi-asset portfolio with a principal repayment characteristic is possible through a structured certifi cate. These are fl exible structures that allow us to identify unique investment opportunities and tailor these to our client base without the costly administration and construction of a unit trust or other similar fund alternatives.

It is likely that the Certifi cate will underperform in a bull market, particularly in the early stages. However, we have introduced this investment solution to you because we believe that the market will continue to be uncertain and, as a result, potentially volatile. Therefore, a principal repayment Certifi cate that offers active exposure to a diversifi ed portfolio should still provide investors with an exciting investment opportunity but in a more conservative format.

The Certifi cate note will invest in assets and markets that are impacted by China’s economy in the broadest sense. EFGAM believes that China’s economy will continue to strengthen after the recent economic slow down and that this will have a positive effect on a number of risky assets in Asia, which includes Chinese but also Taiwanese or Hong Kong stocks but may also have an impact on other asset classes such as commodities.

The MOS China Recovery note is denominated in renminbi (CNH), so non CNH investors will have currency risk. However we believe that the fundamentals with regard to the renminbi strongly favour the currency continuing to strengthen over the next few years. In terms of fundamental valuation, a reasonable expectation would be a 5% appreciation per annum over each of the next fi ve years. Therefore, we

believe that the Certifi cate offers a unique opportunity for investors to enjoy the expected recovery in China and at the same time manage potential volatility and downside risks.

Clients that have a medium risk appetite and believe that conditions for a Chinese recovery look set to improve might consider an investment. Investors who have excess cash; the capacity to take currency risk; wish to target potential returns higher than cash deposits and are willing to invest for a three-year period should speak to their CRO about the opportunity.

We believe that EFGAM’s MOS Certifi cate offers a unique opportunity for investors to enjoy the expected recovery in China and at the same time manage potential volatility and downside risks.

on the GoCRO

QTimeuestion

CRO QuestionGiven that periods when all asset classes closely correlate are becoming more frequent and that this tends to negate the capital preservation qualities of multi-asset and diversifi ed portfolios such as Alpha, what strategies can EFGAM employ within client portfolios to avoid the draw-downs that we have seen in recent years? Can we expect to see the use of options and short Exchange Traded Funds (ETFs) or other types of securities?

AnswerThis is a question about hedging tail risks, which are low probability events found at either end of a normal distribution curve. Typically, such tail risk events are associated with sharply negative market movements such as the continuously volatile period of 2008, or the sharp concentrated falls in summer 2011. During these unstable times an “insurance policy” would have helped cushion even

diversifi ed portfolios from precipitous falls. However being insured at all times can be very expensive and if not managed carefully can negatively impact portfolio performance. Here’s a list of some of the tail risk strategies we have analysed or used in the past and of course we can use in the future when appropriate.

VIX Index and Futures: VIX represents the Chicago Board Options Exchange Market Volatility Index, a popular measure of fear. It actually measures the implied volatility of options on the S&P 500 index. This is like an insurance policy for a market crash. In times of panic people are willing to pay more for insurance so the VIX goes up. However, as with most insurance, it costs most after a market risk event.

ETFs: Another way of insuring from unexpected events is to use a halfway house that gives “30% insurance” and doesn’t cost as much as total insurance. For example, the Nomura Voltage Mid-Term Source ETF (the “Fund”) aims to capture spikes in volatility, while mitigating the cost of holding a long-volatility position through VIX futures.

Hedge Funds: Some hedge funds are also designed to try to protect the downside. For example, we have previously analysed the Man TailProtect Fund, which seeks to make outsized returns during times of crisis while not giving back too much in calm or rising markets.

CTAs: The term Commodity Trading Advisors (CTAs) refers to a type of strategy that works well as a hedge when there are persistent downward trends in equity markets such as in 2008. However, CTAs don’t work so well when there are sudden reversals, as occurred during the August 2011 short-term crash. CTAs typically invest in futures and forwards on currencies, commodities and bond indices.

Treasuries: Owning US Treasuries can be a useful insurance mechanism. Currently, however, the degree of usefulness is severely compromised by the fact that government bond yields are already so low. When yields were higher US Treasuries not only provided a small real return during normal market conditions but they also tended to rally hard when equity markets crashed. They were therefore a type of insurance you got paid to hold. With yields so low it will be hard for them to move much lower so the ability of Treasuries to rally from here is limited. As a result using US Treasuries as insurance has become very expensive.

by Moz AfzalChief Investment Offi cer

London offi ce

tail risk solutions


This document has been approved and issued by EFG Private Bank Limited, acting as the distributor of products and services provided, managed and administered by EFG Asset Management (UK) Limited.This document has been approved solely for distribution in the United Kingdom and is intended for the private use of the clients and investors of EFG Private Bank Limited and EFG Asset Management (UK) Limited – its publication or availability in any other jurisdiction or country may be contrary to local law or regulation and persons who come into possession of this document should inform themselves of and observe any restrictions. This document may not be reproduced or disclosed (in whole or in part) to any other person without our prior written permission.This document does not constitute an offer or recommendation to buy, sell or solicit any investment product or service, and is not intended to be a fi nal representation of the terms and conditions of any product or service. The investments mentioned in this document may not be suitable for all recipients and you should seek professional advice if you are in doubt. Although information in this document has been obtained from sources believed to be

reliable, neither EFG Private Bank Limited nor EFG Asset Management (UK) Limited represents or warrants its accuracy, and such information may be incomplete or condensed. All estimates and opinions in this document constitute our judgment as of the date of the document and may be subject to change without notice. We will not be responsible for the consequences of reliance upon any opinion or statement contained herein, and expressly disclaim any liability, including incidental or consequential damages, arising from any errors or omissions.The value of investments and the income derived from them can fall as well as rise, and past performance is no indicator of future performance. Investment products may be subject to investment risks, involving but not limited to, currency exchange and market risks, fl uctuations in value, liquidity risk and, where applicable, possible loss of principal invested.Issued by EFG Private Bank Limited, which is authorised and regulated by the Financial Services Authority and is a member of the London Stock Exchange. RegisteredNo: 2321802. Registered address: EFG Private Bank Limited, Leconfi eld House, Curzon Street, London W1J 5JB, United Kingdom, telephone +44 (0)20 7491 9111.

Contact your Client Relationship Offi cer to access our latest investment communications:

• Invest: Investment Solutions Monthly

• Invest PLUS

• Quarterly Market Review

• Research Notes

• Strategic Insight

RESEARCH & PUBLICATIONSEFGAM

Coming soon …

Invest PLUS: Crafting investment solutions

for growth, income and capital preservation

2012 has been an extraordinarily good

year for fixed income, with most high

yield and emerging market indices

registering good double digit returns. It is

interesting to note that for the year to

date, high yield has exhibited higher

returns with lower volatility than US

Treasuries.

However, the wall of money going into

fixed income looks to us to be

indiscriminate – allocators have jumped in

without necessarily understanding the

fundamentals, and particularly in Europe’s

case, some of the technical issues. A case

in point is the potential dislocation of

European high yield in the event of a

Spanish downgrade, which in our view is

a real possibility. The European high yield

market currently stands at around

Eur200bn (Figure 1). If Spain did get a

downgrade, some Eur75bn or so will go

from investment grade to high yield,

which will mean that 37% of all European

high yield will come from Spanish

companies (Figure 2).

Issue 20 – 4 December 2012

www.efgam.com

Risks and Opportunities in European High Yield

by Moz Afzal

Strategic Insight Perspectives on risk & opportunityPerspectives on risk & opportunity

Why is this event such a big deal? Well,

fund managers will have to sell their

existing European high yield bonds to

make room for the downgraded Spanish

bonds and this switch will cause

disruption. In fact, the last time we saw

something similar was the downgrade of

Ford and GM in 2005 to junk which forced

the whole US high yield market to widen

in spread terms by 40bps. At the time

Ford and GM only represented 7% of the

EUR-denominated Spanish Debt € 75 bn

EUR-denominated EU HY Debt € 202 bn

USD-denominated Spanish Debt $20 bn

USD-denominated US HY Debt $1,001 bn

Spanish Debt Total $112 bn

Global HY Total $1,385 bn

Figure 1

US high yield market (Figure 3). At the

European high yield level, one would

therefore assume an impact that is five

times bigger.

At the global high yield level Spanish

downgraded bonds will represent an

expansion in the universe by around 8%.

Still significant, but the impact will be

more like that of GM and Ford (Figure 4),

where we saw a short sharp rise in high

Figure 2EUR-denominated Spain Debt As % of

Total EU HY

GM: $43bn (May 2005)

Ford: $41bn (Sept 2005)

(both ~7% of US HY at the time)

Figure 3GM and Ford Downgraded in 2005

Source: BOAML

Source: BOAML

Source: BOAML

EU HY 63%

Spain 37%

Issue 20 – 4 December 2012

Knocking on Asia’s door

Iss

ue

1

EFG

Ass

et M

anag

emen

t

make room for the downgraded Spanish

disruption. In fact, the last time we saw

something similar was the downgrade of

Ford and GM in 2005 to junk which forced

the whole US high yield market to widen

Ford and GM only represented 7% of the

more like that of GM and Ford (Figure 4),

where we saw a short sharp rise in high

yield spreads and then stability.

Figure 3

monthly11 / 2012

EFG Asset Management

In Vino VeritasToast avant-garde wine investments

Investment Spotlight: Bonds: blended, not stirred New Capital Asia Pacific Bond Fund

Hot Topic: Fixed income ETPs Some track while others go off the rails

11 / 2012

Winter 2013

QUARTERLY REVIEW

This issue:

Central banks: A change

of approach

US: Post-crisis adjustment

Europe: An end to exit risk?

Asia: Megacities and

middle classes

Special focus: Bond market seesaw

Invest February 2013

Documents

Transcript of Invest February 2013