Performance The IDH reference portfolio returned 3.8% in ...
2
IDH Capital, Cameron Dewey In der Hinterzelg 2, 8700 Küsnacht, Switzerland www.idh-capital.com Tel (+41 44)586 1577 [email protected] March 23 rd , 2017 Performance The IDH reference portfolio returned 3.8% in Swiss Francs during February, bringing the portfolio’s total return since inception to 53.8%. IDH Capital Reference Portfolio since inception in Swiss Francs Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD Total 2012 -0.6 % 0.8% -1.6% -0.6% 3.7% 0.8% 2.0% 1.5% 1.5% 1.9% 9.6% 9.6% 2013 3.8% -0.2% 1.0% 1.6% 3.4% -5.4% 6.7% 0.6% 3.9% 3.4% 0.8% 1.8% 23.1% 34.1% 2014 -2.4% 1.3% 1.0% -1.0% 1.3% -1.5% -0.4% 2.0% -0.4% 0.3% 5.3% 1.2% 6.7% 43.9% 2015 -8.7% 10.3% -1.2% -1.0% 1.4% -3.1% 4.9% -7.4% -0.9% 9.3% 3.8% -4.1% 1.5% 46.0% 2016 -5.4% -3.8% 2.7% -2.0% 6.5% -6.4% 6.0% 2.5% 0.4% -1.6% -1.4% 4.9% 1.3% 47.9% 2017 0.1% 3.8% 4.0% 53.8% Performance in CHF, unaudited, after taxes and transaction costs. The reference portfolio is not subject to management or performance fees. The Great Reflate Debate A year ago, investor concerns focused on the risk of global deflation. We wrote at the time of the crashing commodity super cycle and the resulting temporary drag on inflation (see our October 2015 market comment). Since mid 2016, the commodity complex, particularly oil, settled into a trading range. As the correction cycled through the data inflation picked up in the both the US and Europe, along with growth. A year on, and the dialogue has switched from deflation fears to a reflation trade fueled by Trump’s spending and deregulation policies and Draghi’s loose monetary stance. Crude oil vs US inflation, 2007-2017 Source: Tradingeconomics.com Crude oil vs EU inflation, 2007-2017 European inflation began its decline in 2012 as region’s debt crisis started to bite and troubled governments implemented sever internal devaluation policies. The strong inflation rebound at the end of 2016 raises questions about how much longer the ECB will run its quantitative easing policy.
Transcript of Performance The IDH reference portfolio returned 3.8% in ...
IDH Capital, Cameron Dewey In der Hinterzelg 2, 8700 Küsnacht, Switzerland www.idh-capital.com Tel (+41 44)586 1577 [email protected]
March 23rd, 2017 Performance The IDH reference portfolio returned 3.8% in Swiss Francs during February, bringing the portfolio’s total return since inception to 53.8%.
IDH Capital Reference Portfolio since inception in Swiss Francs Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD Total
2012 -0.6 % 0.8% -1.6% -0.6% 3.7% 0.8% 2.0% 1.5% 1.5% 1.9% 9.6% 9.6% 2013 3.8% -0.2% 1.0% 1.6% 3.4% -5.4% 6.7% 0.6% 3.9% 3.4% 0.8% 1.8% 23.1% 34.1% 2014 -2.4% 1.3% 1.0% -1.0% 1.3% -1.5% -0.4% 2.0% -0.4% 0.3% 5.3% 1.2% 6.7% 43.9% 2015 -8.7% 10.3% -1.2% -1.0% 1.4% -3.1% 4.9% -7.4% -0.9% 9.3% 3.8% -4.1% 1.5% 46.0% 2016 -5.4% -3.8% 2.7% -2.0% 6.5% -6.4% 6.0% 2.5% 0.4% -1.6% -1.4% 4.9% 1.3% 47.9% 2017 0.1% 3.8% 4.0% 53.8%
Performance in CHF, unaudited, after taxes and transaction costs. The reference portfolio is not subject to management or performance fees.
The Great Reflate Debate A year ago, investor concerns focused on the risk of global deflation. We wrote at the time of the crashing commodity super cycle and the resulting temporary drag on inflation (see our October 2015 market comment). Since mid 2016, the commodity complex, particularly oil, settled into a trading range. As the correction cycled through the data inflation picked up in the both the US and Europe, along with growth. A year on, and the dialogue has switched from deflation fears to a reflation trade fueled by Trump’s spending and deregulation policies and Draghi’s loose monetary stance. Crude oil vs US inflation, 2007-2017
Source: Tradingeconomics.com Crude oil vs EU inflation, 2007-2017
European inflation began its decline in 2012 as region’s debt crisis started to bite and troubled governments implemented sever internal devaluation policies. The strong inflation rebound at the end of 2016 raises questions about how much longer the ECB will run its quantitative easing policy.
IDH Capital, Cameron Dewey In der Hinterzelg 2, 8700 Küsnacht, Switzerland www.idh-capital.com Tel (+41 44)586 1577 [email protected]
Source: Tradingeconomics.com While fiscal stimulus and accommodating central banks help, the real driver for equities for the remainder of 2017 will not be political policies or even European election outcomes. Stocks will gain on the existing strength of global GDP, the leveraged impact on earnings of accelerating US and European growth and, for the Euro zone, the closing of the massive underweight position of European equities in investor portfolios. If US equities are at risk of cooling off from the Trump trade euphoria, European markets, on the other hand, will rally as the worst-case scenarios fail to materialize. Over the past month, we added three positions to our portfolio. The first was the engineering company ABB to gain some cyclical exposure. Our second investment was in the Swiss banking software company Temenos, a dominant player in its field. And finally, we initiated a position in the Swiss engineering company VAT Group, a world leader in vacuum valves and a major supplier to makers of lithography machines. Regards, Cameron Disclaimer: All performance calculations are not independently audited and are reported before fees but after taxes and commissions. Client portfolio returns will vary from that of the reference portfolio depending on when the account was initiated, asset flows, and fees. All views expressed in this report are solely those of IDH Capital and are not a recommendation to buy or sell any of the securities mentioned. This letter is intended as an informational update for clients of IDH Capital and is not a solicitation of business.
