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Market Review: July

14 Aug 2019

Dear Investors,

The MSCI All Countries index gained about 2.6% in July, masking the fact that in local currency most markets had rather muted returns. Returns in the USA (+1.5%), Europe (+0.3%) and Emerging Markets (-0.9%) were much less impressive when denominated in local currency. Clearly, the lion’s share of this return, which was expressed in Euro, came from forex effects, as the USD appreciated significantly against the Euro and most other major currencies.

Perhaps markets had expected more from the Federal Reserve. While the Fed lowered interest rates for the first time in eleven years, Powell also gave clear signals that the cut should not be seen as the start of another lengthy monetary stimulus package. In Europe monetary policy also dominated the news as the Governing Council implied that investors could see more stimulus in the future in the form of further interest rate cuts or asset purchasing programs.

Vector Navigator (+3.0%) and Flexible (+1.1%) performed a little better than their respective benchmarks during the month.

Best regards,

Nils, Thierry & Werner