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Stock Markets Rebound

12 feb 2019

Dear investors,

After a dreadful end to 2018 equity markets recovered quite substantially in January. As headline inflation fell to 1.9% in the United States the Federal Reserve announced that the need to tighten monetary policy had diminished. On the other side of the Atlantic concerns over economic growth led ECB policy makers to keep the forward guidance at an unchanged level. Both decisions, as well as improving relations between the USA and China, were welcomed by the market and risky assets shot up substantially during the month. The MSCI All Countries recorded a profit of 7.5%, which is slightly less than the 8.3% gain Emerging Markets investors pocketed.

Style-wise we saw risky assets that were most affected by 2018’s panic selling rebound and safe havens lose some of their magic. While “Small Caps” shot up with +9.4% “Low Volatility” stocks had to make due with a 4.3% gain. And, while the year is still young, Growth (+8.1%) once more seems to be outperforming Value (+6.9%).

As teased in last month’s newsletter, our funds are back on track. Vector Navigator started off especially strong in 2019, gaining 8.77% during the month.  Vector Flexible continues to outperform its Morningstar category (Flexible Allocation EUR – Global) and its benchmark index. The fund recorded a return of 4.79% in January compared to the 3.74% earned by its peers.

Best regards,

Werner, Thierry and Nils