AV MANAGEMENT S.A.

Monthly management comment Macro & Politics: “ Central banks are in control ” Recent macro-figures such as market confidence, ISM manufactural, job creations are all showing a stronger and swifter than expected rebound in the US and in Europe. Latest Chinese figures are also very encouraging. In today’s world focusing only on the good news and ignoring whatever could spoil our comfortable certainties, they are contributing to the general “feel good” mood. Breaking the Hong Kong democracy is apparently irrelevant…

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Monthly management comment Macro & Politics: “deconfinement followed by political tensions and social unrest” The Covid-19 pandemic continues to disrupt many economies but seems to have peaked in most of the western economies. Europe and the US continued to progressively lift the drastic confinement measures in order to allow the economy to restart and people to go back to work. The scope of the slow-down remains dramatic and historically unseen. The Fed Put is well in place, with the likely…

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Monthly management comment Macro & Politics: the world goes schizophrenic. The peak of the Corona pandemic seems to have been reached in most parts of the world and many countries are now slowly starting to reopen their economies. The initial obvious relief has now been replaced by many uncertainties: will a second wave follow soon? how long will the security measures have to be kept? is it really safe to go back to school, work etc? … The global mood…

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Macro & Politics: Covid-19 cracks the world economy Historical standstill.The 1st quarter of 2020 will go into history books as we currently experience things that never happened before: billions of people are confined at home, not being allowed to move or gather freely. The virus as put the world economy on shock, unemployment figures are skyrocketing and many industries are in complete standstill.The scope of the consequences is difficult to grasp, as we still don’t have a clear picture, as…

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Macro & Politics: Do new times require new investment strategies? After a prolonged period of new highs and everlasting optimism the markets finally caught a sudden cold due to the Corona Virus. What people initially thought was just another seasonal virus has managed to spread globally and cancel world-known events such as the Geneva Motor show.Plenty of commercial fairs are postponed and major companies are enforcing travel bans during the course of the epidemy. The Corona outbreak comes at a…

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Monthly management comment The objective of the Company is to achieve for the Shareholders an optimum return by undertaking directly or indirectly investments while reducing investment risk through diversification.The Sub-Fund will predominantly invest in a diversified portfolio of equities, government and corporate bonds, commodities (through financial derivative instruments), currencies, structured products and alternative investment products.The sub-Fund will allocate a significant portion of its equity allocation into international stocks. Macro & Politics: liquidity is the cure The ever-cheerful mood from 2019…

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Monthly management comment Macro & Politics: Trade war reloaded President Trump managed once again to disturb a market seemingly heading towards a smooth 2019 ending. New US tariffs were announced on Latin American countries and France while China tariffs are still due on December 15th.The US president also stressed there was no deadline to the China deal. These announcements have shaken investors sentiment, a few will probably log in profits. Fundamentally, nothing much has changed but staying on the side…

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Monthly management comment Macro & Politics: Investors sentiment boosted by the Fed and corporate earnings As expected, central banks delivered the well needed monetary medicine. Despite a less dovish tone, the Fed cut rates once again and still seems to be behind the yield curve. We foresee further US cuts, perhaps even reaching 0 as now mundane in Japan and Europe. The rate differential between USD and EUR or JPY has decreased substantially, and a weakening currency is probably great…

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Monthly management comment Wobbling confidence and shaky markets. Global indicators are showing an economical slowdown but so far, no recession. If manufactural climate remains sluggish, consumption and services are still very resilient. Central banks are once again on easing path in order to maximise the current expansion and try to minimise markets corrections. The US Fed, as expected, dropped by 25 basis points the repo rate early in the month and called it a “mid cycle adjustment “, but we feel more…

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Tumbling interest rates and manufacturing recession Bond yields continued to drop into unexplored territory, many of them in negative territory (German 10-year Bund now at -0.7%). The US yield curve is also dropping fast with a risk of an inversed bias (2-year bond at 1.55 vs 1.59 for the 10 year), usually indicating a forthcom- ing recession. Bond markets are anticipating trouble and the debate continues: will central banks save investors once again and can they keep things under control?…

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