Absolute positive performance recorded in the first year of operations despite turbulent market conditions.


Fund Commentary
21 Jun 2016


After a dreadful first week of May, European financial markets rebounded in the latter part of the month on the back of a sustained recovery of commodities prices, agreement reached between Greece and its creditors and decent economic indicators in the US.

The Fund’s benchmark was up +2.50% in May but failed to recoup its yearly losses and was still down 4.18% for the year to 31st May. In that context, the Fund managed to post a positive performance as well with a +3.97% return in May, outperforming its benchmark by 1.47% for the month. Year to date, the Fund’s performance stands at +1.20%, translating into a 5.38% outperformance versus its index.

This month also marks the end of the Fund’s first year of operations (launch date was May 5th, 2015). Since inception, the performance stands at +0.49% compared with -8.10% for the Fund’s benchmark. The Investment Adviser is very pleased to report a sizeable relative outperformance (+8.59%) coupled with capital preservation with a positive absolute performance despite turbulent market conditions since the launch.

23 investments recorded a positive performance in May and 7 were in negative territory. Kendrion was the most significant contributor, followed, this month, by Aubay and Saf- Holland. At the other end of the spectrum, Andritz, Vexim and Metsa-Board were the three main detractors. Two positions were exited during the month, Ascom and Metsa- Board.

June has so far been very volatile with fears of a Brexit scenario mounting day by day. As seen at the beginning of 2016, the Fund proves to be much more resilient than the market in general under such conditions. This aspect was proven right again this month. With capital preservation in mind, the Investment Adviser has also decided to increase the cash portion of the portfolio from 5% to a 15-20% range. Depending on the outcome of the vote on June 23rd, this cash could be redeployed rapidly or more gradually.


The views and statements contained herein are those of Pascal Investment Advisers SA in their capacity as Investment Adviser to the Fund as of 15/06/16 and are based on internal research and modelling.