The Fund’s benchmark was up 1.33% in March due to actions taken by the ECB to improve liquidity. NYMEX WTI CRUDE was up 7.11% on the month from $35.57, intra-month hitting $41.66 (up 14%) before ending at $38.34.
German bond yields rose in March with the 10year yield rising from 0.11% to close the month at 0.15%. The US 10year treasury also rose from 1.73% to 1.77%, it had been as high as 1.99% mid-month but fell back following some dovish comments from Federal Reserve board members. Gold traded with some volatility during the month but ended the month where it started at $1232. The ECB reduced rates at their March meeting, expanded their asset purchase scheme and extended the list of assets eligible for regular purchases to include investment grade Euro denominated bonds issued by non-bank corporations established in the Euro area. As a result of this the Euro strengthened against the US$ from 1.087 to 1.138 and against Sterling from 0.781 to 0.793. Also during the month, comments by US Presidential candidates negatively impacted Healthcare names.
The Fund underperformed its benchmark by 52bps in March. Materials, Industrials and Utilities were the best performing sectors in the benchmark whilst the worst performing were; Healthcare, Telecoms and Energy. The Fund’s top performing stocks were: William Demant, Bayer and SES and the worst Livanova, Dixons and Galenica. During the month the Fund exited the position in Dixons.
The views and statements contained herein are those of Lofoten Asset Management in their capacity as Investment Adviser to the Fund as of 6/04/16 and are based on internal research and modelling.