Europe in September


Fund Commentary
19 Oct 2016


The Fund’s benchmark was flat in September returning just -0.03%. NYMEX WTI CRUDE was up 7.92% on the month after OPEC agreed a preliminary accord to cut production.

The US 10year treasury yield increased 1bp to finish the month at 1.59%. The German 10year treasury yield decreased 5bps to finish the month at -0.12% and the Swiss 10year treasury yield fell 7bps to finish the month at -0.55%. The UK 10year gilt yield increased by 10bps to finish the month at 0.75% as investors began worrying about how the UK would leave Europe. Gold traded up 0.53% on the month to finish at $1315.87 with silver trading up 2.78% to finish the month @ $19.174. The Euro strengthened over the month against the US$ from 1.116 to 1.124 and gained against sterling from 0.849 to 0.866.

The Fund outperformed its benchmark by 40bps* in September. Materials, Information Technology and Energy were the best performing sectors in the benchmark whilst the worst performing were: Real Estate, Telecommunication Services and Healthcare. The Fund’s top performing stocks were: Amadeus, AutoTrader and SES and the worst were: Galenica, Reynolds American and Svenska Cellulosa. During the month the Fund exited positions in Novartis and Cerved Information Solutions.

Novartis had performed well and the shares were sold in part because of the current valuation but also because changes in the sector mean that the risk-reward trade-off is deteriorating in the Investment Adviser’s view. Cerved was sold due to increasing political uncertainty in Italy and worsening macro data.


Semi Annual Dividend Payment

On 30th September 2016, the Fund paid a dividend distribution of Euro 0.50 per share to holders of the Euro Institutional Distributing Class.


*EUR I Class


The views and statements contained herein are those of Lofoten Asset Management in their capacity as Investment Adviser to the Fund as of 17/10/16 and are based on internal research and modelling.