VAM Managed Funds (Lux) Commentaries

April 2020 (click here to download)

VAM DRIEHAUS FUND

As proxies for larger, broad equity exposures, note that the MSCI All Country World Index was up 10.71% and the S&P 500 was up 12.82% for the month. On a relative basis, the VAM Driehaus Fund’s return benefitted from its US smaller capitalisations exposures and was hurt by its exposures to emerging markets’ equities.

The Covid-19 pandemic and policy responses continued to dominate headlines and drive markets in April. After an initial bounce in late March, global equity markets continued to rebound sharply during the month. Equity markets were able to rebound in the face of severely negative economic conditions largely due to the forceful action of the US Federal Reserve which launched a number of policy initiatives including an unprecedented move to buy junk bonds. Many Central Banks around the world have followed the US Federal Reserve in easing policy to support their economies.

VAM DISCRETIONARY FUNDS

VAM Cautious Fund

April saw stock markets around the world bounce hard off their recent lows as corporate news, government intervention and Central Banks’ support calmed the nerves of investors. Global stock markets rose almost 10% adding to the gains at the end of March from the lows on the 23rd. High yield and investment grade credit both advanced in price as yields moderated to return over 4% in the month. Counter intuitively government bonds continued to rally as investors factored in low interest rates for as far as the eye can see and UK gilts appreciated by over 3%.

Although the extreme panic of March has moderated, volatility remains elevated as it remains impossible to determine if, when and how economies can return to normal. As the days and weeks have passed, the Manager is pleased that it is now getting a good level of corporate communications which means it can begin to understand the impact of recent events and, indeed, identify the potential winners and losers. We are by no means out of the woods yet, but, as the Manager gets more news flow, it is seeing market participants trade based on the range of probable outcomes rather than the fear of the unknown which is an important step in the right direction.

VAM Balanced Fund

April saw stock markets around the world bounce hard off their recent lows as corporate news, government intervention and Central Banks’ support calmed the nerves of investors. Global stock markets rose almost 10% adding to the gains at the end of March from the lows on the 23rd. High yield and investment grade credit both advanced in price as yields moderated to return over 4% in the month. Counter intuitively government bonds continued to rally as investors factored in low interest rates for as far as the eye can see and UK gilts appreciated by over 3%.

Although the extreme panic of March has moderated, volatility remains elevated as it remains impossible to determine if, when and how economies can return to normal. As the days and weeks have passed, the Manager is pleased that it is now getting a good level of corporate communications which means it can begin to understand the impact of recent events and, indeed, identify the potential winners and losers. We are by no means out of the woods yet, but, as the Manager gets more news flow, it is seeing market participants trade based on the range of probable outcomes rather than the fear of the unknown which is an important step in the right direction.

VAM Growth Fund

April saw stock markets around the world bounce hard off their recent lows as corporate news, government intervention and Central Banks’ support calmed the nerves of investors. Global stock markets rose almost 10% adding to the gains at the end of March from the lows on the 23rd. High yield and investment grade credit both advanced in price as yields moderated to return over 4% in the month. Counter intuitively government bonds continued to rally as investors factored in low interest rates for as far as the eye can see and UK gilts appreciated by over 3%.

Although the extreme panic of March has moderated, volatility remains elevated as it remains impossible to determine if, when and how economies can return to normal. As the days and weeks have passed, the Manager is pleased that it is now getting a good level of corporate communications which means it can begin to understand the impact of recent events and, indeed, identify the potential winners and losers. We are by no means out of the woods yet, but, as the Manager gets more news flow, it is seeing market participants trade based on the range of probable outcomes rather than the fear of the unknown which is an important step in the right direction.

Sources: Driehaus Capital Management LLC and Sanlam Private Wealth.
Sanlam Private Wealth is a trading name of Sanlam Private Investments (UK) Ltd.

Disclaimer

VAM Driehaus, VAM Cautious, Balanced and Growth Funds are compartments of VAM Managed Funds (Lux).

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