VAM Managed Funds (Lux) Commentaries

VAM DRIEHAUS FUND

As proxies for larger, broad equity exposures, note that the MSCI All Country World Index was up 4.35% and the S&P 500 was up 4.76% for the month. On a relative basis, the VAM Driehaus Fund’s return was aided by its heavy exposures to US and developed market smaller-capitalisation growth-oriented equities.

The market’s rally and recovery continued to be strong and relentless this month. Record-setting monetary and fiscal policy measures by the US Federal Reserve and Congress provided liquidity to the financial markets, and stabilisation and relief to businesses, households and the broader economy. The ultimate path forward for equities will depend on many variables for the economy and for the virus. A second wave of the Covid-19 infections remains one significant risk to monitor.

VAM DISCRETIONARY FUNDS

VAM Cautious Fund

Stock markets continued to recover in May as the actions taken by governments and Central Banks removed the worst case tail risks relating to the economic shutdown. As companies continued to communicate their plans to cope with such a unique environment, risk appetite returned as investors look through the disruption to longer-term profitability. Global stock markets rose almost 7%. High yield and investment grade credit both advanced in price as yields fell with high yield benefitting the most from the contraction in credit spreads. Despite the risk on nature of the month government bonds still remain well bid and were flat in the month holding onto last month’s gains.

The extreme panic of March is now fading to a distant memory and volatility, although slightly elevated, can be considered more normal. Governments around the world are trying to restart economies and the more cyclically-exposed companies have now seen their share prices start to recover. We are still not out of the woods yet, but several paths are being explored as we grapple with how to live with the virus, and many companies have taken the opportunity to strengthen balance sheets through equity and debt issuance in both investment grade and high yield.

VAM Balanced Fund

Stock markets continued to recover in May as the actions taken by governments and Central Banks removed the worst case tail risks relating to the economic shutdown. As companies continued to communicate their plans to cope with such a unique environment, risk appetite returned as investors look through the disruption to longer-term profitability. Global stock markets rose almost 7%. High yield and investment grade credit both advanced in price as yields fell with high yield benefitting the most from the contraction in credit spreads. Despite the risk on nature of the month government bonds still remain well bid and were flat in the month holding onto last month’s gains.

The extreme panic of March is now fading to a distant memory and volatility, although slightly elevated, can be considered more normal. Governments around the world are trying to restart economies and the more cyclically-exposed companies have now seen their share prices start to recover. We are still not out of the woods yet, but several paths are being explored as we grapple with how to live with the virus, and many companies have taken the opportunity to strengthen balance sheets through equity and debt issuance in both investment grade and high yield.

VAM Growth Fund

Stock markets continued to recover in May as the actions taken by governments and Central Banks removed the worst case tail risks relating to the economic shutdown. As companies continued to communicate their plans to cope with such a unique environment, risk appetite returned as investors look through the disruption to longer-term profitability. Global stock markets rose almost 7%. High yield and investment grade credit both advanced in price as yields fell with high yield benefitting the most from the contraction in credit spreads. Despite the risk on nature of the month government bonds still remain well bid and were flat in the month holding onto last month’s gains.

The extreme panic of March is now fading to a distant memory and volatility, although slightly elevated, can be considered more normal. Governments around the world are trying to restart economies and the more cyclically-exposed companies have now seen their share prices start to recover. We are still not out of the woods yet, but several paths are being explored as we grapple with how to live with the virus, and many companies have taken the opportunity to strengthen balance sheets through equity and debt issuance in both investment grade and high yield.

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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