VAM Managed Funds (Lux) Commentaries

October 2019 (click to download)

VAM DRIEHAUS FUND

As proxies for larger, broad equity exposures, note that the MSCI All Country World Index was up 2.74% and the S&P 500 was up 2.17%. On a relative basis, the VAM Driehaus Fund’s return was aided by its exposures to growth-oriented stocks, most notably within the US and developed smaller capitalisation sectors, and within the emerging markets sector.

Global equities largely performed well for the month as US recession fears abated and evidence suggested that US corporate profits had not fallen as much feared. While a US recession does not appear imminent, in a world that remains extremely ripe for headline risks, especially for investors in equities, investors should be prepared for market risks associated with investing in equities, including the global, growth and momentum-oriented strategies employed by the Fund’s underlying investments.

VAM DISCRETIONARY FUNDS

VAM Cautious Fund

October saw significant strength in Sterling as the currency continued to recover from an extremely cheap valuation back to a more normal level. This 5% appreciation against the US Dollar was a headwind for equity returns which fell around 2.5% in Sterling terms. Sterling strength played into the hands of the Manager’s domestically-focused UK investments and, despite the surprisingly large and swift move, this risk was well controlled.

Central banks continued to ease monetary policy with the Federal Reserve Bank delivering their third and final insurance cut to help the global economy over this cyclically soft patch. Equity markets responded positively with the MSCI World Index hitting new highs in USD.

The Brexit deadline set by Prime Minister Johnson was not achieved, but once an extension had been agreed, a deal did finally get approval in parliament. Politicians have begrudgingly agreed to an election the 12th of December, where we will see an ugly contest dominated by mudslinging and alternative facts. Recent elections have been a source of surprise, and while the Manager’s base case expectation is for a Conservative win, followed by implementation of Boris’ deal, the Manager takes nothing for granted, and will be monitoring and mitigating any specific risks to portfolios.

VAM Balanced Fund

October saw significant strength in Sterling as the currency continued to recover from an extremely cheap valuation back to a more normal level. This 5% appreciation against the US Dollar was a headwind for equity returns which fell around 2.5% in Sterling terms. Sterling strength played into the hands of the Manager’s domestically-focused UK investments and, despite the surprisingly large and swift move, this risk was well controlled.

Central banks continued to ease monetary policy with the Federal Reserve Bank delivering their third and final insurance cut to help the global economy over this cyclically soft patch. Equity markets responded positively with the MSCI World Index hitting new highs in USD.

The Brexit deadline set by Prime Minister Johnson was not achieved, but once an extension had been agreed, a deal did finally get approval in parliament. Politicians have begrudgingly agreed to an election the 12th of December, where we will see an ugly contest dominated by mudslinging and alternative facts. Recent elections have been a source of surprise, and while the Manager’s base case expectation is for a Conservative win, followed by implementation of Boris’ deal, the Manager takes nothing for granted, and will be monitoring and mitigating any specific risks to portfolios.

VAM Growth Fund

October saw significant strength in Sterling as the currency continued to recover from an extremely cheap valuation back to a more normal level. This 5% appreciation against the US Dollar was a headwind for equity returns which fell around 2.5% in Sterling terms. Sterling strength played into the hands of the Manager’s domestically-focused UK investments and, despite the surprisingly large and swift move, this risk was well controlled.

Central banks continued to ease monetary policy with the Federal Reserve Bank delivering their third and final insurance cut to help the global economy over this cyclically soft patch. Equity markets responded positively with the MSCI World Index hitting new highs in USD.

The Brexit deadline set by Prime Minister Johnson was not achieved, but once an extension had been agreed, a deal did finally get approval in parliament. Politicians have begrudgingly agreed to an election the 12th of December, where we will see an ugly contest dominated by mudslinging and alternative facts. Recent elections have been a source of surprise, and while the Manager’s base case expectation is for a Conservative win, followed by implementation of Boris’ deal, the Manager takes nothing for granted, and will be monitoring and mitigating any specific risks to portfolios.

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).

This document is intended for use by professional financial advisers only. The distribution of VAM Funds and the offering of the shares may be restricted in certain jurisdictions. Private investors should contact their financial adviser for more details on any of the products featured. It is the responsibility of any person in possession of this document to inform themselves of, and to observe, all applicable laws and regulations of any relevant jurisdictions. Prospective applicants for shares should inform themselves as to the legal requirements and consequences of applying for, holding and disposing of shares and any applicable exchange control regulations and taxes in the countries of their respective citizenship, residence or domicile. Click for Important Information