VAM Managed Funds (Lux) Commentaries

September 2020 (click here to download)

VAM DRIEHAUS FUND

As proxies for larger, broad equity exposures, note that the MSCI All Country World Index was down -3.22% and the S&P 500 was down -3.80% for the month. On a relative basis, the VAM Driehaus Fund’s return was aided by its exposures to small/mid capitalisation growth-oriented US equities.

The Coronavirus pandemic, again, played a central role in setting the market tone. The month was marked by a resurgence in new case counts, particularly throughout Europe, which led to heightened mobility restrictions and, in some cases, renewed lockdowns. On the more positive side, hopes for a vaccine continued to increase. While the import of the virus in determining economic trajectory is self-evident, Central Banks universally reiterate the point by including a statement like the following from the FOMC: “The path of the economy will depend significantly on the course of the virus.” The improving breadth of the market has been a positive sign as the economic activity continues to recovery. Of course, however, there may be set-backs due to the virus, government policy and the US election which may cause some hurdles for economic progress.

VAM DISCRETIONARY FUNDS

VAM Cautious Fund

Equity indices were flat in GBP terms throughout September as much of the stimulus-propelled support has faded due to political tensions causing logjams. Equities traded in a confined range, having raced back up towards pre-crisis levels since the market lows of March, indicative of the fact that the relentless upwards momentum may well have slowed down for now. The upside to market capitalisation weighted equity indices is slim as valuations remain stretched and the economic outlook uncertain, however, there is adequate opportunities to find value in select companies and the Manager’s holdings have solid return prospects.

In fixed income, the story has been much the same. As fiscal support has eased and Central Bank purchases moderated, bonds across the credit spectrum have seen yields stabilise with some mild retracement. Government bond yields continue to hover marginally above zero, offering little potential for returns in the medium term. Yields on sub-investment grade credit have risen to just below 6% yield to maturity, making them an attractive asset class for those willing to do their homework and selectively take risk.

VAM Balanced Fund

Equity indices were flat in GBP terms throughout September as much of the stimulus-propelled support has faded due to political tensions causing logjams. Equities traded in a confined range, having raced back up towards pre-crisis levels since the market lows of March, indicative of the fact that the relentless upwards momentum may well have slowed down for now. The upside to market capitalisation weighted equity indices is slim as valuations remain stretched and the economic outlook uncertain, however, there is adequate opportunities to find value in select companies and the Manager’s holdings have solid return prospects.

In fixed income, the story has been much the same. As fiscal support has eased and Central Bank purchases moderated, bonds across the credit spectrum have seen yields stabilise with some mild retracement. Government bond yields continue to hover marginally above zero, offering little potential for returns in the medium term. Yields on sub-investment grade credit have risen to just below 6% yield to maturity, making them an attractive asset class for those willing to do their homework and selectively take risk.

VAM Growth Fund

Equity indices were flat in GBP terms throughout September as much of the stimulus-propelled support has faded due to political tensions causing logjams. Equities traded in a confined range, having raced back up towards pre-crisis levels since the market lows of March, indicative of the fact that the relentless upwards momentum may well have slowed down for now. The upside to market capitalisation weighted equity indices is slim as valuations remain stretched and the economic outlook uncertain, however, there is adequate opportunities to find value in select companies and the Manager’s holdings have solid return prospects.

In fixed income, the story has been much the same. As fiscal support has eased and Central Bank purchases moderated, bonds across the credit spectrum have seen yields stabilise with some mild retracement. Government bond yields continue to hover marginally above zero, offering little potential for returns in the medium term. Yields on sub-investment grade credit have risen to just below 6% yield to maturity, making them an attractive asset class for those willing to do their homework and selectively take risk.

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