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 1.32% and the S&P 500 was up 2.33% over the same period. On a relative basis, the VAM Driehaus Fund’s return was aided by its exposures to US smaller capitalisation stocks, but hurt by its exposures to ex-US smaller capitalisation equities and US large capitalisation growth- oriented equities.

Half way through 2021, it has become widely understood by market participants that economic growth and earnings will be strong as the economy reopens. Despite these positives, beneath the surface there is a lot of consolidation and churning in many parts of the market. The ongoing consolidation or rotation over the past couple months is likely the result of the market transiting through a period of uncertainty. There is uncertainty surrounding monetary policy as the US Federal Reserve begins to transition away from crisis level monetary accommodation via tapering of asset purchases. There is also uncertainty around the magnitude of deceleration in economic growth from peak growth rates to a more sustained (but still strong) level of economic growth.

VAM DISCRETIONARY FUNDS

VAM Cautious Fund

June saw the equity market continue to levitate higher despite the mid-month wobble as investors’ interpretation of the FED’s dot plots oscillated between a fear of monetary tightening and a more relaxed view of FED Chair Jerome Powell’s intentions.

Fixed income assets ground out some modest gains with government bond yields falling as investors decided to trust that Central Banks were right to judge inflationary pressures as transitory. Global equities were up around 4% in GBP with growth stocks once more driving the indices higher with expectations of low bond yields and declining inflation into the future supportive of valuations, while more cyclical stocks struggled.

VAM Balanced Fund

June saw the equity market continue to levitate higher despite the mid-month wobble as investors’ interpretation of the FED’s dot plots oscillated between a fear of monetary tightening and a more relaxed view of FED Chair Jerome Powell’s intentions.

Fixed income assets ground out some modest gains with government bond yields falling as investors decided to trust that Central Banks were right to judge inflationary pressures as transitory. Global equities were up around 4% in GBP with growth stocks once more driving the indices higher with expectations of low bond yields and declining inflation into the future supportive of valuations, while more cyclical stocks struggled.

VAM Growth Fund

June saw the equity market continue to levitate higher despite the mid-month wobble as investors’ interpretation of the FED’s dot plots oscillated between a fear of monetary tightening and a more relaxed view of FED Chair Jerome Powell’s intentions.

Fixed income assets ground out some modest gains with government bond yields falling as investors decided to trust that Central Banks were right to judge inflationary pressures as transitory. Global equities were up around 4% in GBP with growth stocks once more driving the indices higher with expectations of low bond yields and declining inflation into the future supportive of valuations, while more cyclical stocks struggled.

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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