Upside Down

by Gary Moglione

In our industry there is often a level of expectation placed upon fund managers to fully understand everything that is going on and, worse still, to have Sage like skills in predicting the future. This pressure is heightened should the unfortunate individual concerned be in the public eye or rolled out in front of the media to give comment on events. Of course, the investment industry is not alone in this.

Market Snapshot

• Global equities gained 5.6% last week
• Most global markets saw positive gains following declines in recent weeks
• Brent crude rose 0.1% last week to $119.4 a barrel
• Gold rose by 0.4% to $1853.7 per ounce.

Definitely Maybe

by Richard Parfect, CFA

In our industry there is often a level of expectation placed upon fund managers to fully understand everything that is going on and, worse still, to have Sage like skills in predicting the future. This pressure is heightened should the unfortunate individual concerned be in the public eye or rolled out in front of the media to give comment on events. Of course, the investment industry is not alone in this.

Market Snapshot

• Global equities fell 1.6% last week
• The S&P has seen seven consecutive weekly declines for the first time since the dotcom bubble burst in 2001
• Brent crude rose 0.9% over the week to $112.6 a barrel
• Gold returned 1.9% to $1846.5 per ounce.

Venturing overseas

by Andrew Hardy, CFA

With the skies and borders mostly open for international travel again, I’ve been visiting our parent company’s home market of South Africa this past week, a welcome opportunity to catch up with colleagues and clients in person. The hot topic has been investing overseas, following the local central bank’s recent relaxation of offshore investment limits; now investors can take up to 45% overseas. One of the many questions this brings into focus – for investors there but also around the world – is the risks that come with having so much of a portfolio invested overseas, and how best to manage them

Market Snapshot

• Global equities declined 2.1% last week
• Goldman Sachs have cut US growth forecasts.
• Brent crude fell 0.7% to $111.5 a barrel
• Gold fell by 3.8% to $1811.8 per ounce.

Central banks get serious

by Robert White, CFA

After the first 50bps interest rate rise by the Fed in over 20 years (with more to come) and the announcement of quantitative tightening starting in June, there is no doubt that the Fed is getting serious about containing inflation. Inflation data in April continued the pattern of the past year, generally exceeding expectations, with price rises becoming more broadly based and accelerating to multi-decade highs in the US and Europe.

Strong demand, supply chain shortages, and war in Ukraine have combined to push producer price inflation (PPI) in the US up by 11.2% in the year to March

Market Snapshot

• Global equities fell 1.1% last week.
• Most indices saw declines after a volatile week with interest rates and inflation fears weighing on sentiment.
• Brent crude rose 2.8% to $112.4 a barrel following an EU proposal to ban Russian imports.
• Gold fell 0.7% to $1883.8 per ounce

Investing goals

by Stephen Nguyen, CFA

As an avid sports fan, I have always enjoyed being involved in all things sports related. Having participated in various team-based and individual sports throughout my life, I of course enjoy watching a variety of different sports, be it golf, tennis, or football. Sporting events often bring people together and teach us the importance of values and hard work. If we look at successful sports teams or individuals, there are lots of similarities that can be drawn between them and professional investors

Market Snapshot

• Global equities declined 2.6% last week
• Lockdown restrictions widen in China as concerns escalate in the capital Beijing
• Brent crude fell 4.5% to 1067 a barrel amid concerns about China’s demand and after Libya said it would resume output at its closed fields in the coming days
• Gold fell by 0.2% to $1,931.6 per ounce

Whatever it takes, China

by Lorenzo La Posta, CFA

This is not the first time I have written about Chinese equities and loyal readers will remember last August, when the media were calling it an “uninvestable” market, we were finding pockets of value and interesting opportunities. This year, a new wind is blowing under the Red Dragon’s wings.

But let’s rewind the tape and press play on February 2021. Valentine’s Day had just gone, the stock market was at a peak, but no one knew what was coming

Market Snapshot

• Global equities fell -1.4% last week
• President Macron is set to face far-right rival Marine Le Pen in the second and final stage of the French presidential election in two weeks’ time
• Brent crude fell -1.5% over the week to $102.8 a barrel
• Gold returned +1.1% to $1947.5 per ounce

Jordy Shore

by Alex Harvey, CFA

Covid travel restrictions have now finally been lifted for passengers arriving in the UK. I’ve been fortunate to travel abroad in recent months including a trip to Jordan, with its rich cultural heritage spanning ancient civilisations and sites sacred to Christianity, Judaism and Islam. One regional constant over the millennia has been the Dead Sea; the world’s deepest hypersaline lake. Its shores emerge from a depth of over 300m to mark the lowest land elevation on our planet at 430 metres below sea level

Market Snapshot

• Global equities increased by +0.3% last week.
• Russian and Ukrainian negotiators will resume remote talks today.
• Brent crude decreased by -13.5% to $104.39 a barrel on plans for a release of US reserves.
• Gold decreased by -1.7% to $1925.68 per ounce

It’s lights out and away we go

by Matt Connor

The first race of the 2022 Formula One season didn’t disappoint, as Sir Lewis Hamilton sought a strong start to his record-breaking 8th World Championship in Bahrain. Many were quick to write off the Mercedes man, due to a lack of pace in free practice and qualifying compared to rivals Ferrari and Red Bull. Despite the negative outlook, Hamilton still managed to achieve a podium. As value investors we often view negative sentiment around a company as a potential opportunity to capitalise on irrational valuations

Market Snapshot

• Global equities increased by +1.3% last week
• At the NATO summit, leaders said in their statement that the Russian use of chemical or biological weapons would result in severe consequences
• Brent crude increased by +11.8% to $97.9 a barrel
• Gold increased by +1.9% to $1889.3 per ounce

Metaverse: real estate

by Jackson Franks

The largest ever land acquisition took place towards the end of last year; it’s value:US$2,400,000. You may be thinking I’m missing a few zeros here, but what I haven’t yet mentioned is that this transaction does not relate to the real world but instead refers to Tokens.com’s purchase within the metaverse.

In November last year, Tokens.com’s subsidiary, Metaverse Group, paid more than US$2.4m for a plot of virtual land in the fashion district of Decentraland, one of several growing platforms within the metaverse. Although this amount may seem obscene to many readers (including myself), the more eye-catching fact here is that it accounted for less than 50bps of real estate sales within the metaverse for 2021

Market Snapshot

• Global equities rose +6.0% last week
• The Fed raised interest rates by 25 basis points ending the near-zero rates of the pandemic era
• Brent crude fell -4.2% over the week to $107.9 a barrel
• Gold returned -3.4% to $1921.6 per ounce

Mind the Gap

by Mark Wright, CFA

The latest elevated CPI print of 7.5% has spooked investors this year, triggering volatility in both bond and equity markets. In trying times, it sometimes helps to take the long view. In a recent paper the Bank of England has taken this advice to the extreme, looking back 800 years to the 14th century to calculate the average global GDP-weighted inflation rate of just 1.51%1. Unfortunately, 800 years is not a particularly sensible investment horizon for most people, but there are plenty of other more relevant periods for us to examine when considering the importance of current economic events

Market Snapshot

• Global equities declined -1.9% last week
• The Russian invasion continues with 2.5M Ukrainians having fled the country
• Brent crude fell -4.6% to 118.11 a barrel, and the USA banned oil imports from Russia
• Gold gained +0.9% to $1970.7 per ounce