Global Allocation / Total Return

7% p.a., net of fees

Daily

Luxembourg-regulated AIF

Beauclerc Limited

14 December 2011

27 May 2014

MS Management Services SA

Manager comment

In December, the fund suffered a negative performance of -1.29%, taking the total return to -1.56% for the year 2018.
Despite the technical rally in the last days of the month, December proved to be another disastrous month for risky assets globally. Selling pressures on equities surged quickly to reach their peak on Xmas day, driven by US political risks and the tightening of USD monetary conditions, with the December FOMC confirming two more rate hikes in 2019. The almost inverted US interest-rate yield curve was interpreted as a signal that a US economic recession was a rising scenario, resulting in lower US earnings forecasts and leading to another equity valuation downgrade. The valuation premium of US equities vs. EZ and EM was no longer justified, explaining why US equities experienced higher selling pressures and a wider spike in volatility. However, global macro indicators described no sharp activity deterioration in December, with most of the slowdown seen only in China. By contrast, the Fed confirmed its robust forecasts for the US domestic demand in 2019, which should provide support to earnings forecasts later on. In Europe, the concerns remain the same, with an uncertain Brexit outcome and Italy turning already into a technical recession. The major macro event remains the eventual end of the trade tensions between the US and China in Q1 2019. Encouraging signs were given by the White House late December, which should help gradually building up investor confidence in January.
The fund’s asset allocation was kept defensive along Q4 2018, with a direct equity exposure below 20% of the fund’s allocation and a high-yield bonds selection focused on short-term maturities only. The risk exposure was concentrated mostly on the book of short-volatility notes, which managed to offset part of the losses recorded on direct equities.

YTD

  • Cumulated Performance
  • Share class A

As of 31/12/2018

3 months

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As of 31/12/2018

1 year

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  • Share class A

As of 31/12/2018

3 years

  • Cumulated Performance
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As of 31/12/2018

All

  • Cumulated Performance
  • Share class A

As of 31/12/2018

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