NHS Sicav – Global Strategy fund update – 20/10/15

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Today, our major topic is that we have some short ETF’s in our portfolios. The aim of these positions is to stabilize the portfolios. But when the momentum becomes too strong we have to be careful. In these circumstances, indices often perform better than good stock picking funds, which means that short ETFs lose more than our core funds gain. This could temporary hurt our mark to market performance.

We must absolutely avoid losing money when the momentum is up. That’s why we have sold half of the short positions (still 4 to 5% left). Today the “net” equity exposure of the Global Strategy fund is 30%, up from 27% end of September. We are following the situation and the asset allocation very closely to move forward either by adding long equity exposure amid future corporate results or by cutting risk lower.

According to our analysis it is still too early to go aggressively in the market for the following reasons:

  • Everybody speculates on more QE from the ECB, but disappointment could be worse
  • Company earnings & revenue evolution will be key for the future
  • Technically speaking, S&P is bouncing between the support line and the resistance line (2040), so no clear signal either
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Jacques Bossuyt

Jacques Bossuyt

Member of the Investment Committee
Jacques Bossuyt

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