NOVACAP Global Strategy fund – August 2015

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August has proved being in line with previous months, especially starting from Q2, and was highly volatile on all financial markets, any region and any asset class. The beginning of the month started quite, in fact like a usual summer month, with low volumes and very little activity. Then, China dominated suddenly the news and was the cause of the “Black Monday” that markets experienced in August. Indeed, three events in a row happened and broke the summer tranquility; the devaluation of the Yuan, the uninterrupted fall of the Chinese market since June and multiple macroeconomic indicators showing the weaknesses of the Chinese economy (PMI, industrial production, retail sales…). All this generated an impressive downward spiral for the Chinese market, which was spread to all financial markets worldwide. Despite the intervention of the PBoC and the underlying rate cut, the situation has not changed really and the panic feelings flee on every market. This was surprising whether during the month  of August, European and American macroeconomic data were rather favorable. This demonstrated that markets over-reacted in front of the Chinese fears and that there was very low liquidity. The S&P 500 ended the month with a negative performance of -6%, while Eurostoxx 50 and Nikkei 225 finished respectively at -9.2% and -8.2%. All majors indexes were negative year-to-date. The allocation of the GSF suffered in the last quarter on its only long only side. Flexibility has not actually paid because on one hand, flexible funds have suffered relatively strong and secondly the fixed income world was also in a downward trend. Cash remains king to start the month of September. Please find attached the Fact-sheet of NOVACAP Gobal Strategy fund :

http://www.novacap-am.com/img/pdf/NGSF_FS_ENG_SerieA-2.PDF

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Laurent Van Den Eynde

Laurent Van Den Eynde

Co-Manager of Global Strategy fund

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