- May was the first negative month of 2019 for global equity, with all major regions shedding about 5% (in EUR).
- An escalating trade war between the US and China was mostly to blame. After remaining mostly words for more than a year, real measures and sanctions are now in place, and efforts to find a compromise have so far failed. If international trade creates a win-win, then a trade war can have only losers...
- Other economic news was not really bad, but certainly on the soft side, leaving little room for error: worsening animal spirits due to trade conflicts can easily tip the global economy into recession.
Once again a mixed month for our equity strategies, this time it's our long only fund underperforming while the market neutral SIF managed to book gains. The numbers aren't that big though: Aphilion Q² Equities underperformed by 0.8%, and Aphilion SIF was up 0.9%. Part of the explanation lies in the underperformance of European equities in general, which hurts Aphilion Q²'s relative performance because of its overweight position in Europe (37% vs 21% in the MSCI World). The SIF doesn't suffer from this, because all its long and short positions are in Europe, and these managed to deliver.
Jan Holvoet, Nico Goethals, Xavier Boussemaere