Asset Allocation. Marketplus Monthly market outlook. July / marketplus. July 2009

Transcription

1 Asset Allocation Marketplus Monthly market outlook 1

2 Contents Contents Asset Allocation We are on the brink of a recovery 3 Funds in focus 5 Fund Selection List 6 2

3 Asset Allocation We are on the brink of a recovery Despite the unprecedented speed of the rise in equity prices since March, the upswing has not fed through to the real economy yet. This tension between hope and reality will continue to fuel strong fluctuations on the financial markets in the short term. Since we are only at the beginning of the recovery, we would use any setbacks to build up the equity allocation further. Although shares are not inexpensive, they stand to profit the most from a further decline in risk aversion. Following the rally in corporate bonds in the first half of the year, attention in the second half of the year will focus on equity investments. Review Asset allocation: Steady increase in equity weighting Rally in corporate bonds Investors were greatly relieved in Q2 when the global economy began to stabilise. Risk aversion on the financial markets has decreased significantly. Credit spreads have contracted sharply, leading to a very positive performance for corporate bonds, despite rising interest rates. Although the equity markets managed to stage a big recovery from their lows in March, they did not quite manage to fully close the gap to corporate bonds which formed in Q1. Corporate bonds fare better in H underweighted overweighted Cash Bonds Equities Alternative Source: Sarasin Bond strategy Source: Datastream, data as of Macro outlook Cyclical upswing with brakes After the global economy entered a phase of a stabilisation, in which economic data were not as bad as before but not a lot better either, the reversal of sentiment indicators should also feed through to the real economy from Q3 onward. If governments continue to compensate households higher propensity to save, the global economy will begin a cyclical upswing in the second half of the year after a huge inventory adjustment. Despite the more optimistic outlook, the inflationary threat is contained thanks to low capacity utilisation. Sluggish lending levels at commercial banks, which still have to clean up their balance sheets and reduce external funding, and bringing public debt down to a sustainable level should slow down the upswing in the medium term. Upswing weighs on bonds Global long-term interest rates shot up in Q2. First, hopes of an imminent economic upswing fuelled inflationary fears and, second, the rising supply of government bonds put pressure on prices. Both themes will determine events in H2 as well, although it no longer looks as if interest rates will climb particularly steeply. Set against a backdrop of the zero-interest rate policy of most central banks, the prospect of a period of low inflation in 2010 should limit the increase in interest rates. Following the spectacular rally in corporate bonds in H1, this segment has exhausted almost all of the potential it had at the outset of the year. We therefore favour convertible bonds that can profit from the projected stock market rally. Inflation-protected bonds should perform marginally worse than ordinary bonds, yet offer the investor an opportune hedge against a potential surge in inflation. Currencies Winners of the crisis lose value The decline in risk aversion has also left deep scars in currencies. Many exaggerated currency movements that were triggered by collapsing risk appetite have subsided in recent months. This adjustment process will likely continue, and the yen and Swiss franc as safe-haven currencies should depreciate accordingly. In the short term, the real core interest rate spread is indicative of a strong US dollar, although real economic conditions indicate a stronger US dollar from Q onwards. 3

4 Asset Allocation Equity strategy: Earnings expectations may lift stocks Alternative investments Little potential Investment products designed to generate a small excess return against the 3-month LIBOR are not attractive at the moment. We therefore remain underweight in the total return product category. The time has not yet come for real estate investments, given that the ongoing involuntary debt reduction at real estate companies could have a negative impact on prices. In the short term commodity prices appear to have run ahead of real demand. Since warehousing many commodities is not possible or too expensive, prices could relapse in the short term. Source: Datastream Equity strategy Cyclical positioning Negative Q results could drag on the markets in the short term; however, we do not anticipate a major correction and would use any setbacks as buying opportunities. In anticipation of higher future earnings, the current valuation which is already regarded as demanding will no longer attract attention in H2. Global earnings momentum should soon enter positive territory and lift the equity markets. Regional focus remains on the emerging market countries. After increasing our exposure between March and May particularly in Asia, we will now widen our focus to include other countries. Thanks to the rise in commodity prices, markets in particular with a high weighting in raw/base materials or energy producers have moved to the fore. The rotation out of defensive sectors and into cyclical sectors should continue in Q3. We expect to see shares of solidly financed, cyclical companies, which generate a high sales share in growth markets, outperform until the end of the year. Asset allocation Timely use of investment opportunities We expect the cyclical upswing to bring a further decline in risk aversion in the coming months. We therefore overweight equities, despite the threat of short-term setbacks. We have already significantly reduced the bond allocation in our portfolios, causing a temporary increase in liquidity. We will use this liquidity in Q3 to build up the equity and commodities weighting further, depending on market conditions. 4

5 Funds in focus J.P. Morgan JP India Equity Fund Investment Strategy The J.P. Morgan Funds JP India Fund invests in Indian equities exclusively. It is actively managed. The Management focuses on identifying growth opportunities, aims to benefit from themes and acts opportunistically whenever company-specific situations arise. It is a dynamic fund, not only trying to outperform its benchmark. Performance (See notes on page 14) LODH Obliflex Convertible (CHF) P Investment Strategy The LODH Obliflex Convertible (CHF) P invests in convertible bonds, equity warrants and convertible preferred shares denominated in various currencies. The fund is actively managed based on the primary analysis of economies and markets carried out by Lombard Odier Darier Hentsch. They manage the exchange-rate risks also actively. Performance (See notes on page 14) Source: Datastream Portfolio Split The portfolio contains roughly 50 stocks only. The weighting in each holding is limited to 10 % maximum. However, it shows the degree of conviction. The fund is traded in US Dollars. Current Fund Data and Information Share price Fund size in millions 756 Domicile Company & Portfolio Management ISIN Lux J.P. Morgan LU Swiss Sec.No Currency Status USD In Scope No Tax Launch date Management Fee,p.a. ( %) 1.50 TER, p.a. ( %) 2.10 Dividend payment date Payment 2008 Reference Index Source: Datastream None MSCI India Legal Representatives in Switzerland J.P. Morgan (Suisse) SA, 8, rue de la Confédération, PO Box 5507, CH-1211 Geneva 11 Paying Agent J.P. Morgan (Suisse) SA, 8, rue de la Confédération, PO Box 5507, CH-1211 Geneva 11 The prospectus and simplified prospectus are available free of charge from J.P. Morgan (Suisse) SA, 8, rue de la Confédération, PO Box 5507, CH-1211 Geneva 11 Source: Datastream Portfolio Split The portfolio contains between issues. The fund is typically invested around the globe, with a focus on Europe and Asia, but also USA and Japan. Not more than 10 % of the Fund may be invested in securities of any one issuer. 90 % of the fund s volume is always hedged back to CHF. Current Fund Data and Information Share price Fund size in millions 458 Domicile Company & Portfolio Management ISIN Jersey LODH GB Swiss Sec.No Currency Status CHF In Scope Tax Launch date Management Fee,p.a. ( %) 1.00 TER, p.a. ( %) 1.13 Dividend payment date Payment 2008 Reference Index Source: Datastream None UBS CB Gl Foc CHF Legal Representatives in Switzerland Lombard Odier Darier Hentsch & Cie, Rue de la Corraterie 11, CH-1204 Geneva Paying Agent Lombard Odier Darier Hentsch & Cie, Rue de la Corraterie 11, CH-1204 Geneva The prospectus and simplified prospectus are available free of charge from Lombard Odier Darier Hentsch & Cie, Rue de la Corraterie 11, CH-1204 Geneva 5

6 Fund Selection List Equity Funds Switzerland Large Caps DWS Aktien Schweiz CHF % n.a. DE000DWS0D27 Annual DE n.a. SMI CHF 2.59 % 8.08 % Switzerland Small and Mid Caps Pictet (CH) Swiss Mid Small Cap P CHF % 0.00 % CH Annual CH Out SPI S&M Caps CHF % 3.97 % Germany Large Caps DWS Zürich Invest Aktien Deutschland EUR % 2.91 % DE Annual DE Out MSCI Germany EUR 5.30 % 5.98 % Germany Small & Mid Caps CS EF (Lux) Small & Mid Cap Germany EUR % % LU None LU Out MSCI Germany Small Cap EUR 8.63 % % Europe All Caps Fund/Index Currency Price YTD Perf. 3Y Perf. ann.. ISIN Distribution Domicile Oyster European Opportunities EUR % % LU None LU Out Carmignac Grande Europe EUR % 6.69 % LU None LU n.a. MSCI Europe EUR 2.67 % % Europe Large Caps Henderson Pan European EF EUR % 5.62 % LU None LU Out DJ Euro Stoxx 50 EUR 2.05 % 8.59 % Europe Small Caps JPMF Europe Small Cap A EUR % % LU Annual LU Out MSCI Europe Small Companies EUR % % France All Caps Fidelity Funds France A Euro EUR % 8.72 % LU Annual LU Out MSCI France EUR 1.94 % % See notes on page 14 6

7 Fund Selection List Italy Fidelity Funds Italy A Euro EUR % % LU Annual LU Out MSCI Italy EUR 2.12 % % United Kingdom Threadneedle UK Select Fund GBP % 4.05 % GB Semi ann. GB Out FTSE 100 GBP 4.31 % 5.26 % USA All Caps DWS (CH) US Equities USD % 9.44 % CH Irreg. CH Out MSCI USA USD 2.33 % 7.58 % USA Large Caps Investec American Equity Fund USD % 6.00 % LU Semi-ann. LU Out S&P 500 Composite Index USD 1.73 % 7.75 % USA Small & Mid Caps Schroder ISF US S&M Caps USD % 2.47 % LU None LU Out MSCI USA S&M Cap USD 7.25 % % Japan All Caps Oyster Japan Opportunities Fund JPY % % LU None LU Out Topix Index JPY 6.53 % % China All Caps Fidelity Fund China Focus A USD % % LU Annual LU Out MSCI Emerging Markets China USD % % India All Caps JPMF India Fund A USD % 8.61 % LU Annual LU Out MSCI Emerging Markets India USD % % Latin America All Caps Blackrock Latin American Fund USD % 9.63 % LU None LU Out MSCI EM Latin America USD % % See notes on page 14 7

8 Fund Selection List Global Equities Emerging Markets JPMF Emerging Markets Equity Fund USD % 4.48 % LU Annual LU Out MSCI Emerging Markets USD % 5.13 % Global Equities GAM Star Worldwide Equity 1 USD % n.a. IE00B0HF3974 None IE n.a. MSCI World USD 4.73 % 9.05 % 1 Minimum Investment USD Bond Funds CHF Mid / Long Term Credit Suisse Bond Fund Dynamic CHF % 0.24 % CH Annual CH In Citigroup Swiss GBI 3 7 years CHF 1.65 % 4.28 % CHF Inflation Linked Credit Suisse Bond Fd Inflation Linked CHF % 0.40 % LU None LU In Citigroup Swiss GBI All Maturities CHF 0.59 % 3.97 % EUR Mid / Long Term Pictet Funds Lux EUR Bonds EUR % 1.14 % LU None LU In Citigroup WGBI Europe 3 5 years EUR 3.87 % 4.97 % EUR Inflation Linked Credit Suisse Bond Fd Inflation Linked EUR % 2.79 % LU None LU In Citigroup WGBI Europe 3 5 years EUR 3.00 % 5.82 % USD Mid / Long Term Schroder USD Bond Fund USD % 6.26 % LU None LU In Citigroup WGBI 3 5 years USD 0.05 % 8.87 % Global Bonds Templeton Global Total Return USD % % LU None LU In Citigroup WGBI 3 5 years USD 0.05 % 8.87 % See notes on page 14 8

9 Fund Selection List Global Bond Funds Emerging Markets Threadneedle EM Bond Fund USD % 8.96 % GB Semi-ann. GB n.a. JPM EMBI GLB USD % 6.55 % Money Market Funds CHF Clariden Leu (Lie) MM Fund CHF CHF % n.a. LI None LI n.a. Citigroup 3 Months CHF CHF 0.34 % 2.09 % EUR Clariden Leu (Lie) MM Fund EUR EUR % n.a. LI None LI n.a. Citigroup 3 Months EUR EUR 1.04 % 3.92 % GBP JPML Sterling Liquidity Fund GBP % n.a. LU None LU Out Citigroup 3 Months GBP GBP 0.96 % 5.04 % USD Clariden Leu MM Fund USD USD % n.a. LI None LI n.a. Citigroup 3 Months USD USD 0.72 % 4.14 % Insurance Linked Investments CHF CAT Bond Clariden Leu (CH) Cat Bond Fund CHF CHF % 3.57 % CH Annual CH In Citigroup 3 Months CHF CHF 0.34 % 2.09 % EUR CAT Bond Clariden Leu (CH) Cat Bond Fund EUR EUR % 5.27 % CH Annual CH In Citigroup 3 Months EUR EUR 1.04 % 3.92 % Asset Allocation Funds CHF Strategy Conservative Swisscanto (LU) Portfolio Fund Yield B CHF % 0.77 % LU None LU Out See notes on page 14 9

10 Fund Selection List CHF Strategy Balanced Swisscanto PF Balanced B CHF % 3.06 % LU None LU Out CHF Strategy Growth Swisscanto PF Growth B CHF % 5.20 % LU None LU Out EUR Strategy Conservative UBS (Lux) SF Yield B EUR % 0.27 % LU None LU In EUR Strategy Balanced Swisscanto PF Balanced B EUR % n.a. LU None LU n.a. EUR Strategy Growth Swisscanto PF Growth B EUR % 4.94 % LU None LU Out USD Strategy Conservative JB Strategy Conservative B USD % 0.25 % LU None LU In USD Strategy Balanced UBS (Lux) SF Balanced USD B USD % 1.50 % LU None LU Out USD Strategy Growth CS Portfolio Fund Growth B USD % 4.58 % LU None LU Out Sector Funds Energy Investec GSF Global Energy Fund USD % 0.92 % LU Semi-ann. LU Out MSCI Energy USD 4.33 % 1.51 % New Energy Pictet Fund Lux Clean Energy USD % n.a. LU None LU n.a. MSCI Energy USD 4.33 % 1.51 % See notes on page 14 10

11 Fund Selection List Utilities ING Utilites Fund USD % 1.99 % LU None LU Out MSCI Utilities USD 8.98 % 1.01 % Family Business Kapitalfonds LK Family Business EUR % 2.43 % LU Annual LU n.a. MSCI Europe EUR 2.67 % % Financials CAAM Global Finance USD % % LU None LU n.a. MSCI World Financials USD 2.52 % % Food LODH Nutrition Fund CHF % 7.50 % CH None CH In MSCI World Food Products CHF 1.65 % 4.54 % Water Pictet Funds Water P Cap EUR % 5.82 % LU None LU Out MSCI World Water Utilities EUR 3.82 % 6.71 % Health Care Global BGF World Health Science USD % 0.61 % LU None LU Out MSCI World Health Care USD 1.33 % 3.72 % Health Care Europe Fortis Equity Health Care Europe EUR % 8.14 % LU None LU Out MSCI Europe Health Care EUR 1.87 % 7.73 % Biotech Pictet Funds Biotech P Cap USD % 5.09 % LU None LU Out MSCI World Biotechnology USD 2.05 % 4.37 % Technology Europe JPMF Europe Technology Fund EUR % 8.77 % LU Annual LU n.a. MSCI Technology Europe EUR 6.52 % % See notes on page 14 11

12 Fund Selection List Technology Global Henderson Global Technology Fund USD % 0.10 % LU None LU n.a. MSCI World Information Technology USD % 4.20 % Telecom Global Fidelity Funds Global Telecom Fund EUR % 2.36 % LU Annual LU Out FTSE Global Telecom Index EUR 6.57 % 9.46 % Telecom Europe Fortis Equity Telecom Europe EUR % 3.10 % LU None LU Out DJ EuroStoxx Telecom Europe EUR 8.78 % 2.62 % Mining BGF World Mining Fund USD % 0.64 % LU None LU Out MSCI World Metals & Mining USD % 1.66 % Gold Mines BGF World Gold Fund USD % 7.21 % LU None LU Out FTSE Gold Mines USD % 5.40 % Source: bank zweiplus ltd, Bloomberg See notes on page 14 Contact Patrik Kauffmann, Productmanagement, T +41 (0) , patrik.kauffmann@bankzweiplus.ch 12

13 Abbreviations A abs.ch ASW avg. bn bp corp. Div. yield or DY E EBIT EPS EV/EBITDA excl. FY GAAP GDP GNP gov. m M&A mavg MV/revenues n.a. p.a. P/B P/E R&D ROE SAA TAA vs. yoy actual value absolute change asset swap spread average billion basis points corporate dividend yield estimate earnings before interest and taxes earnings per share enterprise value to earnings before interest, taxes, depreciation and amortisation excluding financial year Generally Accepted Accounting Principles gross domestic product gross national product government million Mergers & Acquisitions moving average market value to revenues not available per annum price-to-book ratio price-to-earnings ratio Research & Development return on equity Strategic Asset Allocation, long term strategy based on investment profiles Tactical Asset Allocation; short term strategy based on return/risk expectations versus year over year 13

14 Imprint Marketplus Monthly market outlook, Publisher bank zweiplus ltd, Bändliweg 20, CH-8048 Zurich, Source Bank Sarasin & Cie Ltd., Elisabethenstrasse 62, CH-4002 Basel Concept and Design Haus der Kommunikation AG, Identity & Design Subscription New subscriptions via to: Publication dates 12 online-issues a year in German and English under Note regarding performances Past performance does not guarantee future returns. The performance shown does not take account of any commissions and costs charged when subscribing and redeeming units. Important information This publication was compiled by bank zweiplus ltd (hereinafter referred to as bzp ) solely for information purposes. It is not the result of financial analyses, and the s on the Independence of Financial Research of the Swiss Bankers Association therefore, do not apply to this document. This publication was prepared with publicly assessable information and data ( the information ) that are deemed to be reliable and based on the respective designated source. Nevertheless, bzp assumes no representation or warranty, express or implied, as to the accuracy or completeness of this information. Any errors in this information constitute no basis for direct or indirect liability on the part of bzp. In particular, bzp assumes no responsibility for any changes in the opinions expressed herein, plans or details about products, the relevant strategies and the economic environment, as well as market, competitive or regulatory conditions, etc. Although bzp has done everything within its power to create a reliable publication, we cannot rule out that it may contain errors or is incomplete. Neither the Bank, nor its shareholders or employees, assumes any responsibility regarding the relevance of the opinions, assessments and conclusions conveyed herein. Despite the release of this publication in connection with an existing contractual relationship, any liability on the part of bzp is limited to gross negligence or willful intent only. Furthermore, bzp accepts no liability for any immaterial inaccuracies. In such case, any liability on the part of bzp is limited to an amount that would normally be expected. bzp explicitly accepts no liability for indirect damages. This publication does not constitute an offer, or solicitation of an offer, to buy or sell securities or other specific financial products. Past performance of an investment is not indicative of its future trend. The value of investments and resulting realized returns are subject to increases as well as decreases. Furthermore, there is no guarantee that investors will, in every case, recoup all the amounts invested. International investments harbor currency risks in addition to risks relating to the political and economic uncertainties of other countries. The products mentioned in this publication are not suitable for all recipients. We recommend obtaining detailed information regarding the respective product, as well as consulting a professional advisor, prior to making an investment. Any investment decision necessitates thorough and diligent clarification and should not be carried out solely on the basis of this document. This publication is for personal use only and may not be redistributed. Fund Selection List: Investment/Performance We recommend that you obtain detailed information before taking any investment decision. Investments should be made on the basis of the current prospectus. Past performance is no guarantee of future trends. The performance shown does not take in account of any commissions and costs charged when subscribing and redeeming units. This document may not be distributed to any person outside the country, where you have received it. Should a person domiciled in another jurisdiction receive this report he/she must observe any applicable sales restrictions for the herein mentioned products. Copyright bank zweiplus ltd. All rights reserved. 0907_p_dk_10010_en 14