Marketplus Monthly market outlook July / August 2010

Transcription

1 Asset Allocation Marketplus Monthly market outlook 1

2 Contents Contents Asset Allocation Window of opportunity for risky assets 3 Funds in focus 5 Fund Selection List 7 2

3 Asset Allocation Window of opportunity for risky assets Following the equity market correction in Q2 2010, we see a window of opportunity for a recovery in the third quarter. First, concerns about the euro debt crisis should gradually recede and, second, corporate results should spring some very positive surprises. We expect mostly positive news to support a decline in risk aversion and a recovery in risky assets. That said, we expect to see more signs of a global slowdown in growth in autumn at the latest, and the equity markets should resume their downward trend after a temporary recovery. Review Equity correction discounts part of slowdown Euro debt crisis dampens risk appetite Investor optimism was riding high at the beginning of Q Surprisingly positive corporate results fanned hopes of a lasting upswing. Towards the end of April, however, the Euroland debt crisis came to the attention of investors. In a bid to counter the danger of the Greek crisis spreading to the other European states, the European Union (EU) put together a bailout package worth EUR 750 bn. But these measures were also only able to calm the financial markets for a brief period. Plagued by nascent growth fears, equities as well as commodities corrected sharply in Q Equities and commodities correct in Q Source: Sarasin Equity strategy Source: Datastream Macro outlook Fiscal impulses come to an end The fiscal and monetary stimuli triggered a spectacular up-swing, which has kept up since H The labour market has also started to recover since the beginning of But in the meantime, leading indicators have peaked. The discontinuance of fiscal impulses should trigger an economic slowdown in H The reduction of credit bubble excesses will continue to act as a brake until the beginning of On the other hand, emerging market countries will help to underpin global growth. Summer rally looks likely The uptrend on the equity markets in Q came to an abrupt halt due to the debt crisis in the Euroland. However, the stock market correction appears overdone in the short term and there are good reasons to expect a rebound at the beginning of Q The spectacular cyclical up-swing should engender further positive surprises in corporate results. Also, our market sentiment indicators suggest that investor sentiment is a lot less optimistic than it was at the beginning of Q We have upgraded our emerging market equity weighting to neutral after the setback in Q Emerging market equities are inexpensive and stand to profit the most from a decline in risk aversion. Furthermore, the earnings risks are lower in relation to US equities. Within Europe, we continue to focus on core countries, including Switzerland and the UK, while avoiding equities from the Euroland periphery. A rising level of risk willingness among investors in Q suggests the weighting for the cyclical sectors will be increased at the expense of the defensive sectors. 3

4 Asset Allocation Bond strategy Asset allocation for Q3 2010: Overweight alternative assets Debt crisis still a driving force Central banks are likely to stick to their zero interest rate policy in the coming 12 months, due to the debt crisis and the incipient economic upswing. Together with the dampening impact of inflation, this should keep interest rates on the long end of the yield curve low. However, we cannot rule out a setback in the short term due to the princely valuation of government bonds. Since the credit spreads on corporate bonds rose in Q while the fundamental data improved, we see greater potential once more for corporate bonds. Currencies Source: Sarasin Swiss franc remains in demand as a safe-haven currency The level of confidence shows that the euro will pass its test. However, the euro recovery is likely to be short-lived: the dramatic consolidation measures mean monetary tightening is no longer an issue for now. Relative monetary policy will support the US dollar and the Swiss franc will remain in demand as a safe-haven currency. Since the Swiss National Bank (SNB) stopped making intervention threats in June, the Swiss franc should continue to trend firmly. Alternative assets Hopes of a recovery The projected decline in risk aversion should also lead to a recovery in alternative assets. Relatively speaking, commodities are more attractive than real estate assets because they are likely to profit from the rising level of demand in the emerging markets. The hardest-hit commodities i.e. industrial metals, in particular should record the biggest gains during a recovery. Fears of a global slowdown in growth should reexert their negative influence on commodity prices and real estate assets in autumn at the latest. Asset allocation Balanced investment strategy After we reduced our equities allocation to underweight at the beginning of Q2 2010, the risk/return profile after the correction looks more attractive again. At the beginning of Q3 2010, positive news should outweigh negative news again on the back of strong corporate results. Accordingly, we have increased our equity allocation to neutral. On the other hand, bonds do not have any more potential left since interest rates are at a record low level. We have therefore discarded bonds in favour of risky asset purchases. Thanks to the high level of volatility in June, we were able to purchase alternative assets with attractive yields. We have up-graded real estate assets from underweight to neutral. We continue to overweight commodities and expect them to also recover in Q

5 Funds in focus Fidelity Funds - South East Asia A USD Investment Strategy The Fidelity Funds - South East Asia Fund invests in companies located in the South East Asia region. It is actively managed and aims to outperform the benchmark and peer group over the long term. The Manager is a growth-oriented investor and focuses on companies with above-average earnings growth relative to their sector or the market. The fund s performance may deviate substantially from the benchmark index, since the Manager is not restricted to the benchmark. GAM UK Diversified Acc Investment Strategy The investment objective of the fund is capital appreciation. The fund invests primarily in quoted securities in the UK, seeking to exploit areas with excessively negative sentiment and a catalyst for change. Stocks are selected on basis of fundamental and technical analysis. Currency hedging may be employed to protect against exchange rate risk. Performance (See notes on page 15) Performance (See notes on page 15) Source: Datastream Source: Datastream Portfolio Split The fund manager does not aim to hold a specific number of stocks in the portfolio. He may invest in large, mid and small cap stocks. China, South Korea, Taiwan, Singapore and Hong Kong are the highest weighted countries in the fund. Current Fund Data and Information Share price Fund size in millions (share class) Domicile Luxembourg Mgmt. Company / Portfolio Mgmt. FIL ISIN LU Swiss Sec. No Currency USD Status in scope no tax Launch date Management Fee, p.a. (%) n.a. TER, p.a. (%) 1.96 Dividend payment date Portfolio Split There is no information available about the Portfolio Split of the Fund.t Current Fund Data and Information Share price Fund size in millions (share class) 277 Domicile UK Mgmt. Company / Portfolio Mgmt. GAM ISIN GB Swiss Sec. No Currency GBP Status in scope no tax Launch date Management Fee, p.a. (%) 1.50 TER, p.a. (%) 1.63 Dividend payment date Payment 2009 none Reference index FTSE all Share Source: Datastream, Lipper Payment 2009 Reference index Source: Datastream, Lipper none MSCI AC Far East ex Japan Legal Representatives in Switzerland GAM Anlagefonds AG, Klausstrasse 10, CH-8008 Zurich Paying Agent Rothschild Bank AG, Zollikerstrasse 181, 8034 Zurich The prospectus and simplified prospectus are available free of charge from GAM Anlagefonds AG, Klausstrasse 10, CH-8008 Zurich Legal Representatives in Switzerland Fortis Foreign Fund Services AG, Rennweg 57, P.O. Box, CH-8021 Zurich Paying Agent Fortis Banque (Suisse) S.A., Zurich branch, Rennweg 57, CH-8021 Zurich The prospectus and simplified prospectus are available free of charge from Fortis Foreign Fund Services AG, Rennweg 57, P.O. Box, CH-8021 Zurich 5

6 Funds in focus Henderson HF Global Technology A2 USD Investment Strategy The Henderson Global Technology Fund invests globally in technology stocks. It is actively managed and aims to outperform its benchmark consistently. The Manager believes that various cyclical factors drive the technology sector, such as technology super cycle, macro economic data, seasonal factors, technology lifecycle and company-specific product cycles. Therefore, the Manager focuses on companies that benefit directly from those catalysts. JPM Global Convertibles USD A Acc USD Investment Strategy The fund aims to provide a return by investing primarily in a diversified portfolio of convertible securities and warrants, globally. Convertibles offer the performance potential of equities, with the lower volatility and downside protection characteristics of bonds. Performance (See notes on page 15) Performance (See notes on page 15) Source: Datastream Source: Datastream Portfolio Split The portfolio contains roughly stocks. There are no sector or geographical restrictions. However, the average holding is between 0.5 % and 5 % in each position. Current Fund Data and Information Share price Fund size in millions (share class) 677 Domicile Luxembourg Mgmt. Company / Portfolio Mgmt. Henderson ISIN LU Swiss Sec. No Currency USD Status in scope no tax Launch date Management Fee, p.a. (%) 1.20 TER, p.a. (%) 2.01 Dividend payment date Portfolio Split The Fund is ideal for those investors seeking strong outperformance potential combined with lower risk. Current Fund Data and Information Share price Fund size in millions (share class) 369 Domicile Luxembourg Mgmt. Company / Portfolio Mgmt. JPMorgan ISIN LU Swiss Sec. No Currency USD Status in scope tax Launch date Management Fee, p.a. (%) 1.25 TER, p.a. (%) 1.65 Dividend payment date Payment 2009 none Reference index UBS Global Conv Hedged Source: Datastream, Lipper Payment 2009 Reference index Source: Datastream, Lipper none MSCI ACWI IT Legal Representatives in Switzerland J.P. Morgan (Suisse) SA, 8 rue de la Confédération, P.O. Box, 1211 Geneva 11 Paying Agent J.P. Morgan (Suisse) SA, 8 rue de la Confédération, P.O. Box, 1211 Geneva 11 The prospectus and simplified prospectus are available free of charge from J.P. Morgan (Suisse) SA, 8 rue de la Confédération, P.O. Box, 1211 Geneva 11 Legal Representatives in Switzerland Fortis Foreign Fund Services AG, Rennweg 57, 8021 Zurich Paying Agent Fortis Banque (Suisse) S.A., Rennweg 57, 8021 Zurich The prospectus and simplified prospectus are available free of charge from Fortis Foreign Fund Services AG, Rennweg 57, 8021 Zurich 6

7 Fund Selection List Equity Funds Switzerland DWS Aktien Schweiz CHF % % DE000DWS0D27 None DE OUT SMI CHF 7.51 % % Switzerland Small and Mid Caps Pictet (CH) - Swiss Mid-Small Cap P CHF % 7.02 % CH Annual CH OUT SPI S&M Caps CHF 2.97 % % Germany DWS Deutschland EUR % 4.13 % DE Annual DE OUT MSCI Germany EUR 2.78 % % Germany Small & Mid Caps UBS Equity Fund Small Caps Germany EUR % 7.72 % DE Annual DE OUT MSCI Small Cap Germany EUR 2.70 % % Europe Fund/Index Currency Price YTD Perf. 3Y Perf. ann.. ISIN Distribution Domicile Carmignac Grande Europe EUR % 9.40 % LU None LU n.a. DJ Stoxx 600 EUR 5.34 % % Europe Large Caps Henderson Pan European EF EUR % 5.74 % LU None LU OUT FTSE World Europe EUR 4.66 % % Europe Small Caps Gartmore Pan European Smaller Comp. EUR % % LU None LU OUT MSCI Europe Small Companies EUR 1.44 % % France Fidelity Funds - France A Euro EUR % % LU Annual LU OUT MSCI France EUR % % See notes on page 15 7

8 Fund Selection List Italy Fidelity Funds - Italy A Euro EUR % % LU Annual LU OUT MSCI Italy EUR % % United Kingdom Dexia Equities L - United Kingdom GBP % 4.79 % LU None LU IN MSCI Great Britain GBP 9.39 % 5.54 % USA Robeco US Premium Equities USD % 6.75 % LU None LU OUT S&P 500 Composite Index USD 7.57 % 9.80 % USA Small & Mid Caps Schroder ISF US S&M Caps USD % 5.37 % LU None LU OUT Russel 2500 Index USD 2.39 % 8.30 % Japan Oyster Japan Opportunities Fund JPY % % LU None LU OUT Topix Index JPY 8.73 % % China Fidelity Fund China Focus A USD % 2.49 % LU Annual LU OUT MSCI China USD 7.68 % 1.46 % India JPMF India Fund A USD % 0.67 % LU Annual LU OUT MSCI India USD 1.78 % 1.71 % Latin America Blackrock Latin American Fund USD % 0.11 % LU None LU OUT MSCI EM Latin America USD % 1.03 % See notes on page 15 8

9 Fund Selection List Global Equities Emerging Markets Aberdeen Gl Emerging Markets Fund USD % 5.24 % LU None LU OUT MSCI Emerging Markets USD 7.22 % 2.26 % Global Equities Carmignac Investissement (A) EUR % 6.06 % FR None FR n.a. MSCI World EUR 4.39 % % Bond Funds CHF Mid / Long Term Credit Suisse Bond Fund Dynamic CHF % 3.50 % CH Annual CH IN Citigroup GBI Switzerland All Maturities CHF 3.56 % 6.29 % CHF Inflation Linked Credit Suisse Bond Fd Inflation Linked CHF % 2.43 % LU None LU IN Citigroup GBI Switzerland All Maturities CHF 3.56 % 6.29 % CHF Convertible Bonds hedged LODH Horizon - Convertible (CHF) P A CHF % 1.71 % LU None LU n.a. EUR Mid / Long Term BNY Mellon Euroland Bond Fund EUR % 9.00 % IE None IE IN Citigroup GBI Europe All Maturities EUR 2.24 % 6.50 % EUR Corporate Bonds Schroder ISF Euro Corporate Bond EUR % 5.38 % LU None LU IN Citigroup EuroBIG Corporate EUR 3.74 % 6.64 % EUR Inflation Linked Credit Suisse Bond Fd Inflation Linked EUR % 4.22 % LU None LU IN Barclays Euro Govt. Infl-Linked 1-10Y EUR 1.59 % 6.03 % See notes on page 15 9

10 Fund Selection List USD Mid / Long Term Schroder USD Bond Fund USD % 7.85 % LU None LU IN Citigroup WGBI 3-5 years USD 1.43 % 8.25 % Global Bonds Templeton Global Total Return USD % % LU None LU IN Citigroup GBI USA All Maturities USD 5.77 % 7.76 % Global Emerging Markets Bonds Pictet Funds - Global Emerging Debt USD % 9.84 % LU None LU IN JPM EMBI GLB USD 5.37 % 8.19 % Money Market Funds CHF Clariden Leu (Lie) MM Fund CHF CHF % n.a. LI None LI n.a. Citigroup 3 Months CHF CHF 0.06 % 1.53 % EUR Clariden Leu (Lie) MM Fund EUR EUR % n.a. LI None LI n.a. Citigroup 3 Months EUR EUR 0.21 % 2.91 % GBP JPML Sterling Liquidity Fund GBP % 2.76 % LU None LU IN Citigroup 3 Months GBP GBP 0.24 % 3.44 % USD Clariden Leu MM Fund USD USD % n.a. LI None LI n.a. Citigroup 3 Months USD USD 0.12 % 2.40 % Insurance Linked Investments CHF CAT Bond Falcon Cat Bond Fund CHF CHF % 3.55 % CH Annual CH IN Citigroup 3 Months CHF CHF 0.06 % 1.53 % See notes on page 15 10

11 Fund Selection List EUR CAT Bond Falcon Cat Bond Fund EUR EUR % 4.88 % CH Annual CH IN Citigroup 3 Months EUR EUR 0.21 % 2.91 % Asset Allocation Funds CHF Strategy Conservative Swisscanto (LU) Portfolio Fund Yield-B CHF % 0.93 % LU None LU OUT CHF Strategy Balanced Swisscanto PF Balanced B CHF % 4.47 % LU None LU OUT CHF Strategy Growth Swisscanto PF Growth B CHF % 7.93 % LU None LU OUT EUR Strategy Conservative UBS (Lux) SF-Yield B EUR % 1.60 % LU None LU IN EUR Strategy Balanced Swisscanto PF Balanced B EUR % 0.84 % LU None LU n.a. EUR Strategy Growth Swisscanto PF Growth B EUR % 3.04 % LU None LU OUT USD Strategy Conservative JB Strategy Conservative B USD % 1.02 % LU None LU IN USD Strategy Balanced UBS (Lux) SF-Balanced USD B USD % 2.95 % LU None LU OUT USD Strategy Growth CS Portfolio Fund Growth B USD % 7.15 % LU None LU OUT See notes on page 15 11

12 Fund Selection List Sector Funds Energy Investec GSF Global Energy Fund USD % 6.67 % LU Annual LU OUT MSCI Energy USD % 9.95 % New Energy Pictet Fund Lux Clean Energy USD % % LU None LU n.a. MSCI Energy USD % 9.95 % Utilities ING Utilites Fund USD % % LU None LU OUT MSCI Utilities USD % 9.12 % Family Business Kapitalfonds LK Family Business EUR % 4.60 % LU Annual LU n.a. MSCI Europe EUR 4.40 % % Financials CAAM Global Finance USD % % LU None LU n.a. MSCI World Financials USD 8.46 % % Water Pictet Funds Water P Cap EUR % 6.08 % LU None LU OUT MSCI World Water Utilities EUR % 4.32 % Health Care Global BGF World Health Science USD % 2.68 % LU None LU OUT MSCI World Health Care USD 9.57 % 5.39 % Health Care Europe Fortis Equity Health Care Europe EUR % 5.22 % LU None LU OUT MSCI Europe Health Care EUR 5.20 % 4.92 % See notes on page 15 12

13 Fund Selection List Biotech Pictet Funds Biotech P cap USD % 6.40 % LU None LU OUT MSCI World Biotechnology USD % 1.94 % Technology Europe JPMF Europe Technology Fund EUR % 7.47 % LU Annual LU OUT MSCI Technology Europe EUR 2.88 % % Technology Global Henderson Global Technology Fund USD % 2.85 % LU None LU n.a. MSCI World Information Technology USD % 7.30 % Telecom Global Fidelity Funds Global Telecom Fund EUR % 7.15 % LU Annual LU OUT FTSE Global Telecom Index EUR % % Telecom Europe Fortis Equity Telecom Europe EUR % 5.60 % LU None LU OUT DJ EuroStoxx Telecom Europe EUR % 2.92 % Mining BGF World Mining Fund USD % 8.53 % LU None LU OUT MSCI World Metals & Mining USD % % Gold Mines Falcon Gold Equity Fund A USD % % CH None CH OUT FTSE Gold Mines USD % % Source: bank zweiplus ltd, Bloomberg See notes on page 15 Contact Patrik Kauffmann, Productmanagement, T +41 (0) , patrik.kauffmann@bankzweiplus.ch 13

14 Abbreviations A abs.ch ASW avg. actual value absolute change asset swap spread average bn Billion = bp corp. CPI 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 R.H. Scale ROE SAA TAA vs. yoy basis points corporate Consumer Price Index 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 right hand scale 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 14

15 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. 1007_p_dk_10010_en 15