Q2 2024-Quarterly Investment Letter

Core economies sustained late-stage expansion, while China pursued policy adjustments aimed at stimulating economic growth.

Market optimism drove the S&P 500 to record highs, supported by robust economic indicators, including a strong job report and GDP growth exceeding expectations.

The Federal Reserve’s hawkish stance on interest rates and uncertainties surrounding inflation and domestic demand tempered sentiment.

The ECB maintained rates, awaiting economic stabilization evidence before potential policy adjustments in June.

In China, economic challenges persisted, with weak retail sales and housing activity despite meeting Q4 GDP growth expectations. Japan’s Nikkei 225 surged, and the Bank of Japan ended its negative interest rate policy, signalling economic revitalization.

Conclusion: Given the absence of an impending severe recession we keep our positive bias for risky assets. Nevertheless, we stand ready to diminish our equity exposure in the event of a resurgence in rates or an economic cooling. In a low economic growth environment dispersion among companies and sectors is rising and calls for an active management. Overall, we maintain an overweight position in credit investments, with emphasis on loans and non-cyclical short-term high-yield bonds offering yields of 7-9%. Our stance on equities is positively tilted, but we lean toward an absolute return approach rather than a traditional relative value mandate in this environment.

Full Quarterly Investment Letter Q2-2024

Q2 Quarterly Reports Investment Management
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