Q4 2014 – Quarterly Investment Letter

The key instrument to fix the current financial and economic crises is global growth. The hopes projected into the recovery of the economy were dented in September due to somewhat U.S. weak data. We believe, however, that the U.S. economy will continue to grow at its modest but steady pace.

The disappointment regarding U.S. growth led to a significant correction in the financial markets. In fact, it was the tipping point for investors who had already growing macro-economic and geopolitical concerns.

The correction affected particularly the stock markets and credit spreads – both attractive return sources in the current world of zero interest rate policies.

Concerns regarding global growth and the absence of inflation will slow down the much anticipated monetary tightening. Thus, rates will be lower for longer. This is good news for credit spreads and equities. The former will provide investors with interesting cash flows while the latter will offer value-based price appreciations and dividend payments. It is therefore recommended to rely on stock/ securities selection skills of active managers instead of buying just the market.

Full Quarterly Investment Letter Q4 2014

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