Q4 2017 – Quarterly Investment Letter

Continued global growth recovery while inflation remains surprisingly low.

Equity markets are still leading the way in an environment where all risky assets have done very well since the beginning of the year.

Investment Grade bonds have lagged the more credit centric investments such high yield bonds or loans. Loans in Europe, but also in the U.S. remain our largest allocation within our fixed income portfolios. Thorough credit selection is a key success factor.

Hedge funds have delivered some alpha lately but their performance is still much linked to the broader markets.

The U.S. political situation continues to dominate the headlines but markets are no longer reacting to every news flow. The FED announced that it will start reducing its balance sheet in the coming months. We expect a further rate hike this December.

The ECB starts to scale back its Quantitative Easing program in 2018 as the European economy is surprising on the upside, but inflation is still tame.

Acceleration of economic growth momentum leads to a broader and self-sustained continuation of the business cycle. Thanks to the better visibility, companies increase their investments and show more M&A activity to increase corporate revenues and to support (elevated) EPS ratios. The current stage of the economic cycle continues to be favorable for equities, whereas credit markets benefit from low expected default rates.

Full Quarterly Investment Letter Q4 2017

Alpinum Quarterly Investment Letter 2-2020
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