Sparinvest - Fondsupdates

16-01-2012

Fondsupdate Investment Grade Value Bonds Q4 2011 (Engelstalig)

The 4th quarter of 2011 was difficult in a relative performance context. Value, as a style, continued to struggle, and so did Europe compared to the US. We know from previous business cycles that Value as an investment style underperforms as the market prices in a recession.

The 4th quarter of 2011 was difficult in a relative performance context. Value, as a style, continued to struggle, and so did Europe compared to the US. We know from previous business cycles that Value as an investment style underperforms as the market prices in a recession. This time was no different. Europe continued to underperform the US and the rest of the world, because of the European debt crisis. We expect the first half of 2012 to be volatile because of nervousness around the European situation. In the end we expect 2012 to be a year with solid excess returns for credit compared to AAA-rated government bonds.

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16-01-2012

Fondsupdate High Yield Value Bonds Q4 2011 (Engelstalig)

The 4th quarter of 2011 was difficult in a relative performance context. Value, as a style, continued to struggle, and so did Europe compared to the US. We know from previous business cycles that Value as an investment style underperforms as the market prices in a recession. This time was no different. Europe continued to underperform the US and the rest of the world, because of the European debt crisis.

The 4th quarter of 2011 was difficult in a relative performance context. Value, as a style, continued to struggle, and so did Europe compared to the US. We know from previous business cycles that Value as an investment style underperforms as the market prices in a recession. This time was no different. Europe continued to underperform the US and the rest of the world, because of the European debt crisis. We expect the first half of 2012 to be volatile, and we expect 2012 to be a year with solid excess returns for High Yield compared to AAA-rated government bonds. In this respect, it is important to note that ‘soft’ growth is no obstacle to excess returns in credit. The chart below illustrates that for Investment Grade credit excess returns since 1948 have been highest in periods of soft growth (1-2% GDP growth). The reason is that companies behave prudently in periods of ‘soft’ growth – i.e. they don’t ‘overspend’ but tend to focus on debt reduction.

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16-01-2012

Fondsupdate Ethical High Yield Value Bonds Q4 2011 (Engelstalig)

The 4th quarter of 2011 was difficult in a relative performance context. Value, as a style, continued to struggle, and so did Europe compared to the US. We know from previous business cycles that Value as an investment style underperforms as the market prices in a recession. This time was no different. Europe continued to underperform the US and the rest of the world, because of the European debt crisis.

The 4th quarter of 2011 was difficult in a relative performance context. Value, as a style, continued to struggle, and so did Europe compared to the US. We know from previous business cycles that Value as an investment style underperforms as the market prices in a recession. This time was no different. Europe continued to underperform the US and the rest of the world, because of the European debt crisis. We expect the first half of 2012 to be volatile, and we expect 2012 to be a year with solid excess returns for High Yield compared to AAA-rated government bonds. In this respect, it is important to note that ‘soft’ growth is no obstacle to excess returns in credit. The chart below illustrates that for Investment Grade credit excess returns since 1948 have been highest in periods of soft growth (1-2% GDP growth). The reason is that companies behave prudently in periods of ‘soft’ growth – i.e. they don’t ‘overspend’ but tend to focus on debt reduction.

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16-01-2012

Fondsupdate Emerging Markets Corporate Value Bonds Q4 2011 (Engelstalig)

The emerging market train has slowed but NOT stopped!
In 2011 the return from the emerging markets corporate bonds asset class had its ups and downs. After a very positive first quarter of 2011 the mood changed as fear of a European meltdown increased. In the second half of the year, emerging markets started to feel the spillover effects from the weaker economic outlook in Europe and US which led to lower demand for emerging markets goods.

The emerging market train has slowed but NOT stopped!
In 2011 the return from the emerging markets corporate bonds asset class had its ups and downs. After a very positive first quarter of 2011 the mood changed as fear of a European meltdown increased. In the second half of the year, emerging markets started to feel the spillover effects from the weaker economic outlook in Europe and US which led to lower demand for emerging markets goods. The Chinese economy has strong links to Europe but these have been decreasing over time as the economy has slowly but steadily changed from being export-driven to becoming more consumer-driven. In fact, China now appears willing to take the necessary steps to stimulate domestic consumption in order to keep economic growth rolling. It is therefore important to stress that whilst emerging markets are facing a downturn in growth, emerging economies are still set to maintain high positive growth rates the coming years.

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16-01-2012

Bericht aan aandeelhouders Value Obligaties Q4 2011 (Engelstalig)

After a relatively benign first half, risk premia ballooned over the second half of 2011. Credit spreads now stand dislocated from current corporate fundamentals, default rates and growth expectations. With liquidity poor and volatility high, risk aversion prevails and credit markets are in a state of limbo.

After a relatively benign first half, risk premia ballooned over the second half of 2011. Credit spreads now stand dislocated from current corporate fundamentals, default rates and growth expectations. With liquidity poor and volatility high, risk aversion prevails and credit markets are in a state of limbo. Evidence is mounting of a more general, global risk aversion towards euro-denominated assets. Consequently, now more than ever, the overall future direction of credit markets is beyond the influence of corporate fundamentals and returns next year will be driven, to a large degree, by political will.

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