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07 Sep 2022


Developed market equities retraced after Fed Chairman Powell’s hawkish comments at the Jackson Hole economic symposium held in the last week of August. Any near-term hopes for a dovish Fed pivot were dashed by the Fed governor’s commitment to tighten financial conditions despite knowingly causing “pain” to households. 

European bourses underperformed on rising investor fears of a European recession and further hindered by euro weakness. Emerging markets outperformed led by Brazil, where oil’s strong 12-month gain continues to propel the economy, despite the recent declines. Indian markets also rebounded on stronger economic activity.

Energy was the only sector to see positive returns during the month, while the prospect of rising real interest rates weighed heaviest on the rate sensitive information technology and real estate sectors. 

Developed market bond yields moved higher as the US yield curve further inverted, with yields on short-term US Treasuries rising to levels not seen since before the Global Financial Crisis. Bellwether industrial commodities oil and copper declined as recession fears rose on Powell’s inflation fighting resolve, while soft commodities were mixed. 

Precious metals gold and silver fell sharply on rising expectations for higher real interest rates, given the increasing opportunity cost to holding these non-interest-bearing assets. The US dollar again strengthened against the other majors as the interest rate differentials between the US and other developed economies continue to widen.

In the Foord International Fund, portfolio hedges including a short S&P 500 futures position contributed most to fund returns in the falling market while UK electricity utility SSE Plc and precious metals streamer Wheaton Precious Metals were the largest detractors. With its conservative approach, the fund has continued to protect investor capital this year — the 2022 year-to-date return is -1.2% against a global equity market decline of -17.8%. 

The Foord Global Equity Fund’s outperformance was driven by positive information technology sector stock selection and a lower-than-index allocation to the underperforming sector. The fund’s materials sector holdings including Pan American Silver and Freeport-McMoRan detracted. 

The Foord Asia ex-Japan Fund outperformed its benchmark index, driven by consumer discretionary investments such as VIPShop and The off benchmark holding in Jardine Cycle and Carriage also contributed positively. 

There were no material changes to the diversified and relatively defensive portfolio settings in the month. High levels of liquidity have also been maintained to maximise flexibility given expectations for further market volatility and the long-term investment opportunities that this typically presents. The funds are well positioned to build on year-to-date outperformance as our base case bear market investment thesis continues to unfold.



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