The MSCI Europe was off 4.44% in September on the back of weak data out of China, falling EM currencies and the Fed’s decision to leave rates unchanged. Meanwhile, the ECB said its QE programme could be adjusted ‘in size, composition and duration’, as it downgraded its inflation forecast.
The bond markets also saw investors turn risk averse, as the German 10year fell to 0.59% from 0.80% and 10year treasuries to 2.04% from 2.22%. Brent fell 12.1% to $49.05, while gold fell to $1,114.
The fund outperformed its benchmark by 3% in September. This was due to the Fund’s lack of exposure to cyclicals as the markets sought safety in the more defensive sectors. The top contributors to performance were RELX, Beiersdorf and Imperial Tobacco. The biggest detractors were Shire, Cerved and Bayer. New positions were established in Anheuser-Busch and Philip Morris, while positions in Fagron and Michael Page were closed.
The views and statements contained herein are those of Lofoten Asset Management in their capacity as Investment Adviser to the Fund as of 21/10/15 and are based on internal research and modelling.