Monthly commentary BMS January 2019
Brummer Multi-Strategy (BMS) SEK delivered an estimated return of 0.2 per cent in January (0.4 per cent for the USD class).
2019 started with a strong risk-on rally with equities trimming much of losses from the last months of 2018. Neutral to dovish rhetoric from Federal Reserve officials, promising to be more data dependent, boosted confidence among investors. Communication of a more accommodative path for monetary policy from the Fed contributed to a weakening of the US dollar and Japanese yen. China and the US resumed negotiations to resolve the current trade dispute. The British pound rallied following a decreased market perception of the likelihood the UK leaves the EU without a deal.
Six of the nine funds in which BMS invests contributed positively to performance in January. Nektar had a good month generating returns primarily from inflation and relative value strategies. Among the long/short equity funds, US focused Black-and-White and Manticore contributed positively, while Europe focused Bodenholm had a difficult month. Systematic trend-following funds Florin Court and Lynx struggled with the reversal in the downward trend in energy prices which outweighed gains from fixed income positions, while the systematic equities fund AlphaCrest had another positive month.
Ahead of February, the portfolio managers made minor changes to the allocations in the underlying funds.
