NGGBF UCITS Monthly - July 2019

  • The Fund’s QDEUR Hedged class gained 1.35% (net of fees) in July; +9.90% YTD

  • More mixed performance across assets as markets waited for news from the July FOMC

  • US Fed cut rates 25 basis points but Powell's mixed message left markets on edge

  • US yield curve flattened, shorter dated yields rose as many had expected a 50 bps cut

  • President Trump exacerbated concerns with fresh tariffs on China post month end

  • We think there is much more “left in the tank” regarding our bond positions as valuations still “cheap”

  • The path for global rates is lower

We have been monitoring our Omani positions for some time now. Although bonds rallied through March and April, the market never quite reached our target to reduce exposure, and then in May the long dated bonds underperformed on market rumours, later unfounded, of a default. In July however, following strong performance, our target was reached and we sold the long dated position in Oman around 9 points higher than the low pricing of May, as it had reached less than 1 credit notch cheap according to our Relative Value Models. 

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