RBF UCITS Monthly - April 2015

  • The Fund’s USD I Class gained 2.03% over the month
  • Treasury yields stumbled despite little insight from FOMC’s statement
  • Slightly weaker data from China; central bank introduce further policy easing
  • Holdings in Russia continue to perform well

Broadly, April was positive for credit markets although the last few days saw US Treasury yields jump as speculation that the Fed will raise interest rates this year mounted, despite data erring on the weaker side and little insight from the FOMC minutes. The yield on the ten-year Treasury ended 11 basis points higher over the month, closing at 2.03%. In Europe, Switzerland issued its first ever ten-year government bond at negative yields and there were an increasing number of eurozone government bonds trading at negative yields, with the likes of Germany and the Netherlands trading below 0% for up to five year maturities.

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RBF UCITS Monthly - March 2015

  • The Fund’s USD Class was up 3.24%
  • FOMC have run out of “patience” but are not “impatient”
  • ECB kicked-off Q€ sending eurozone sovereign yields to near record lows
  • China growth expected to be “around 7%”, plenty of room for policy easing
  • Much of the world still facing deflationary risks

The Fund’s USD class gained 3.24% in a month that witnessed: the Fed running out of “patience”, the announcement of the ECB €1.1tn Q€ program and the rest of the world broadly easing. Geopolitical events in the Middle East caused some volatility in oil markets and the dollar continued its rally, despite dipping after the dovish comments from the Fed. The ten-year US Treasury fell seven basis points to end the month at 1.92%.

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RBF UCITS Monthly - February 2015

  • Risk-on appetite in February after the announcement of ECB QE
  • US data still mixed, though Fed appear more hawkish, market is pricing a mid-year rate hike
  • Best performing bonds came from holdings in Russia
  • China growth lowered to “around 7%” for 2015, highlighting the need for higher quality and more sustainable growth

Asset markets witnessed a risk-on appetite as focus was once again dominated by central bank easing, in particular the launch of ECB QE. Greece once again took centre stage narrowly avoiding the potential “Grexit” as the eurozone agreed on a short-term bailout extension. The US dollar continued its rally into February. US data was once again mixed, however, the Fed appear more hawkish particularly after January’s non farm payrolls number was released above expectations. Over the month oil rebounded with Brent up 16% and the yield on the ten-year US Treasury rose 35 basis points to end the month at 1.99%. Outside of the US, the trend to negative yields continued; in Europe Germany sold five-year debt at a negative yield for the first time, joining the likes of Denmark, Finland, Austria, Switzerland and the Netherlands, all with negative yielding five-year bonds. 

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RBF UCITS Monthly - January 2015

  • Geopolitical risks within eurozone and global growth and deflationary fears heighten market volatility
  • Weaker-than-expected US data, growth in fourth quarter of 2014 slips
  • China growth for 2014 around 7.5% target
  • Russia’s credit rating downgraded by S&P, but country remains very creditworthy
  • Central banks retain their ultra-supportive stance

January proved to be volatile across all markets resulting from: the ECB’s quantitative easing decision, the Greek election and subsequent threat on eurozone integrity, further oil weakness and weaker-than-expected US growth. A risk-off tone towards the end of the month saw the yield on the ten-year US Treasury fall 53 basis points to 1.64%, while the thirty-year benchmark yield fell to record lows of 2.22%. Equity markets also sold off with the S&P Index falling 3.10% over the period.

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