Profitability Reports of our clients from December 2015
Monday, 11 of January 2016
The yield obtained in the financial markets in the last month of the year was generally negative, especially for equities, now strongly correlated with changes in oil prices.
Depending on the indicator used for analysis (European equities performance with net dividends reinvested), the decline meant cuts up to -1.63% in December for the euro zone. If we consider the last three months, the view is even more negative, since the cuts were up to -3.32% and has been accompanied by high levels of volatility.
In advance of January of 2016, the beginning of the year has not been entirely positive after poor data against manufacturing PMI leading indicator in China, a factor which caused heavy cuts for the main worldwide.
Fixed Income Markets
Regarding the situation of fixed income in the month of November, the situation has changed especially for public debt across all maturities which has grown from superior performance to + 1% in the IRRs to a drop of the same -0.27%. Even so, the cumulative three-month and annual still maintained positive sign.
The type of asset that with the worst performance in December, has been the Convertible Debt after presenting a yield of 0.40%. However, it has maintained the yields with positive sign for the three months away, and in the last year has been the most profitable asset.
In the same vein, government debt across all maturities had presented cuts of -0.27% last month and an annual positive performance (+ 0.77%). It is noteworthy that this type of asset gets an average yield of 5.2% while volatility levels stand at around + 4%.
Note: The graph was prepared based on the historical average volatility 1 month 20 years.
However, if we consider the corporate debt, the yields were negative for both last month and for the three months ahead and for the last year showing a return of -2.75%, well below its average (+0,4%).
No large variations in emissions of Treasury; + 0.01% over the month coinciding with the average level and volatility levels presenting close to 0%.
We highlight the recovery of EUR respect its main counterpart, closing the year at levels of 1.0860 EUR/USD and having reached a maximum of 1.1025 EUR/USD.
The reason is found in the public good macro data, which points to a recovery in the level of prices and favorable outlook for economic activity (manufacturing PMI levels exceeding previous forecasts and data on 53.1).
As of year-end balance, the best performing financial asset has been obtained convertible debt offering a performance of +4.2% (below the average of +7%). As far as equities are concerned, despite having obtained a positive return, the +0.72% made falls far below the average of + 9.3% annually).
By contrast, the worst result has presented the Corporate Debt with cutouts of -2.75%.