Profitability Reports of our clients from May 2015
Friday, 12 of June 2015
Advised portfolios performance
The month of May has been mixed as to the performance contribution from different asset classes. On the one hand, equities have provided positive returns and, on ther other, fixed income has behaved negatively, driven by the correction in prices of government bonds. However, the conservative and moderate profiles continue to show good annual returns, with 4.90% and 18.10% respectively. Moreover, riskier profiles obtained 18.18% in the last 12 months.
Weighted average of all portfolios within each profile. Gross performance: the effect on gross returns published because of advisory expenses ranges from 0.25% to 0.60% per annum depending on the profile. Current Year indicates the cumulative return in the last twelve months
Evolution of the main asset classes
The behavior of the assets is shown in this graph, where intervals of return are the "normal" result that an investor would have to wait for periods of one year, with the average and the latest data.
We highlight that only equity presents a return above its average, while the remaining assets do below average.
Throughout the month of May, Equity indices ended slightly lower, dragged down by uncertainty about Greece, the fear of low growth in the US and the contagion from volatility in sovereign bonds. Nevertheless, the result of the last 12 months remains above its average and is the asset class that accumulates the highest return with 10.30%.
Fixed Income Markets
Sovereign fixed income had a bad performance in the month, with declines fairly high in price and increases in their required return. Thus, the IRR of the German Bund rose from 0.37% to 0.50%, with a price drop of 1.5%.
Maintaining a high correlation between Fixed Income and Equities makes more complicated to diversify risks, thus increases volatility on most profiles. ECB expansionary policies fueling this phenomenon, despite the recent corrections bonds.
With respect to the money market, the situation will remain near zero returns. However, its protective effect on market corrections should not be underestimated on.
The USD had a volatile month due to macroeconomic data and developments in the negotiations in Greece, finishing with an appreciation against the EUR. Our medium-term view is still favorable to the dollar and sterling.