Profitability Reports of our clients from June 2015

Profitability Reports of our clients from June 2015


Portfolio returns advised
Although June has been a month generally bad in all financial assets, customers advised by Anchor Capital Advisors EAFI have managed to maintain the profitability of their portfolios at adequate levels.

Conservative Customers accumulate in the last twelve months a yield of 3.83%, much higher than that of low-risk financial assets, such as bank deposits and short-term bonds. Generating profitability was mainly due to the timely exposure in currency (currency USD), rotation means fixed income and short deadlines to monetary terms.

As for portfolios with moderate profile, profitability thanks to the presence of defensive sectors (health) i cyclic (financial, consumption) and the maintenance of positions in high yield bonds, combined with tactical adjustments made for holds conservative profiles. We started in the month taking a position in equities for the most interesting valuation levels, but not yet Greece and its influence on the markets.

Riskier customers continue to have a result in line with the favorable trend in equities, but have been negatively impacted by the correction of most markets. However, the equity positioning in sectors such as health, consumer and financial, have been allowed to have a better performance than the overall market.

June in the financial markets
June has been generally bad for the entire month of financial assets. The markets have moved depending on the progress and setbacks that occurred in the negotiations between Greece and its creditors to release the last tranche funds bailout to avoid bankruptcy of the country.

Macroeconomic data generally predominantly good, they have gone unnoticed for most investors, who have put the focus solely on the Greek crisis and its potential contagion to the rest of the EU. To date, there has been no significant episodes of spreading crisis, except for small spikes in risk premiums on Spain, Portugal and Italy, and a correction in European shares from a maximum that we noted excessive.

Equity Markets
Regarding the evolution of the various assets, European equities ended the month with declines of more than -2% below its monthly average but within the normal range and accumulated a drop of nearly 9% in the quarter . So far this year, however, earns slightly more than + 10%, and in the last twelve months exceeds the annual average + 10.6% accumulating a gain of 11.2%.

Fixed Income Markets
Convertible fixed income, due to its high correlation with the variable, also had a month of losses with a yield of 1.3%, well below its monthly average of + 0.5%. Its quarterly return is also negative, although nearly -3% in the last twelve months earns a + 5.7%, slightly lower than its annual average and leading so far this year, up from + 6% .

In regard to the most conservative active bonds both public and corporate also had negative results in June. Thus, they recorded a fall between -0.56% and -0.75% in the month, far from its positive monthly average of + 0.4%. Only bonds with short maturities had a slight fall of 0.08% in the month.

In the quarter, the bond falls in all its forms, from -0.22% bonds with short deadlines to -5.8% of government debt while the returns for the last twelve months are still positive, although below their averages except in the public debt. The correlation with equities has increased, decreasing the potential for risk diversification traditionally given to this asset.

The latest data shows that only monetary assets show a markedly defensive profile, with yields close to zero in all periods analyzed. The remaining assets, put its annual return close to its historical average, except for high quality corporate debt is positive but less than + 1%.

Foreign exchange
The USD continues to oscillate in a narrow range against the Euro, making it difficult to obtain returns from exposure to currency, unlike what happened in the first quarter. We remain committed to maintaining US dollar exposure as a measure of risk diversification due to the uncertainty generated by Greece.

The recent swing short-term yields shows greater volatility in returns, which implies greater uncertainty over the coming months. The main factors to consider are: Greece and possible contagion to the EU, China and its medium-term economic stabilization, the change of bias in the monetary policy of the Fed and the evolution of corporate profits in Europe.