Profitability Reports of our clients from November 2015
Friday, 11 of December 2015
It’s noteworthy the good behavior that equities have been presenting over the year. Despite the high volatility witnessed in the months of August and September, returns have been well above the average over recent months.
As a result, we found out that the vast majority of the indices are around their fair value levels.
Fixed Income Markets
So far for October, the situation has changed slightly in the bond markets. Although the balance has been positive for all the values this month, in the convertible bonds market we saw that the returns were below the average. Even so, the performance remained positive attending to the 3 months and 1 year back (+4,20% and +8,22% respectively).
As for the other bond markets, the public debt continued showing positive returns above or near the one-month-average which got the highest yield (+1,21% with respect to its average of +0,4%). Despite this, for the annual report presented, the data remained below its usual average for the year.
Secondly, we found that although the corporate debt had returns above the average in the recent months, (+0,27% vs the +0,1% of the average), quarterly and annual balance continued presenting losses of -2,22% in the annual calculation. In addition for this asset, if we look at the comparative risk-return chart, this is the less attractive since it has lower profitability assuming higher risks than the Treasury Bills or the Public Debt to 1 or 3 years.
In contrast, the evolution of the Public Debt from 1 up to 3 years has been more stable presenting positive returns during the whole year. Despite the good data, the annual returns were below their historical average to 1 year (+1% vs the +2,8% of the average).
As for monetary assets, the performance presented by the Treasury, has been zero and hasn’t reached in any case the values presented by historical averages.
So that in order to conclude, the most attractive assets during the last month had been public debt across all maturities and the less attractive both; public debt from 1 to 3 years and corporate debt.
As for the currency market, the most relevant fact had been the cuts below -4% in the EUR/USD after the statements made by the President of the ECB pointing out new expansionary measures in order to enhance the path of economic growth and levels of prices. In addition to the expectations of a US rate hike by the FED in December, factor that has been benefiting the USD during the last sessions, so that at the closing session of the month its quote was close the 1,057 EUR/USD levels.