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October 2019 investment update

One of the most common questions asked in client meetings is ‘What makes Dolfin different’? Clients often feel that they want their investment manager to stand out from the crowd and to be delivering something ‘better’ than their peers.  Read more in our October monthly investment update, now available to download and view online.

Cybercrime: Threat and opportunity

With cyber criminals constantly on the lookout for new ways to attack companies’ resources and compromise their data, there are numerous start-ups entering the cyber security space. At the same time, an estimated skills shortage of some 3 million people has left organisations struggling to recruit and retain skilled professionals. We look at what is being done in companies to ensure that the industry keeps pace with cyber criminals, and investment opportunities in the space.

Dolfin shortlisted twice in the International Investment Awards 2019

Simon Black, our Head of Investment Management, has been shortlisted in the ‘Emerging Talent of the Year’ category and Dolfin as a firm for ‘Excellence in Client Service’, in the annual International Investment Awards. Voting is now open.

October 2018 investment update

Georgios Mouskoundi, Head of Advisory, introduces our investment update for October. The document contains an overview of our views on the various asset classes, as well as a range of high conviction investment ideas in equities and fixed income.

Download Report ,
8 October 2018 / Monthly investment updates
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September – and the entire quarter for that matter – saw the US bull market reach unprecedented heights. US stocks posted a 7.2 per cent gain for the three-month period, the strongest quarter since 2013. The booming economy accompanied with strong consumer confidence and the lowest level of jobless claims since 1969 have delivered attractive returns, far outpacing global markets.

In other markets, the month was dominated by news about the US/China trade wars, political developmets in Turkey and Italy and, of course, the latest on the ongoing Brexit negotiations. The last topic notwithstanding, the FTSE100 was up over 1 per cent in the month. The gradually increasing US interest rates and dollar strength further fuelled headwinds in emerging markets.

With regards to investments, fixed income returns have been lacklustre, with high yield credit outperforming government bonds. Against this backdrop we see little upside and remain negative on government rates. Strong growth data has pushed the US 10-year yield above 3 per cent and policy and inflationary expectations remain unchanged. Higher rates have weighed on investment grade returns year-to-date across the developed world. As such, we maintain our short duration and our overweight to high-yield has proved a positive in recent months, owing to tighter spreads and higher carry.

For equities, we remain positive and although we still see further upside for the US, we are highlighting a relative play towards Europe. With the US year-to-date outperforming the European stock market by 11 per cent, Europe provides good upside with attractive valuations and accommodative macro environment.

Looking ahead, a great deal of newsflow has been factored in. Near term, the potential for a further escalation in trade tariffs emanating from the US, and the subsequent retaliation is the most likely area of concern. It is difficult to see any winners from this. A trade war will inevitably impact all regions and observers have indicated that even up to 1 per cent of global GDP could be lost through this alone. Trading partners may benefit as they look to do trade elsewhere and Chinese exporters could gain market share at the expense of their US rivals.

Furthermore, as we enter Q4, a tightening US monetary policy was always going to be seen as the likely candidate to spoil the extended bull market. After all, the US is in the latter stages of the business cycle, and no recovery lasts forever. However, the equity market’s more sanguine reaction to current policy signals, including the anticipated rate rise in December, suggest there may be further upside in the short term.

In the context of this background we remain constructive in the short term towards risky assets. With an accommodating outlook for global growth, albeit higher inflation, there is comfort from tight labour markets and healthy consumer spending around the world. Investors should be cognizant of the narrowing of the desynchronisation of global growth with the US, the potential impact of tariffs on corporate earnings, not to mention the US earnings season, as well as the US mid-term elections over the coming months which will further guide the markets as we start looking towards 2019.

Enjoy the monthly.

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Founded as a London-based wealth boutique in 2013, today we’re a diversified financial services firm with an international presence and our own bespoke technology platform.

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