Asset Management

We combine deep qualitative analysis by our team of investment specialists with powerful quantitative analysis from our proprietary software to inform an unconstrained approach for strong, risk-adjusted returns.

October 2018 Investment Update

Georgios Mouskoundi, Head of Advisory, introduces our investment update for September. 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.

Brexit, blockchain and banking

What would it take to make London the digital capital of the world? Dolfin CEO Denis Nagy joined the line-up of speakers at Binary District’s most recent London event to consider whether blockchain is the answer.

Dolfin awarded custody and depositary licence in Malta

Ramon Bondin, recently appointed CEO of Malta-based Dolfin Asset Services, announces our new custody and depositary licence on the island and how it will benefit our clients.

Q3 2018 investment outlook

Our latest investment outlook is now available. It contains macro analysis by region and asset class, actionable investment ideas, and a scorecard showing how well the suggestions presented in our previous outlook have performed since. Our CIO, Vassilis Papaioannou introduces it.

Download Report pdf, 6 MB
18 July 2018 / Quarterly outlooks
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De-synchronisation of global growth, the impact of tariffs on corporate earnings and the US mid-term elections will likely dominate investors’ perceptions in the next quarter.

Six months into the year, investors are still struggling to find returns in equity and credit markets and we continue to hold a cautious outlook across asset classes, albeit with a moderately positive bias towards equities and a negative bias for global rates (consistent with our views from the second quarter).

What can we expect from the ongoing trade war saga and how will it affect global growth?

The current ‘tit-for-tat’ trade war is leading parties involved (and by-proxy, the global economy) into a ‘lose-lose’ outcome. In the short-term, protectionism will result in economic de-synchronisation. Ultimately though, higher inflation will take a toll on consumers and global growth. President Trump is standing by his election promises and keeping his protectionist rhetoric intact, while his team must balance the pros and cons of such a strategy as the decisive US mid-term elections loom. Although Harley Davidson is the first casualty on the US side, other companies will likely follow, especially in Republican states. Political pressure on Trump may well escalate. That said, on 1 July, China introduced tariff cuts on consumer goods and automobiles – more than a thousand taxable consumer goods were reduced from an average rate of 15.7 per cent to 6.9 per cent, while tariffs on cars and auto parts were reduced to 15 and 6 per cent respectively – raising hopes of a sensible solution.

In this context of heightened political noise, we maintain a pragmatic approach. Our baseline scenario is for a moderation of global growth and higher inflation in the long term, but we are comforted by tight labour markets and healthy consumer spending around the world. We expect a pickup in economic activity in Europe and the UK, although we acknowledge the superior macroeconomic position of the US.

Turning to asset class views, we are neutral on rates with a negative bias. Normalisation of monetary policy will likely continue, led by the hawkish Fed, but moderation in global growth will leave rates in a sideways formation.

In the credit space, carry collection remains the only game in town as tight spreads offer no major upside. We continue to favour global high yield over investment grade, focusing on issuers with strong fundamentals.

For equities, we expect modest gains for the coming quarter, contingent on positive earnings from the corporate world. Robust economic activity and divergence from the rest of the G7 group makes the US our preferred region. However, flat returns year-to-date make Europe and UK attractive destinations too. On a sector level we see value in the consumer sector followed by technology and energy.

The emerging market space experienced heavy losses in the previous quarter – owing to political events (in Turkey, Mexico, and Brazil) and trade related factors (in Asia Pacific). Although we don’t see imminent recessionary risks, expectations for a growth moderation and a stronger dollar cast a large shadow on this space. The only bright spot currently, and unrelated to the World Cup, is Russia.

In conclusion, the summer lull will be stirred by strong doses of political ambivalence and corporate (as well as macroeconomic) realism. As always, investors should look through the noise especially in a bull market that stretching its limits and a world economy that is trying to re-synchronise.

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