Be careful of what you wish for....
I suppose it's always gratifying to be able to say "I told you so", or "don't tell me you weren't warned", but last week's Hedge Clippings was entitled "Lookout for the unknown unknowns", and went on as follows:
"I don't know if it is just me, boredom with the election campaign both here and in the US, or a case of going grey, getting old (and grumpy) but I get the feeling that something significant is going to shake the world's major economies and their current low growth, low inflation trends."
And even though we noted that Brexit was a "known unknown", all the smart money, if that's how one describes the bookies and various UK fund managers, were backing the REMAIN vote, and presumably putting their money where their mouths were. Sadly (for them) and for the stability of financial markets for the foreseeable future, based on current indications they got it badly wrong.
Of course in last week's Clippings we did go on to say that we didn't know what the event might be, when all the time it was right there in front of us. However, sometimes you just have trust your gut feeling, combined with a reasonable understanding of the peculiar vagaries of the psychology of the English, and the peculiarity of a voting system that relies on the weather to determine a nation's future.
So what happens now is anyone's guess, but what is certain is that volatility will be back with a capital V. Markets hate uncertainty, and that's now what they've got, and here in Australia we will not be immune to it.
Affluence Investment Fund rose 1.87% to take annualised return since inception to 11.8% p.a.
NWQ Fiduciary Fund rose 2.86% in May bringing the net performance for the trailing 12 months to 9.50%.
Bennelong Twenty20 Australian Equities Fund returned +4.48%, outperforming the ASX200 Accumulation Index by 1.39%.
Signature Quantitative Fund generated a positive return of 0.40% in May to take annualised return since inception to 7.18% p.a.
APN AREIT Fund returned +1.58% in May to take annualised return since inception to 18.46% p.a.
QATO Capital Market Neutral Long/Short Fund returned 2.19% in May. The Fund is negatively correlated to the S&P/ASX-100 Index (beta of -0.33).
FUND REVIEWS released this week: Bennelong Kardinia Absolute Return Fund; Pengana Absolute Return Asia Pacific Fund; APN Asian REIT;
And on that note, try to have a great weekend working out the ways of the World.
Regards,
Chris
CEO, AUSTRALIAN FUND MONITORS
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