Absolute USD International Portfolio
To achieve Absolute return and Wealth preservation, using a top-down approach, we look at buying mega-cap, market-leading companies that generate significant amounts of cash, that withstand tough economic conditions.
Current global snapshot
Global Markets: Global Economic Slump vs Record Stimulus
Global Economic Slump: The world economy was effectively shut down in March/April and started to emerge in May/June. World GDP is set to contract at a rate not seen since the great depression. The lifting of mass quarantines later in the year will set the stage for an economic recovery in 2021. This, we believe, will not be V-shaped and will play out in different countries in different ways (the US will lead the Western economies). Within countries, economic recovery will also play out in different industries in different ways (Tech & Healthcare vs Travel & Leisure by way of example).
The most concerning development has been the realization that lock-downs (partial and otherwise) globally will be protracted and may last 18 – 24months.
Record Stimulus: Post the March 2020 crash, record amounts of Quantitative Easing (both fiscal and monetary) have been provided by governments worldwide (to date $9trn and counting). Global short-term interest rates have been slashed and are expected to remain lower for longer. World financial markets (both stock and bond markets) have rebounded strongly.
World markets, in our view, are overvalued and would need either a sharp correction of asset prices or a strong economic (in turn earnings) recovery for us to get excited again.
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Hurdle Rate: US LIBOR +3%
What makes our Skycastle portfolio and process stand out, is our insight and experience in managing portfolios in times of crisis. Our unique asset allocation, coupled with the ability and flexibility to make timeous decisions in an ever-evolving environment
*Portfolio positioning and current global snapshot is a point in time, for updated info please contact us