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Wishes for 2023

Wishes for 2023

December update

– Equity markets continued their rebound in November on hopes that the Fed will moderate the pace of rate increases going forward and that China will soon relax its zero covid policy. The Q3 earnings’ season was another positive support as companies managed to release better-than-feared results.

– On the bond side the rapid pace of FED monetary tightening, combined with growth concerns and geo-political turmoil, has led to unprecedented outflows in the space, creating huge volatility and dislocations. These irrationalities provide a fertile soil to buy appealing bonds with a favorable risk/return.

– Across the range, most of the funds returned strong positive performance in November.

– We are preparing the agenda for 2023 and to kick off the year on a positive note, we will be hosting a K Women event in Paris on January 19th with another exceptional European leader

November update

– October saw equity markets’ recovery supported by some less hawkish Fed comments combined with a positive start to the earnings season. On the bonds side, the sell-off slowed with a slight rebound in the High Yield environment. Policymakers are trying to curb inflation by cooling down consumption at the cost of pushing the economies into a recession. Overall across the funds range, performances were positive for the month.

– Client facing activity and roadshows remain limited as investors are still puzzled on the outlook. Portfolio managers were in Monaco and Belgium for presentations and updates. We also hosted a popular K Women event in Paris last week. We are considering 2 new partnerships to join the funds range. More info in due course.

– Despite the latest hot inflation prints, deflationary forces are in motion and markets are showing some positive momentum recently. Is this sustainable and a turning point ? Such an environment requires an active approach, focused on discerning between low and high-quality names, and an adequate compensation for risk. The objective should remain the same: targeting sound countries and companies, keeping in mind that fundamentals, sooner or later, will be again the drivers of price action.

K Women Leader’s tips in Paris with Audrey Koenig, CEO Natixis Wealth Management

K Women Leader’s tips in Paris with Audrey Koenig, CEO Natixis Wealth Management

October update

– Pressure on financial markets showed no intention to ease in September: the sell-off spared no asset class, the MSCI World Index reported a 9% drop, on the bonds side, key indices plummeted by 5 to 8%. Inflation reports strengthened policy makers’ commitment to further raise interest rates. Chinese authorities maintain a more dovish stance, as they need to deal with the economic slowdown. Looking at the Russia-Ukraine war, Russia claimed annexations and the Nord Stream damages resulted in increased level of escalation of the conflict.

– On the back of this, all the funds ended in negative territory for the month. Given the uncertainty that dominates the current environment, market could be expected to remain quite volatile and extremely sensible to news, especially on the War front. However, it is in times like these, when prices severely drift away from fundamentals, that investors can lay the ground for future performance by focusing on the strength of the balance sheets rather than price action. For this reason, relying on active management with a solid bottom-up investment approach and diversification, will be key to generate appealing returns.

 – We organised a webcast on Hydrogen opportunities last month. The Webcast recorded high attendance, confirming the interest in this sector from investors.

– Finally in September we renewed our support to the French charity La Chaîne de l’Espoir, providing medical and surgery support for women and children around the globe (Afghanistan, Haiti, Mali,…).

September update

– Thanks to a solid Q2 earnings season, August started well for equity markets unfortunately, the mood turned following a more hawkish tone at Jackson Hole with Fed reinforcing the need to keep interest rates in restrictive territory as long as necessary to bring inflation down.

– Considering the equity bias of the funds range, performances year-to-date across the range is mostly in negative territory (excluding LatAm) along with peers. This is the time to stay close to investors and ensure we provide any useful information and updates.

June update

– The Financial Times reveals that last month, U.S. corporate ‘Executives bought the dip at rate not seen since start of pandemic’. While the Q1 earnings’ season was solid across sectors despite the geopolitical and economic uncertainties, positive earnings revisions were limited. Inflation remains the key concern for investors with deteriorating macro-economic indicators getting more attention. On the bond side, the first five months of the year have been negative. Year-to-date return for the Bloomberg US Treasury Index is -8.7%, worst ever since the index’s inception in 1973. With significant volatility, may recorded another challenging month across the fund range.

Investment teams are available, more than ever, for updates & calls to ensure investors get full transparency on the funds. We are also hosting several group calls (via Zoom) and a virtual roadshow in the next couple of weeks.

May update

– Equity markets and funds had another difficult month in April as geopolitical tensions, new lockdowns in China and related supply chain disruptions, runaway inflation and, more recently, worries about a global economic recession all contributed to further depress investors’ sentiment. The Nasdaq Index lost more than 13% in one month, its worst decline since October 2008 while the S&P was down almost 9%, a monthly drawdown not seen since the pandemic crisis. The Fed seems to no longer believe that inflation is transitory and has committed to bring it closer to target. As we get further into the US earnings season, we are seeing that profit margins remain healthy despite inflation.

 – Overall investors seem to be waiting for more visibility, hence relatively low transaction volumes. Lately, we have also been looking into candidates for the L/S Equity Ucits funds, Impact funds and Credit Ucits funds to add to the range. Selection criterias are high and therefore we expect no more than 1 or 2 new asset managers until year end.

April update

– We were back on the road in April. It was great catch-up face to face with clients for presentations and portfolio updates. The war in Ukraine has escalated, sanctions have been imposed, disrupting commodity supplies and creating high volatility in some markets. In this environment, almost all fixed-income segments have lost between 4 – 8% year-to-date. The reasons for this are the forthcoming interest rate hikes and the widening of spreads due to the uncertainties. Despite equities recovering part of their year-to-date losses in March after two consecutive months of notable declines, April is proving to be challenging again with Inflation becoming the number one concern for most investors.

K Women Leader’s tips in Paris with Sophie Javary, Vice-Chairman BNP Paribas CIB EMEA.

K Women Leader’s tips in Paris with Sophie Javary, Vice-Chairman BNP Paribas CIB EMEA.

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