– 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,…).

– 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.

– 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.

– 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.

– 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.

– February was a volatile month for equities amid rising interest rates, inflation worries and the escalation of the Russia-Ukraine conflict. On the Fixed Income side, sentiment has been negative since September, with negative performance figures since the beginning of the year. Nevertheless, history of investing has demonstrated that even if, temporarily, financial markets may be influenced by external events such as the ones currently on display, it is only a matter of time before rationality resumes.

– January was a difficult month. The S&P 500 had its worst week since March 2020 and the Nasdaq its worst month since October 2008. Most equity funds saw their worst monthly performance for a long time. On the bond side, fears of slower growth and higher inflation have weighed on bond markets. The US yield curve flattened as markets anticipated higher interest rates in the near term. However, over the longer term, they priced in weaker growth and inflation numbers.

– 2021 ended as the third consecutive year of strong performance for global equities, underpinned by more than 50% earnings growth, nevertheless it was another roller-coaster year with Covid but we managed some great achievements: 

• Most of the funds (ex Latam and a new launched fund) delivered strong positive returns
• 2 new asset management strategic partnerships
• 5 new funds
• added Fixed Income and Thematics funds to the range
• maintaining 100% work activity during Covid
• pursuing our digital transition with new tools
• increasing significantly the investor base(from large institutions to IFAs & HNWs)
• renewing our commitment to French charity ‘La Chaine de l’Espoir’
• maintaining our efforts with the K Women initiative, thanks to the trust and support of great European leaders

 2022 is looking again full of surprises but thanks to everyone’s commitment, hard work and trust, we are in a great position to further scale K Funds this year.