– 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.

– Despite high volatility in Q4 and uncertainty for 2022, most investors remain fairly overweight on Equities. Last month again was a roller coaster. It started well but later in the month, investors’ mood deteriorated following several lockdown announcements across Europe and the discovery of the new variant Omicron. Finally, Jerome Powell spooked markets by turning surprisingly hawkish, stating that inflation was no longer considered transitory and that tapering could happen faster than previously planned.

 – In terms of performance, the funds ended the month in negative territory, most rebounding a week later.

– Omicron is now compromising Q1 2022 roadshows & visits and so joy was short lived as foreign asset managers are moving back to full digital interactions.

– November has been the busiest month YTD in terms of marketing and client interactions on the back of October, which was the best month of the year for many equity markets. We hosted several roadshows. More dates to come although, Covid latest news are a concern.

– We are delighted to announce 2 new exciting partnerships to K Funds. One fund, joining the fund range, is a hydrogen-focused equity ucits fund. The other 2 funds are Fixed Income Ucits funds. These are K Funds’ first Fixed Income funds and we are delighted to expand in this space with such a talented and awarded manager.

– Finally, we will be hosting our next K Women session in Paris on Dec 7^th, as always thanks to the support of some great CEOs & talented leaders in Europe. We are hoping to host sessions in Geneva and Luxembourg early 2022 if Covid situation allows it.