FondsAnbieter- GAM: Weekly Manager Views

09. September 2015 von um 10:00 Uhr
Wie beurteilen FondsAnbieter ihre Anlagerreigionen ? Wie fällt die Analyse der Kapitalanlagegesellschaften (KAG) über Fundamentaldaten, Währungen und Kapitalflüsse aus? Informationen direkt aus dem Research Centern der FondsBranche finden SJB FondsBlogger in der Kategorie "Anbieter. Berichten."

unabhaengigkeitFondsAnbieter-GAM: Emerging markets have beenSJB Fonds in der Presse the big story of the past few weeks, led by China. The combination of collapsing equity prices, the re-pricing of the renminbi and weak purchasing manager indices data has drawn attention towards the slowdown in Chinese growth rates. This has subsequently knocked commodity prices and the associated export-heavy emerging markets, dragging the wider emerging region down as a whole. Slowing Chinese credit growth is the core story to watch from here.

Our observations of the market suggest there is no particularly ‘new’ news to react to. The slowdown in China is no surprise to anyone, and the approximate 3% re-pricing of the renminbi is relatively modest following a period where the US dollar has appreciated by some 30%. Commodity cycles typically run for several years; with significant new capacity in markets like copper, and the associated marginal cost of production effectively being zero, there is no motivation within the industry to cut production and call a halt to the current price slump.

A notable caveat is that oil is the one commodity that is not driven by China. While the country buys approximately 45% of global iron ore supplies, it only buys 10% of global oil. Russia and Colombia are the key crude-driven markets. Both have performed in line with the broader subset as the oil price has fallen, but could prove profitable shorts if they continue to deteriorate.

We see no reason for emerging market weakness to be a cause of deterioration in the major developed markets. Dow Jones index constituents have a very small exposure to emerging markets; the FTSE 100 is slightly higher, but most major equity benchmarks do not have a direct or indirect emerging market element to them. Similarly, as long as there is no inflation, a rate hike by the Fed should have no adverse effect on emerging markets over and above the current state. Of the past nine hiking cycles, six have been uninfluential for commodity-sensitive currencies, such as the Australian dollar. What will really shape further developments is whether the hike is implemented to tame inflation (negative for EM), or to normalise monetary policy (positive for EM as risk appetite should improve).

Overall, our asset class looks reasonably cheap with nothing obvious on the horizon to prevent it becoming cheaper still in the short-term. In our view, now is good time for medium-term investors to start accumulating exposure.

Our funds have managed to survive the volatility in August relatively unscathed, while other asset classes have been hit quite hard. The portfolios were only down between 0.5% and 0.8% over the month in their respective currencies. Our view is that the overall sell-off was led by worries over corporate earnings, which our holdings are less vulnerable to, especially relative to high-yield debt. Overall, our performance is driven more by the roughly 6% yield that is generated per annum by coupon clipping (50 bps per month) than by outright bond price moves.

August was a fairly busy month in terms of portfolio activity, as we tried to take advantage of bond price declines that we felt were exaggerated. Hence, we added to holdings at more attractive prices, while selling or reducing other positions that had managed to hold up well but were consequently yielding comparatively less.

Examples of trades in August include a 6.6% Royal Bank of Scotland perpetual bond, which we added to. It is callable every month, but has not been called yet as the bank benefits from its regulatory Tier 1 capital status. To finance the purchase, we sold an Indian corporate bond that yielded less following some strong appreciation over the past two years. Another addition was the 5.5% Pershing Square bond of a USD 6 billion closed-end investment trust, which uses the capital raised by a bond issue to purchase liquid securities. But the borrowing is limited to 20% of NAV, which means that we have a very solid buffer protecting this senior bond, maturing in 2022. Its price fell below 99% in August, yielding 5.7%, giving us a good opportunity to add to a favoured position. To raise the funds, we sold AG Insurance following positive performance; the bond now pays under 5%.

The issuance of hybrid bonds by corporates from the non-financial sector is a new and positive trend. It has taken these firms a while to understand the attractiveness of hybrids and the financial advantages they offer, ie they are partly treated as equity by the rating agencies. One recent example is the German airline Lufthansa, which issued a EUR 500 million hybrid bond that offers a coupon of 5.125%. At first glance this sounds expensive, but the cost for Lufthansa to raise equity via a rights issue is much more expensive at 9.4%. On the other hand, issuing regular debt may worry banks and rating agencies. The bond also served as an example of how divergent the performance of stocks and bonds often is: Lufthansa stocks were down more than 10% in August, while our hybrid bond was up 1%. Other companies that have issued hybrids this year include EDF, Total, Volkswagen and Sainsbury.

Another favoured holding is global commodity trader Trafigura. The company is highly profitable and not dependent on high commodity prices, since its business is to buy, sell and transport commodities across the world. We recently spoke to the management, which underpinned our positive view of the company. It beat its quarterly earnings expectations in the first and second quarter of this year and we would expect it to do so again in the third quarter. Hence, we were pleased to be able to purchase some senior bonds yielding more than 7%, and junior debt above 8% during August.

The summer brought very positive news from the banking sector: all systemically important banks in Europe have already reached their Basel III requirements for core tier 1 capital for 2019. Banks also announced very strong earnings, all of which is excellent news for our junior bank debt. We believe that once the dust settles on the current volatility, investors will refocus on the strong fundamentals and attractive yields of our holdings.

To reiterate our overall positioning: we remain positioned for higher interest rates, as we have been for some time. This scenario would benefit our floating rate notes and fixed-to-float bonds, while our high-yielding fixed-rate bonds would prove fairly resilient. If rates remain at current levels, we will be equally content, since we can continue to lock in the around 6% annual yield of our holdings.

Crude oil and metals prices are trading at levels 60% below their historic highs reached in 2008. Commodity prices during the late 1990s to 2008 period witnessed a rally on the back of strong Asian demand, predominantly from China, as the global demand for commodities outstripped supply.

Since 2008, commodity markets have broadly been in a global state of oversupply, especially during the last three years. The prevalent global supply glut is a consequence of booming commodity prices before the onset of the financial crisis, a period when producers began to increase their production capacity because it was profitable. But, as more supply came onto the market, commodity prices gradually fell in response. For agricultural crops, it takes a year to increase production, while for mining, it can take anywhere between five-to-ten years to bring on new capacity. Hence, we continued to see new capacity becoming available at a time when the cycle has turned and prices are falling.

Data analysis clearly suggests that current levels of copper demand are no lower than in 2008. Conversely, it continues to grow, but is now met by much higher supply than previously after producers ramped up output. The majority of commodities still maintain a positive growth trajectory with regards to import levels, even in China. According to July data, a basket of over 20 commodities imported by China jumped by over 20% in volume terms, as measured year-on-year. Therefore, the slowdown in Chinese growth with regards to commodity imports has not materialised in real terms and the absolute level of imports versus one decade ago are strongly higher.

In 2005, China consumed 3.6 million tonnes of copper compared with almost 10 million tonnes in 2015. Meanwhile, China consumed 40 million tonnes of soya beans in 2005 versus 85 million tonnes in 2015. Similarly, China consumed 7 million barrels of oil a day in 2005 compared to 11 million barrels a day this year. Hence, Chinese commodity demand remains robust.

Falling commodity prices have induced some producers to cut their production levels, as is the case with copper miner Freeport. However, the marginal cost of production for a commodity such as copper is a constantly moving target, owing to the oil price. Approximately 20% of copper’s overall cost base is derived from energy prices. Thus, even as copper prices fall, mining producers can remain profitable as long as the crude oil price falls in tandem.

The number of active US shale oil rigs has been slashed by around half this year (year-on-year basis) in response to falling oil prices, yet producers have managed to improve the efficiency of the remaining platforms by 50%. Thus, producers are able to extract roughly the same amount of shale oil now but with fewer rigs. This trend has defied market expectations, in that the shale oil market now produces more than it did a year ago. While commodity investors continue to focus on the dynamics of the shale oil market, OPEC has failed to react to falling oil prices. Saudi Arabia – OPEC’s largest producer member – in fact has increased its production by 500,000 barrels per day in 2015 compared with a year ago, while major producer Iraq is exporting some 700,000 barrels per day more during the same time period. Both of these factors have weighed on crude oil prices.

Falling crude oil prices have helped to stimulate demand, especially in Asia and the US. However, the global supply of oil continues to outweigh that of global demand, hence, the market currently is oversupplied by 3 million barrels a day: a significant amount.

Iranian oil output is likely to return to the market in 2016 as sanctions ease, and in particular, it is likely that this additional production will be imported by Asia. On the low end of expectations, Iran could bring an additional 500,000 barrels of crude oil daily to the global market, while on the upper end of the scale, the country could bring over 1 million barrels a day. The extent to which Iran will add to global oil supplies will be a key driver of price direction for the market in 2016.

Crude oil prices are currently very volatile, experiencing swings sometimes of -/+ 10% in one day. Looking ahead, however, we expect crude oil prices to stabilise around the USD 50 a barrel level. While the break-even price is hard to estimate, we believe it will be hard for shale oil producers to be profitable at USD 55 a barrel, which is the current futures price for December 2017.



Über GAM

GAM wurde 1983 als FondsTochter der UBS gegründet. Von 1999 bis 2005 gehörte die Gesellschaft zum Bankhaus Julius Bär. Seit September 2009 ist GAM selbständig. Fonds: 450. Verwaltetes Vermögen: 36,9 Mrd. Euro. Anzahl der Mitarbeiter: 760. Geschäftsführer: David M. Solo.


Kategorien: Anbieter. Berichten.

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