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Sunday, 7 September 2008

Global Equities - Feeling the Currents

Courtesy of Valerie Wu

Stock markets are moving downwards to a point that we do not know where the floor is anymore!

How are the funds performing these days?

Private Equity – Still holding out strong
CTA/Managed Futures – Made money first half of 2008, we began to see losses in the second half of 2008 when commodity prices slipped
Hedge Funds – Some were trashed, but many have gotten used to the volatility (reluctantly), several have shorted the market in the recent months, so we don’t see them making as much losses as compared to July/August and first quarter of 2008.
Mutual Funds – May God bless them in markets like this

What are investors doing then?

Most of them who have redeemed have already done so either last year or first quarter of 2008, either to hold cash or remodel their portfolio. We see the institutional ones remodeling their portfolios more often than what they have done in the last 2 good years; and the retail clients, the more emotional lot, have either cashed out at the same time or still burning them by speculating or averaging out their portfolios. More are turning to private equity investments and definitely more cautious with their money.

Which sectors to look at in 2009?

Resources and infrastructure were the themes in 2008, but with the recent dip in commodity prices, I personally feel that resources is not going to be very popular; rather, consumer and infrastructure benefitting from the slip in commodity prices. Then again, it depends on what kind of consumer products and infrastructure companies we are looking at, so one note of warning: Please trade with caution.

Would you agree with me?

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