Investment Overview and Outlook
Investment Compass gives an insight into the investment decisions of our specialists.
FALCON PERSPECTIVES - APRIL 2012
Investment Overview and Outlook
After a good start into 2012, global equity markets lost momentum in recent weeks. Once again, the European debt crisis has become investor’s main concern as Spanish interest rates rose markedly. In addition, recent US and Chinese economic data have disappointed somewhat. But it should not be overlooked that equity markets performed very strongly from their lows of last year back in fall and some setback is healthy. In fact we believe equities will continue to consolidate during the next few months.
Firstly we are entering a seasonally unfavourable time (“sell in May and go away”) and secondly, we do not see any catalyst at this point in time which could move markets higher. Political risk is increasing, in France (elections) or in the Middle East (Iran). While we could see a repeat of the patterns that we saw in the last two years during summer, we do not think that the correction this time will be as steep. As a reaction of lower equity prices, government bonds of “safe” countries have performed well. But these papers offer very little fundamental value.
The Falcon Gold Equity Fund - A beneficiary of rising gold prices
We expect the macroeconomic environment to remain supportive for gold. Worldwide expansive monetary policies, increasing inflation pressure, sovereign debt risks on both sides of the Atlantic, negative real interest rates, the weak US dollar and elevated economic and political uncertainties are some of the supporting factors. Gold is increasingly recognized as an alternative to paper money. The Falcon Gold Equity Fund is well positioned to capture these positive trends. The Fund has performed very well in recent years, both in absolute terms and compared to its benchmark, the Financial Times Gold Mines Index.
Falcon Gold Equity Fund