Ayaltis Funds - August 2017 Estimates & Annual Investor Event

 
 
 
 
 
 
 
 
Ayaltis Funds - August 2017 Estimates & Annual Investor Event
 

Dear Investors,

We are pleased to send you the NAVs & Performances for August 2017 with a performance of +0.50% in USD for Class B, bringing the YTD 2017 performance to +4.32%.
 
Please Save the Date:
Our Ayaltis Annual Investor Event will take place on Wednesday, 8 November 2017 in Zurich at Widder Hotel. This year, we are very proud to have as confirmed lead speaker
Anat R. Admati who co-authored the famous book “The Bankers’ New Clothes” with Martin Hellwig. More information will follow in the next days.

 

August  2017 Flash Commentary

Areca Value Discovery continued its upward trend in August despite weak equity markets, with the S&P 500 down -0.5% and the EuroStoxx down -1.3%. This result is particularly encouraging for two important reasons: First, we have immunized our portfolio away from quality-focused relative-value exposures underperforming in this period of indiscriminate yield-seeking momentum bouts, when poorer quality outperforms. Second, we achieved this without compromising our long-term relative-value opportunities on quality, paramount for any eventual market unwind. Be sure of one thing: when a flight-to-quality correction comes, one must be holding high-quality assets.

August brought rising tensions between North Korea and the US with a surprisingly moderate impact on risk-asset classes. High yield bonds dropped with equity markets only to partially recover in the last two days of the month, ending moderately down. After double digit returns in 2016 and a very strong first half in 2017, the high-yield run is slowing down. Twice the usual daily volume was traded in investment grade credit indices: investors rotated their exposures, taking the threat seriously.

Notably, under the moderate calmness of the market’s surface (represented by the index performance), the relative perception of market risk had a more violent adjustment: August witnessed a severe underperformance of companies with weak balance sheets. Furthermore, government bonds enjoyed the strongest rally since US election. All these short-term trends are clear signs of an increasing lack of confidence in the US economy.

Equity volatility, implied and historical, increased during the month, offering opportunities for trading that our discretionary strategies (our main contributors to performance) captured. Systematic relative value managers with a fundamental bias, were supported by the sell-off in risky assets.
We are optimistic that divergence of key market factors is strongly expanding our relative-value opportunity set going forward and we are confident that our portfolio represents a very attractive alternative to over-priced financial markets and a potential shelter from the storm.
 
 
This month’s cut-off date for subscriptions is 22 September 2017 at 3pm.
 
As always, we reiterate our gratitude for your continued trust, support and patience.
 
Kind regards,
Son Nguyen,

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Son Nguyen, CEO & Managing Partner
 
Ayaltis AG
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8002 Zürich
Switzerland
Direct: +41 43 501 37 62
Mobile: +41 78 610 65 00