InvestNow News – 6th August – Salt Funds Management – Salt Long Short Fund Fact Sheet – July 2021
Update by Matthew Goodson, Salt Funds Management – 4th August 2021
Dear Fellow Investor,
The month of July saw a satisfactory performance from the Fund with a return of +0.48%.
It was a funny month for equity markets, which raised more questions than answers for investors. How serious is the Covid-19 delta strain? Is the sharp lift in inflation in most countries transitory or not? Will central banks continue to move at a glacial pace if inflation evidence tightens? How hard will the RBNZ have to go? Will real interest rates become even more negative?
The March quarter CPI came in at a colossal +1.3%. At month’s beginning, if you’d been told that the RBNZ would end its QE early, that we’d see a CPI reading such as this and that NZ 10 year bond yields would proceed to rally from 1.77% to 1.51%, then you would have been put in a straitjacket.
Our over-arching macro view remains very clear. Inflation is rising and only a portion of that is transitory. This will require tighter monetary policy and higher bond yields. In turn, equities overall may churn or even decline rather than continue their remorseless rise. Theoretically, cyclical stocks should do well while quality, growth-at-any-price and there-is-no-alternative stocks should struggle.
The Fund’s net length lifted to 48% but we still performed well on negative days and believe we are well positioned in the events that market drivers change.
Please don’t hesitate to get in touch if you have any queries.
Regards,
Matthew
InvestNow News – 6th August – Salt Funds Management – Salt Long Short Fund Fact Sheet – July 2021
Update by Matthew Goodson, Salt Funds Management – 4th August 2021
Dear Fellow Investor,
The month of July saw a satisfactory performance from the Fund with a return of +0.48%.
It was a funny month for equity markets, which raised more questions than answers for investors. How serious is the Covid-19 delta strain? Is the sharp lift in inflation in most countries transitory or not? Will central banks continue to move at a glacial pace if inflation evidence tightens? How hard will the RBNZ have to go? Will real interest rates become even more negative?
The March quarter CPI came in at a colossal +1.3%. At month’s beginning, if you’d been told that the RBNZ would end its QE early, that we’d see a CPI reading such as this and that NZ 10 year bond yields would proceed to rally from 1.77% to 1.51%, then you would have been put in a straitjacket.
Our over-arching macro view remains very clear. Inflation is rising and only a portion of that is transitory. This will require tighter monetary policy and higher bond yields. In turn, equities overall may churn or even decline rather than continue their remorseless rise. Theoretically, cyclical stocks should do well while quality, growth-at-any-price and there-is-no-alternative stocks should struggle.
The Fund’s net length lifted to 48% but we still performed well on negative days and believe we are well positioned in the events that market drivers change.
Please don’t hesitate to get in touch if you have any queries.
Regards,
Matthew
