The Mosaic Global Fund made an estimated 0.70% for the month of October.
October has traditionally been a volatile month for stocks over the years, and this year was no different. The volatility was driven by a number of factors; Economic data in the Euro Zone but also in Japan and China has been disappointing. Germany that has been an economic stronghold also saw a surprisingly negative development in its economic data. Adding to that, the uncertainty about Ebola, the threat from ISIS and a potential AQR, asset quality review, for European banks all helped to push stock markets lower.
Mid-month the UK stock market was down as much as 6.5% but recovered to end the month with a modest just over 1% loss. The German stock market had a similar development with almost a 10% intra-month loss mid-month, but recovered and also ended the month down around 1.5% The month showed continued weakening in commodities with Emerging Markets recovering somewhat.
The Mosaic Global Fund entered October with a cautious allocation towards riskier assets and with a larger allocation to bonds; this helped us to create a positive return for the month and to outperform UK stocks for the third consecutive month. Due to the strong recovery and continued strength, especially in US equities, the stock market allocation will be increased again going into November.
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Per-Olov Jansson & the Cardea Investment Team