The Mosaic Global Fund had a -3.97% return for the month of February.
The US economy, or specifically the unemployment numbers, showed continued strength during the month. This resulted in renewed speculation about a rate hike later this year and sent bonds across the board lower. These trends where somewhat reversed during the second part of the month with Fed Chair Janet Yellen’s testimony to Congress, but still left the bond market down for the month.
The stock market correspondingly regained its strength with many market indices achieving new highs. The crude oil price seems to have, at least temporarily, stopped its decline and is trying to regain some strength. Gold, that recently has shown some signs of recovery had yet another weak month giving back most of the strong gains we saw during January. Interesting to follow in the coming weeks/months will be Emerging Markets. We are already seeing some strong traction in Emerging Market debt and we think that this could be a leading indicator for strong Emerging Market stock markets to come as well.
The Mosaic Global Fund had a difficult month due to our overweight bond markets. Following the weakness in bonds during the month our Trend & Momentum Filters are moving us in the direction of stocks. Interestingly we can see that following the ECB declaration to increase spending in their own quantitative program the non-US stock markets have gained a lot of strength and are now relatively stronger than its US peers. Generally we can also see that small to mid-cap stocks are getting more attention than large caps.
The relative strength of the USD versus most other currencies is of course also making life harder for US enterprises. A potential pause and reversal in the strong USD trend could be a trigger for a stronger US stock market in the coming months. We are also following Emerging Markets with interest since they are generally moving up the latter in regards to relative strength to other asset classes. If this continues we will most likely see some Emerging Market exposure in the portfolio again in the coming months.
Please reach out to us on this email firstname.lastname@example.org, or give us a call on +352 202 033 27, to find out more about the Mosaic Global Fund and how the Fund is managed with our Trend and Momentum Filters. We look forward to speaking with you soon.
To Your Investment Success!
Per-Olov Jansson & the Cardea Investment Team