Transcript
There are a couple of points that are worth highlighting given the volatility that we have seen, particularly this week. Firstly, global equity markets have clearly had a degree of profit-taking, given the positive performance notably from the U.S. and the wider technology sector. Any indication of volatility tends to result in a degree of profit-taking.
There are a number of factors that appear to have been responsible for the catalyst and as ever, there is speculation as to which factor was the most important. However, it would be fair to highlight that some of the U.S. economic data seemed to surprise market participants. The U.S. jobless claims were notably higher than expected, and also the PMI data was slightly disappointing. This data resulted in investor enthusiasm to buy bonds over equities, causing bond yields to decline and raising concerns amongst equity investors about whether the U.S. would experience a soft landing or a recession.
The increase in interest rates from the Bank of Japan also seemed to be responsible for the unwind of the so-called carry trade, resulting in greater currency volatility from Latin America through to Asia.
That said, we as investors at Aubrey have experienced many of these incidents over the last 30+ years of our careers. In our opinion, this is exactly a time for cool heads, seasoned investors, step back from the noise of the market and reassess the fundamentals of the companies we are investing in.
One of the casualties of this recent equity market correction has been the technology sector. Clearly many of the large U.S. names dominate the headlines, but this has also been evident among several of the leading players in the Asian-listed technology arena. This has not been a traditional area of focus for the Aubrey AGEM product, but we are well aware of the world-class nature of many of these companies, with industry-leading positions, with excellent returns on their business operations, and also very positive outlook for their growth, coupled with attractive valuations.
We believe that a number of these companies do look to be attractive opportunities, particularly in relation to the current valuations compared to that which we consider over the historic business cycle where these companies have operated. Consequently, we are reviewing the growth opportunities in a number of these names, with a view to considering their inclusion within our portfolio.
Disclaimer
This video has been issued by Aubrey Capital Management Limited which is authorised and regulated in the UK by the Financial Conduct Authority and is registered as an Investment Adviser with the US Securities & Exchange Commission. You should be aware that the regulatory regime applicable in the UK may well be different in your home jurisdiction.
This video has been prepared for information purposes and is not a solicitation, or an offer to buy or sell any security. The information on which the video is based has been obtained from sources that we believe to be reliable, and in good faith, but we have not independently verified such information and no representation or warranty, express or implied, is made as to their accuracy. All expressions of opinion are subject to change without notice. Any comments expressed in this video should not be taken as a recommendation or advice.
Please note that the prices of shares and the income from them can fall as well as rise and you may not get back the amount originally invested. This can be as a result of market movements and of variations in the exchange rates between currencies. Past performance is not a guide to future returns and may not be repeated. Aubrey Capital Management Limited accepts no liability or responsibility whatsoever for any consequential loss of any kind arising out of the use of this video or any part of its contents.
This video does not in any way constitute investment advice or an offer or invitation to deal in securities. Recipients should always seek the advice of a qualified investment professional before making any investment decisions.
