September, 2023
Global equities were negative in September (-3.8%) with information technology, consumer discretionary, utilities and industrials sectors weighing on markets whilst energy, financials, healthcare and communication services outperformed. US equities underperformed (-4.4%) despite inflation data cooling, as the market digested a higher-for-longer rates scenario following hawkish messaging from the Federal Open Market Committee. Economic headwinds were further compounded by a stronger US dollar, and an OPEC+ production cut that led to higher oil prices. European equities were similarly lower (-3.6%), however were assisted by a weaker Euro, more supportive policy and economic data from China.
Asian equities outperformed broader global markets over the month (-2.1%). Chinese equities performed in line with the region and outperformed most developed markets (-2.1%), buoyed by more supportive policy and positive inflections in macroeconomic data despite ongoing concerns around the property sector. Japanese equities outperformed both regionally and globally (-1.8%) as the Bank of Japan continued monetary policy easing.
Elsewhere, Brent Crude (+9.7% in USD) was strong from OPEC+ production cuts, Gold (-4.7%) was weak, whilst the US Dollar (+2.5%) strengthened.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/Antipodes-Emerging-Markets-Fund-Monthly-Update-6.pdfAugust, 2023
Global equities were negative in August in USD terms, however higher in AUD/NZD due to exchange rate impacts (-2.8% in USD, +1.1% in AUD, +1.6% in NZD). Over the month, energy, healthcare and information technology outperformed whilst utilities, materials and financials underperformed.
US equities outperformed (-1.7% in USD, +2.2% in AUD, +2.7% in NZD), however were impacted by Fitch downgrading the US’ sovereign credit rating which curbed sentiment. Overall, macroeconomic data was dovish as the Fed shifted to a more neutral tone, with the market increasingly pricing in an end to the Fed’s hiking cycle, although also acknowledging the likelihood that rates would stay higher for longer.
European equities underperformed (-4.0% in USD, -0.1% in AUD, +0.4% in NZD) impacted by weakening macroeconomic data and sticky inflation as the market began to price in an increasingly likely stagflation scenario. Weaker Chinese data also impacted sentiment towards European equities.
Asian equities were lower (-4.9% in USD, -1.1% in AUD, -0.6% in NZD) over the month with underperformance led by Chinese equities (-8.6% in USD, -4.9% in AUD, -4.5% in NZD). Weakness in sentiment continued, with fresh default concern within the property sector and macroeconomic data continuing to underwhelm the market over the month. Japanese equities outperformed (-2.4% in USD, +1.5% in AUD, +2.0% in NZD) following stronger macroeconomic data despite growing inflation concerns. Elsewhere, Brent Crude (+1.5% in USD) was higher amid production cut speculation, Gold (-1.3%) was lower, whilst the US Dollar (+1.7%) was stronger.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/Antipodes-Emerging-Markets-Fund-Monthly-Update-5.pdfJuly, 2023
Global equities were higher in July (+2.4%) despite a number of central banks hiking, albeit amidst a dovish shift in tone. Energy, communication services and materials sectors outperformed whilst healthcare, utilities and consumer staples underperformed. US equities were higher (+2.2%) supported by cooling inflation data, despite mixed growth and productivity data. The Fed hiked in line with expectations, with a notable dovish shift in tone to being more data dependant going forward.
European equities slightly underperformed (+1.8%) with economic data weakening and core inflation data remaining sticky. The ECB hiked as expected, however similarly to their US counterparts, promoted a more dovish tone.
Asian equities outperformed (+3.7%). Led by Chinese equities (+7.7%) as the Politburo outlined their commitment to the economy, most notably the property sector.
Whilst more supportive policies have been announced, sentiment remains somewhat muted as the market awaits more substantial stimulus. Japanese equities underperformed broader markets (+1.8%) as the Bank of Japan announced a tweak to its Yield Curve Control policy, declaring greater flexibility will be allowed on the yield before they step into the market to defend it.
Elsewhere, Brent Crude (+14.2% in USD) was stronger, Gold (+2.4%) was up, whilst the US Dollar (-1.0%) was slightly weaker.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/Antipodes-Emerging-Markets-Fund-Monthly-Update-4.pdfJune, 2023
Global equities were higher in June (+2.9%) with consumer discretionary, industrials and materials sectors outperforming whilst utilities, healthcare and communication services underperformed.
US equities outperformed (+3.7%) with the Fed pausing hiking for the first time in 15 months, however not without hawkish messaging indicating the potential for further hikes in 2023. Subsequently the yield curve repriced, removing some previously predicted rate cuts. Overall US Economic data has been weakening, however key sectors including services and non-residential construction continue to remain resilient.
European equities were higher (+1.9%) though were impacted by China’s economic reopening data failing to meet expectations. The European Central Bank hiked as expected, whilst the Bank of England and Norges Bank surprised markets with 50bp hikes rather than the anticipated 25bp. Hawkish rhetoric continued within the region, with core CPI remaining sticky and the market pricing in an increased probability of a UK recession.
Asian equities underperformed broader markets (+0.4%) over the month. Chinese equities lagged (-1.0%) with several economic data points failing to meet expectations. The PBOC provided further support through additional policy loosening, however this fell short of market expectations. Japanese equities were higher (+1.2%) with the currency remaining week due continued BOJ yield curve control despite core inflation increasing gradually, albeit at levels below other developed economies.
Elsewhere, Brent Crude (+3.1% in USD) was up from output cuts, Gold (-2.2%) was down, whilst the US Dollar (-1.4%) was weaker.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/Antipodes-Emerging-Markets-Fund-Monthly-Update-3.pdfMay, 2023
Global equities were down in USD over the month, however higher in AUD/NZD due to exchange rate impacts (+1.0%) with information technology, communication services and consumer discretionary outperforming whilst energy, materials and consumer staples underperformed. US equities were up (+2.7%) driven by a narrow subset of technology stocks. National politics dominated the headlines, highlighted by the US budget debt ceiling negotiations, with a deal finalised in early June. Whilst the focus on US regional banks subsided, the Fed hiked interest rates as expected, though signalled an increased chance of a pause in June. European equities underperformed (-3.9%) largely led by the UK. In addition, commodity prices and China exposed sectors also saw dampened sentiment. The European Central Bank and the Bank of England both hiked rates as expected with the inflation combatting narrative remaining.
Asian equities outperformed broader markets over the month (+1.6%). Chinese equities were weak (-6.0%) with macroeconomic data disappointing and the property market continuing to weigh on sentiment. Japanese equities outperformed globally and regionally (+4.0%) with strong macroeconomic data and continued easing from the Bank of Japan.
Elsewhere, Brent Crude (-8.7% in USD) was weak, Gold (-1.4%) was down, whilst the US Dollar (+2.6%) was up.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/Antipodes-Emerging-Markets-Fund-Monthly-Update-2.pdfApril, 2023
Global equities were up in April (+2.8%) with energy, consumer staples and healthcare outperforming whilst consumer discretionary, information technology and materials underperformed. US equities were higher over the month (+2.6%) with the release of strong purchasing managers’ index (PMI) data, this is despite other prints highlighting broader weakness. Core inflation remained sticky, despite signs of easing, most notably within energy and within the labour market. The regional banking system and uncertainty on the US budget debt ceiling also continued to cause concern. European equities outperformed broader markets (+5.6%) showing resilience despite weaker manufacturing data, with inflation again lower at the headline level as energy pressures eased.
Asian equities underperformed (+0.1%). Chinese equities underperformed globally and regionally (-2.6%) despite solid GDP data, with broader macro data including unemployment and industrial production disappointing relative to reopening expectations. Japanese equities were higher (+1.7%) as the Bank of Japan (BoJ) transitioned governor, with the BoJ maintaining its monetary policy stance, despite announcing a policy review.
Elsewhere, Brent Crude (-0.3% in USD) was slightly lower supported by an OPEC+ output cut, Gold (+1.1%) was up, whilst the US Dollar (-0.8%) was weaker.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/Antipodes-Emerging-Markets-Fund-Monthly-Update-1-1.pdfMarch, 2023
Global equities were up in March (+3.8%) with information technology, communication services and utilities outperforming whilst financials, energy and materials underperformed. US equities outperformed broader markets (+4.2%) despite concerns from the Silicon Valley Bank collapse. The Federal Reserve still hiked rates amongst concerns, although accompanied by a more dovish rhetoric as macroeconomic data weakened further. European equities underperformed (+3.1%) impacted by the Credit Suisse takeover over by UBS fuelling wider concerns around the banking sector. The ECB, Bank of England and Swiss National Bank all hiked rates as expected.
Asian equities also outperformed broader markets over the month (+4.4% in AUD) with limited impact from US and European banking sector concerns. Chinese equities underperformed (+3.3%) despite the PBOC cutting the reserve requirement ratio for the first time in 2023 in an effort to further aid recovery. Large technology companies rallied on the government’s show of support for the platform economy over the month.
Japanese equities outperformed (4.7%) as core inflation data rose, with the BOJ continuing its yield curve control policy at least until the end of Kuroda’s tenure. Elsewhere, Brent Crude (-4.9% in USD) was lower, Gold (+7.8%) was strong as a safe haven, whilst the US Dollar (-2.3%) was weaker.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/Antipodes-Emerging-Markets-Fund-Monthly-Update-1.pdfFebruary, 2023
Global equities were down in USD over the month, however higher in AUD/NZD due to exchange rate impacts (+1.5%), with information technology, industrials and financials outperforming and materials, utilities and communication services underperformed.
US equities outperformed broader global equities (+1.9%) with the month beginning with expectations that central banks were nearing the end of the hiking cycle. Resilient economic data, however, caused this narrative to shift, pricing in higher peak interest rates across developed economies, with yields moving higher and equities moving lower. European equities outperformed (+3.8%) despite evidence of strong macroeconomic data and repricing of future central bank rate decisions. The region benefitted from further falls in gas prices, discussions of decarbonisation funding stimulus and flow-on benefits from re-opening in China.
Asian equities underperformed broader markets over the month (-1.5%). Chinese equities were down (-3.7%) as a result of increasing geopolitical tensions and some profit taking after the recent rally. Japanese equities underperformed (+0.5%) as a surprise candidate emerged to lead the Bank of Japan, with the view that monetary policy tightening may be increasingly likely.
Elsewhere, Brent Crude (-2.3% in USD) was lower, Gold (-5.3%) was weak, whilst the US Dollar (+2.7%) was stronger.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/Antipodes-Emerging-Markets-Fund-Monthly-Update.pdfJanuary, 2023
Global equities were up in January 2023 (+3.1%) with consumer discretionary, communication services and information technology sectors outperforming whilst healthcare, utilities and consumer staples underperformed.
US equities were higher (+2.5%) as economic data suggested a slowing economy, cooling inflation and a resilient labour market. Markets reacted positively to the increased chance of an economic soft landing, despite US government debt ceiling issues and political debate.
European equities outperformed (+4.6%) helped by China’s reopening, cooling inflation and GDP data indicating the Eurozone avoided a technical recession in Q4 2022. Further, markets responded positively to Eurozone manufacturing PMI data and fading energy crisis concerns.
Asian equities finished higher over the month (+3.5%). Chinese equities advanced (+6.9%) as China’s reopening continued following the government’s pivot from its Covid zero policy. Japanese equities were up (+2.2%) supported by strong industrial production and retail sales data, despite rising inflation data.
Elsewhere, Brent Crude (-1.7% in USD) was lower, Gold (+5.7%) was stronger, whilst the US Dollar (-1.4%) weakened.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/Antipodes-Asia-Fund-Monthly-Update-17.pdfDecember, 2022
Global equities were down in December (-5.1%) with utilities, healthcare and consumer staples outperforming whilst information technology, consumer discretionary and communication services underperformed.
US equities underperformed (-7.1%) as the Federal Reserve hiked rates once again and continued its hawkish stance. Economic data continued to show a tight labour market, slowing economic growth and possible inflation cooling.
European equities outperformed broader global markets over the month (-1.2%) as key central banks continued to hike rates. The ECB maintained its hawkish tone, despite data showing better than feared economic activity and inflation cooling. Concerns around energy further faded due to strong stockpiles, mild winter weather and energy price caps.
Asian equities outperformed on a relative basis (-1.3%). Chinese equities performed strongly (+2.7%) as COVID-19 restrictions were further relaxed, and additional easing was indicated in a continuation of the significant pivot in policy stance. Japanese equities also outperformed (-1.0%) as the Bank of Japan made an unexpected adjustment and tightened policy using their Yield Curve Control, as inflationary pressures gradually build.
Elsewhere, Brent Crude (+0.6% in USD) was relatively unchanged, Gold (+3.1%) rallied, whilst the US Dollar (-2.3%) weakened.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/Antipodes-Asia-Fund-Monthly-Update-15.pdfNovember, 2022
Global equities were higher in November (+2.9%) with materials, industrials and financials outperforming whilst energy, healthcare, information technology and consumer discretionary underperformed.
US equities underperformed broader global markets (+0.6%) despite the Fed hiking in line with consensus, as expectation for future hikes softened following slightly weaker CPI and slowing economic data. European equities outperformed (+6.3%) despite the ECB and Bank of England hiking in line with expectations, with concerns relating to natural gas stores subsiding and further details on fiscal support addressing energy shortages released.
Asian equities were strong over the month (+10.2%), particularly Chinese equities (+15.8%) following the announcement of policy changes relaxing COVID-zero restrictions, with further easing expected. Positive sentiment in China was furthered by the Peoples Bank of China easing monetary policy and the announcement of further support for the property sector. Japanese equities were higher (+4.7%) as the Bank of Japan continued loose monetary policy while defending the Yen, this is despite signs of inflation marginally increasing.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/Antipodes-Asia-Fund-Monthly-Update-14.pdfOctober, 2022
Global equities were higher in October (+6.6%) with Energy, Industrials and Healthcare outperforming whilst Communication Services, Consumer Discretionary and Utilities underperformed. US equities were the strongest performing market over the month (+8.5%), as hopes for a Fed pivot grew as economic data showed material slowing even whilst the labour market remained strong and CPI data remained elevated.
European equities also outperformed (+7.8%) as governments announced more detailed fiscal support to address energy concerns and natural gas stockpiles continued to grow amid milder weather. Similarly, policy pivot expectations grew in light of heightened market expectations for a likely recession in the region.
Asian equities underperformed broader global markets over the month (-2.3%). Chinese equities were weak (-13.1%) in light of continued COVID-zero lockdowns and the negativity around the 20th Party Congress announcements and formation of President Xi’s Politburo. This was exacerbated by poor economic data and heightened concerns around the property sector, which furthered negative sentiment. Japanese equities were positive (+3.5%) as the Bank of Japan continued their loose monetary policy amid low inflation, despite the Ministry of Finance once again intervening to support the Yen.
Elsewhere, Brent Crude (+11.1% in USD) was strong with OPEC+ output cuts, Gold (-1.6%) was down, whilst the US Dollar (-0.5%) was down marginally. Elsewhere, Brent Crude (-8.8% in USD) was weak, Gold (-3.0%) was down, whilst the US Dollar (+3.1%) was up.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/Antipodes-Asia-Fund-Monthly-Update-13.pdfSeptember, 2022
Global equities were down in September (-3.6%) with Healthcare, Consumer Staples and Financials outperforming whilst Information Technology, Communication Services and Utilities underperformed.
US equities were down (-3.3%) the Fed continued their Hawkish language post the Jackson Hole Economic Symposium and hiked in-line with market expectation. Core inflation data exceeded expectation, with sentiment remaining depressed as the labour market remained tight and consumer confidence dropped close to lows. European equities outperformed broader markets (-2.6%) with the ECB hiking in-line with expectation, as inflation data reached new highs. However, the discussion of energy price caps and the reporting of high natural gas stockpiles heading into the European winter provided some relief. The new UK government's fiscal policy implied budgetary deficit caused a seismic crash in UK debt, with the Pound Sterling weakening severely. This required the Bank of England to step in with short term QE to stabilise the situation shortly after increasing rates. While in Italy, the election outcome saw the right-wing coalition emerge victorious, with Giorgia Meloni set to become the next prime minister of Italy.
Asian equities underperformed (-6.1%). Chinese equities further underperformed the broader market (-6.4%) with a continuation of Covid-zero policy, weak economic data, and the property sector dragging sentiment despite ongoing support announcements. Japanese equities underperformed broader global markets (-4.4%) as the Bank of Japan maintained divergent loose monetary policy, while the Ministry of Finance intervened to strengthen the Yen. Elsewhere, Brent Crude (-8.8% in USD) was weak, Gold (-3.0%) was down, whilst the US Dollar (+3.1%) was up.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/Antipodes-Asia-Fund-Monthly-Update-12.pdfAugust, 2022
Global equities were down in August (-2.5%) with utilities, financials and energy outperforming whilst healthcare, information technology and industrials underperformed. US equities were also down over the month (-2.2%) as the Federal Reserve sounded a hawkish tone and reiterated its intention to bring inflation under control.
US macroeconomic data showed a slowing economy but less so than feared supported by a strong jobs market, whilst many commodity prices were lower, helping to ease inflation concerns. European equities underperformed (-4.6%) as increasing energy/natural gas prices heading into winter weighed on sentiment, with the European Central Bank sounding a similarly hawkish tone. The Bank of England hiked rates again and reiterated increasingly gloomy economic forecasts.
Asian equities outperformed broader global markets (+0.9%). Chinese equities also outperformed (+0.1%) as the Central Bank and Government continued to offer support, however macroeconomic data failed to inspire the embattled real estate sector and a major drought continuing to act as headwinds. Japanese equities again outperformed but were negative in absolute terms (-0.8%) helped by a weak currency due to the Bank of Japan's dovish path of divergent supportive policy.
Elsewhere, Brent Crude (-5.7% in USD) was weak, Gold (-3.1%) was down, whilst the US Dollar (+2.6%) was up.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/Antipodes-Asia-Fund-Monthly-Update-2-2.pdfJuly, 2022
Global equities were up in July (+5.4%) with Information Technology, Consumer Discretionary and Industrials outperforming whilst Communication Services, Healthcare and Materials underperformed.
US equities outperformed (+7.7%) despite inflation data remaining elevated and more signs of economic slowdown, with equity markets starting to reprice and adjust the chances of a less-hawkish Federal Reserve pivot to being more market supportive, whilst corporate earnings were better than feared. European equities were positive but underperformed the broader market (+3.4%) with the overhang of the Russian gas supply crisis and the collapse of the Italian coalition government forcing early elections. Whilst in the UK, the process of finding a new Prime Minister from the Conservative party commenced after the resignation of Boris Johnson. The ECB made a historic hike while giving more details on their new Transmission Protection Instrument to support weaker sovereign yields.
Asian equities underperformed broader markets over the month (-0.3%). Chinese equities were weak (-9.4%) despite the PBOC announcing further loan stimulus and GDP data surprising on the upside, with zero-COVID restrictions and property sector fears, which included the threat of mortgage strikes, weighing on sentiment. Japanese equities were positive for the month, despite underperforming global markets (+4.2%) whereby the former Prime Minister Shinzo Abe was tragically assassinated.
Elsewhere, Brent Crude (-4.2% in USD) was down, Gold (-2.3%) was lower, whilst the US Dollar (+1.2%) was stronger.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/Antipodes-Asia-Fund-Monthly-Update-1-3.pdfJune, 2022
Global equities were down in June (-4.5%) with healthcare, consumer staples and utilities outperforming whilst materials, energy and information technology underperformed. US equities were down (-4.4%) with headline inflation higher than expected, resulting in the Federal Reserve hiking the funds rate by 75bps, rather than the anticipated 50bps. With macroeconomic data showing signs of an economic slowdown, fears of a hard landing and deeper recession intensified. European equities underperformed broader global markets over the month (-6.1%) with fears of an energy crisis lead recession intensifying in the event of Russia reducing the flow of natural gas into the region. With European inflation data coming in stronger than expected, the ECB reiterated its hawkish tone while introducing supportive measures for sovereign periphery yields. The Bank of England hiked rates again, with the Swiss Reserve Bank and Norwegian central bank, Norges Bank, both hiking rates above market expectation.
Asian equities outperformed (-1.6%). Chinese equities were strong (+12.5%) upon the relaxing of COVID-19 restrictions, complimented by supportive government commentary. Japanese equities were down over the month (-3.9%), driven by low industrial production with the Bank of Japan continuing their yield curve control regime to keep monetary policy loose.
Elsewhere, Brent Crude (-6.5% in USD) was down, Gold (-1.6%) was lower, whilst the US Dollar (+2.9%) was stronger.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/Antipodes-Asia-Fund-Monthly-Update-11.pdfMay, 2022
Despite heightened volatility, global equities were relatively unchanged in May (-0.9%) with energy, utilities and financials outperforming and consumer staples, consumer discretionary and information technology underperforming. US equities underperformed broader markets over the month (-1.2%). The Federal Open Market Committee (FOMC) hiked the federal funds rate by 50bps and further signalled more rate rises are to come, as the FOMC seeks to combat inflation. Whilst the FOMC speakers messaging became more mixed during the month, broader investor fears around economic growth persist. European equities outperformed (-0.2%) over the month, with strong consumer confidence and high inflation data fuelling a more hawkish tone from the European Central Bank and likelihood of a hike in the near future. The Bank of England also lifted rates again in May.
Asian equities also broadly outperformed (-0.1%). Chinese equities outperformed broader Asian and global markets (+0.9%) with continued commentary highlighting assistance from the Government & People's Bank of China (PBOC). Whilst several cities, including Shanghai, spent much of May in lockdown, there was notable easing in restrictions towards the end of the month. Japanese equities also outperformed over the month (+0.7%) while the Bank of Japan continued their diverging policy, with signs of stability in the Yen. Indian equities were weaker (-6.7%) with the Reserve Bank of India announcing an inter-meeting rate hike rising to combat rising inflation. Elsewhere, Brent Crude (+12.4% in USD) was strong, Gold (-3.1%) was down, as was the US Dollar (-1.2%).
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/Antipodes-Asia-Fund-Monthly-Update-10.pdfApril, 2022
Global equities were down in April (-3.1%) with Consumer Staples, Energy and Utilities outperforming and Communication Services, Information Technology and Consumer Discretionary underperforming. The downturn was led by US equities, which underperformed broader global markets (-3.9%). The broader de-risking was in response to a more hawkish stance from the Fed and the view battling inflation remained the focus, despite growth concerns evident in the 1Q22 GDP data. European equities outperformed global markets (-0.4%) taking relief in incumbent French President Macron and his centre party remaining in power.
Asian equities outperformed the wider market (-1.2%) over the month. Chinese equities outperformed global and regional markets (-1.0%) stemming from supportive government rhetoric and indications of easing. This was despite the continued worries relating to COVID-19 restrictions and fresh regional lockdowns. Japan underperformed global and regional markets (-3.6%) as the Bank of Japan continued on a separate path of sustained easing with less of an inflationary pressure to tighten monetary policy.
Elsewhere, Brent Crude (+1.3% in USD) and Gold (-2.1%) were up and the US Dollar (+4.7%) was strong.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/Antipodes-Asia-Fund-Monthly-Update-9.pdfMarch, 2022
Following Russia's invasion of Ukraine, global assets sought safety, with the AUD and NZD’s lower perceived geopolitical risk and rhetoric around central bank tightening leading to a strong appreciation in March (AUD +3.0%), (NZD +2.6%). Global equities rebounded (+2.2% in USD, but -1.3% in AUD) with Energy, Utilities, Healthcare and Materials outperforming, whilst Consumer Staples, Communication Services, Financials and Consumer Discretionary underperformed. US equities outperformed broader global markets (0.0%), maintaining distance from geopolitical risks and reporting strong employment data. European equities underperformed (- 3.5%) due to geopolitical risks and resulting inflation.
Asian equities underperformed broader global markets (-5.3%) with Chinese equities the major underperformer (-11.4%). This stemmed from poor macro data and China’s zero COVID-19 policy resulting in major regional lockdowns. Japan underperformed (-3.9%) as the Yen depreciated and the Bank of Japan indicated the potential to intervene and provide future assistance. Elsewhere, Brent Crude (+6.9% in USD) and Gold (+1.5%) were up and the US Dollar (+1.7%) was strong
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/Antipodes-Asia-Fund-Monthly-Update-8.pdfFebruary, 2022
Global equities were down in February (-5.4%) with Materials, Energy, Utilities and Consumer Staples outperforming, whilst Communication Services, Consumer Discretionary and Information Technology underperformed. US equities underperformed (-5.8%) as fears relating to Russia's invasion of Ukraine took hold. This coincided with concerns earlier in the month that central banks remained acutely focused on managing inflation and the potential this could have on growth. European equities were also down (-5.6%) on similar concerns, with regard to geopolitical tensions and central bank policy.
Relative to global equities, Asian equities outperformed (-4.8%) with Chinese equities also outperforming (-4.1%) with an expansive Manufacturing PMI. Japan also outperformed within the region (-4.0%). Elsewhere, Brent Crude (+10.7% in USD) and Gold (+6.2%) rallied due to geopolitical tensions and the US Dollar (+0.2%) was up.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/Antipodes-Asia-Fund-Monthly-Update-7.pdfJanuary, 2022
Global equities in January were down (-1.9%) with Energy, Financials and Utilities outperforming, whilst Communication Services, Consumer Discretionary and Healthcare lagged. US equities were down (-2.7%) as the Fed conveyed a more hawkish tone than expected with yields rising and flattening, with inflation fears rising and geopolitical tensions increasing. Similarly, European equities were also down (-1.5%) exacerbated further by soaring energy prices in the region.
Asian equities outperformed broader global equities (-0.7%) with Chinese equities underperforming (-2.3%) as a result of from growth concerns, COVID-19 lockdowns and subsequent bottlenecks. This was in addition to ongoing property sector concerns lingering, despite the PBOC conducting further easing. Japan underperformed (-2.0%), reacting to the prospect of higher yields. Elsewhere, Brent Crude (+17.2% in USD) rallied, while Gold (-1.7%) was down and the US Dollar (DXY +0.9%) was up.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/Antipodes-Asia-Fund-Monthly-Update-6.pdfDecember, 2021
Global equities rebounded in December (+1.4%) with Utilities, Consumer Staples, Health Care and Materials outperforming, whilst Consumer Discretionary, Communication Services and Information Technology underperformed. US equities were up (+1.3%) with Omicron restriction fears easing, strong macro data and high inflation data, whilst the Fed continued it's more hawkish messaging. European equities outperformed (+4.0%) also with Omicron restriction fears easing and high inflation data, the ECB announced policy tightening with reduced QE and balance sheet reduction while remaining accommodative.
Asian equities underperformed (-1.0%) led by weak Chinese equities (-4.0%) with ongoing headlines concerning ADR listings and regulation, while the People's Bank of China commenced policy easing. Japan underperformed (-0.6%) with higher inflation and unemployment rising slightly. Elsewhere, Brent Crude (+12.9% in USD) rebounded, while Gold (+3.1%) rose as a safe haven and the US Dollar (DXY -0.3%) was stable
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/Antipodes-Asia-Fund-Monthly-Update-5.pdfNovember, 2021
With the news and uncertainty that followed the new COVID-19 variant, Omicron, global assets went into risk-off mode with USD strong against many currencies including AUD (+5.5%). Against this backdrop, global equities were weak in November (-2.4% in USD, but +3.4% in AUD following the strength in the USD) with Information Technology, Consumer Discretionary and Utilities outperforming, whilst Energy, Financials and Communication Services underperformed.
US equities outperformed in a relative sense (+4.8%) with US Federal Reserve (Fed) policy on track, Fed chair Powell staying on for another term and President Biden’s Build Back Better $1.7t bill gaining political traction. European equities were weak (+0.5%) with some countries announcing the reintroduction of COVID-19 restrictions due to surging rates in the COVID-19 Delta variant.
Asian equities underperformed (+2.4%) with Chinese equities weak (+2.0%) amidst continued regulatory headlines and speculation of the delisting of variable interest entities (VIE). Japan was inline (+3.3%) with growth evident in the macro data.
Elsewhere, Brent Crude (-16.4% in USD) tumbled with Omicron variant fears, while Gold (-0.5%) was slightly down and the US Dollar (DXY +2%) overall was strong.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/Antipodes-Asia-Fund-Monthly-Update-4.pdfOctober, 2021
Global Equities were up in October (+1.1) with Consumer Discretionary, Information Technology, Energy and Financial sectors outperforming, whilst Communications Services, Consumer Staples, Materials and Healthcare underperformed. US equities were strong (+2.9%) with solid corporate earnings, the US Treasury debt ceiling issue kicked into December, and previous worries such as inflation and Chinese regulation and Evergrande contagion dissipating, whilst European equities were up (+0.5%) also on good earnings and dispelled fears, but with a surging Gas price as a headwind. Asian equities were down (-4.2%) with Chinese equities underperforming (-1.2%) with macro data disappointing overall. Japan underperformed (-7.1%) with an election overhang for most of the month.
Elsewhere, Brent Crude (+7.5% in USD) continued to rally, while Gold (+1.5%) was up and the US Dollar (DXY -0.11%) was slightly down.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/Antipodes-Asia-Fund-Monthly-Update-3.pdfSeptember, 2021
September was the worst month of the year to date for Global Equities (-3.0%) with Energy, Financials, Consumer Discretionary and Consumer Staple sectors outperforming, whilst Materials, Utilities, Communication Services and Information Technology underperformed. US equities (-3.6%) and European equities were aligned (-3.7%). Tightening and forecast tightening by central banks, US treasury debt ceiling negotiations, German elections, inflation worries and risks from China all contributed to this weakness. Asian equities outperformed (-0.5%) with Chinese equities down (-1.6%) with worries about Evergrande financial contagion, power cuts and further regulatory worries. Japan was strong (+4.0%) with a new Prime Minister expected to bring expansionary fiscal policy.
Elsewhere, Brent Crude (+9.5% in USD) was rallying again along with the rest of the energy complex due to a squeeze on supply, while Gold (-3.1%) was down and the US Dollar (DXY +1.7%) was strong
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/Antipodes-Asia-Fund-Monthly-Update-2-1.pdfAugust, 2021
Global equities were positive in August (+3.1%) led by Financials, Information Technology, Utilities and the Communication Services sectors, while Materials, Energy and Consumer Discretionary underperformed. US equities (+3.5%) outperformed amidst economic re-opening and the continuation of accommodative stimulus policy from the US Federal Reserve, despite hawkish tones and the prospect of tapering. The wind down of the American Rescue Plan continues, while US Senate Democrats passed $550b in new spending with the Infrastructure Bill. European equities had a positive month (+2.1%) with continued reopening.
Asian equities were positive (+3.2%) with Chinese equities stable (+0.8%) as the government continued but de-escalated their regulatory crackdown. Japan (+3.7%) was strong despite further lockdowns due to a spike in COVID-19 cases and some political instability. India had a very strong August (+11.6%). Elsewhere, Brent Crude (-7.4% in USD) was weak after making recent highs with global economic peak growth fears, while Gold was flat and the US Dollar (DXY +0.5%) was neutral.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/Antipodes-Asia-Fund-Monthly-Update-1-1.pdfJuly, 2021
Global equities were mixed yet still positive in July (+2.8%) led by the Healthcare and Technology sectors, while Energy and Consumer Discretionary underperformed. US equities (+4.5%) outperformed amidst the continuation of friendly policy from the US Federal Reserve despite the continued hawkish tones from some members. European equities had a positive month (+4.0%) as the continent continued to reopen from the pandemic.
Asian equities were down (-3.3%) led by Chinese equities (-9.2%) as the government escalated their regulatory crackdown, especially on the Education sector. Japan (+0.8%) underperformed but was stable despite further lockdowns while hosting the Olympics. Elsewhere, Brent Crude (+1.6% in USD) continued its rally but had a volatile month, while Gold outperformed (+2.5% in USD) and the US Dollar (DXY - 0.3%) was weaker driven by the US macroeconomic backdrop.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/Antipodes-Asia-Fund-Monthly-Update-1.pdfJune, 2021
Global equity strength continued in June (+4.1%) led by the Technology and Energy sectors, while Materials and Financials underperformed. US equities (+5.5%) outperformed amidst the continuation of friendly policy from the US Federal Reserve despite the emergence of more hawkish tones. European equities underperformed (+1.1%) as the continent continued to catch up with its vaccination rollout.
Asian equities were stable (+3.0%) with Japan (+1.7%) underperforming, while Chinese equities were positive despite their continued regulation on internet names and commodity prices (+3.4%).
Elsewhere, Brent Crude (+10.8% in USD) continued its rally, while Gold underperformed (-7.2% in USD) and the US Dollar (DXY +2.9%) was stronger driven by the US macroeconomic backdrop.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/Antipodes-Asia-Fund-Monthly-Update.pdfMay, 2021
Global equities were positive in May as strong US inflationary data was countered with below expected employment data (+1.7%). Cyclical sectors such as Financials, Energy and Materials were strong while Consumer discretionary was the laggard.
Asia (+1.1%) was stable as Japan (+2.5%) outperformed due to an accelerating COVID-19 vaccine rollout program. Chinese equities (+1.8%) were positive despite regulators cracking down on commodity prices, while the People's Bank of China (PBOC) increased FX reserve requirements to control the appreciating Yuan.
US equities (+0.6%) were stable as the cyclical Financials, Energy and Materials sectors lead. Europe (+4.5%) outperformed as the rollout for COVID-19 vaccinations accelerated.
Elsewhere, both Brent Crude (+4.6% in USD) and Gold (+7.8% in USD) continued their rally with the weaker USD (DXY -1.6%).
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/Asia-May-2021-Monthly.pdfMarch, 2021
Global equity strength continued in March on continued optimism of a sustainable re-opening of the global economy (+4.4%). Defensive sectors such as Utilities and Consumer Staples led, but cyclical sectors exposed to the re-opening theme, such as Industrials and Financials, also outperformed. Information Technology and Communication Services lagged as investors exhibited a preference for low multiple - or value - stocks over momentum and growth. US equities (+5.4%) outperformed as President Biden set out plans for a $2tn infrastructure stimulus. The US yield curve steepening continued as yields rose on improving growth expectations (US 10 year rose to 1.74% from 1.40%), weighing on large-cap tech. Asia (+0.4%) lagged due to weakness in China (-4.8%) on concerns around policy tightening and the US regulator implementing measures to delist foreign companies that do not comply with US auditing standards. Reports that China is considering setting up an SOE to oversee customer data and news of the collapse of a large Asia based family office also dampened sentiment. Elsewhere, Brent Crude halted four months of gains (-2.6% in USD) and Gold (-3.4% in USD) retreated as the USD advanced (DXY +2.6%) on the move higher in yields.
The key contributors included:
• Consumer Cyclicals, notably KB Financial, Genting Malaysia and Trip.com. KB Financial was supported by loan growth and improving net interest margins, while Genting Malaysia and Trip.com were the beneficiaries of the ongoing normalisation in travel in a re-opened environment. • Consumer Defensive, supported by Li Ning as the sportswear brand benefitted from a consumer backlash against its foreign competitors, including Nike and Adidas, that announced the prohibition of the sourcing of products from the Xinjian cotton producing region on concerns of potential forced labour.
Key detractors included:
• Online Services - Asia/EM, notably Chinese internet names including JD.com, Tencent and Meituan as market sentiment waned amidst ongoing regulatory scrutiny of Chinese technology platforms. With growth prospects remaining positive we have taken the opportunity to increase position sizes in Tencent and Meituan. • Consumer Defensive name TAL Education after aggressive promotional activity by emerging online tuition operators in China raised concerns that a regulatory response may impact the industry beyond just the bad actors. • Industrials cluster including Longi Green Energy following a period of material outperformance through the Chinese economic recovery
January, 2021
Global equities started the year lower as violent moves in highly shorted retail stocks led to volatility and de-risking in other areas of the market (+0.1% following weakness in the AUD). Whilst some cyclical sectors outperformed, led by Energy and Consumer Discretionary, investors continued to exhibit a preference for momentum and growth over low multiple - or value - stocks, with Communications Services and Healthcare also outperforming. Markets started the month higher as the global roll out of vaccinations and prospects of further fiscal and monetary stimulus outweighed concerns about virus driven restrictions.
Emerging Markets outperformed (+3.7%) led by China (+6.9%) as strong economic momentum on a rebound in global growth and optimism of reduced US/China tensions led to an acceleration of southbound inflows after a period of underperformance. US equities performed in line. A group of heavily shorted stocks in the US rallied strongly as a community of retail investors coordinated a short squeeze, forcing investors to de-gross their portfolios. President Biden continues to push a $1.9tn stimulus package including a $1,400 payment to individuals, supported by a slim Democratic Senate majority following success in the Georgia Senate race. Elsewhere, Brent Crude rallied strongly on demand optimism for a third month (+6.3% in USD) and Gold (-1.3% in USD) retreated.
Key contributors to performance included:
• Online services, including Tencent and Meituan. Tencent has entered into a tech partnership with automaker Geely to develop smart vehicle cockpits and autonomous driving technology while Meituan is emerging as a strong competitor in China's community group buying segment.
• Connectivity/Compute cluster, notably TSMC and MediaTek. TSMC lifted its medium term growth targets due to strong demand for leading edge semiconductor manufacturing in the company's key end markets, particularly high performance compute. TSMC continues to take market share with key customers, reinforcing its dominant position relative to peers. Likewise MediaTek reported a very strong result and strong order flow, underwriting continued earnings growth. Evidence suggests the company continues to close the gap with Tier 1 semiconductor companies and is taking market share in mobile devices, gaming and datacentres.
• Industrials, notably LG Chem, as the company reported material volume growth in its EV batteries division.
Key detractors to performance included:
• Consumer Cyclicals including KB Financial, as performance of financials and travel related exposures consolidated as COVID-19 data deteriorated into 2020 year end.
• Li Ning, Consumer Defensive cluster, following a sustained period of strong performance.
December, 2020
Global equities were strong in the final quarter of 2020 (+14.7% in USD, +6.5% in AUD), closing the year at all-time highs as the US election result, positive COVID-19 vaccine news and the continued fiscal and monetary support from governments and central banks fuelled optimism on the recovery phase of the cycle.
This was despite the pandemic taking a turn for the worse over the quarter, with new infections rising significantly in Europe and the US. Against this backdrop, investors exhibited a bias towards cyclical stocks as economically sensitive sectors such as financials, energy and materials outperformed whilst more defensive sectors such as consumer staples, healthcare and utilities underperformed. There was a stylistic preference for low multiple - or value - stocks over growth and momentum. Concerns over rising COVID-19 cases were offset by the positive trials, and subsequent approval, of the Pfizer/BioNTech, Moderna and AstraZeneca/Oxford (in the UK) vaccines. This led to the market pricing in an economic recovery, fuelling a rally in the beneficiaries of a reopening. Hard-hit value sectors, such as energy, traditional retail, hotels, airlines and financials rallied; while the pandemic winners, such as online retail, health care and home improvement, lagged.
The regions most geared to an economic recovery and hit hardest during the year outperformed, namely Emerging Markets (+19.7% in USD) led by Korea (+38.3% in USD) and supported by a weaker USD, Asia (+17.4% in USD) and Europe (+15.6% in USD). A few major risk hurdles were cleared during the quarter. US equities (+13.0% in USD) lagged as US growth stocks, the key beneficiary of COVID-19, underperformed following positive vaccine news. Joe Biden defeated Donald Trump in the US Presidential election, and the Democrats subsequently secured a ‘blue sweep’ (control of both the White House and Congress) after winning both seats in January’s Georgia Senate run-off election. The passage of another $900b stimulus package by Congress in response to the pandemic includes renewing direct payments to households and more generous employment benefits. The Fed’s continued commitment to easy policy was also supportive.
In Europe, EU governments found a compromise on the seven-year budget after some pushback from Poland and Hungry, paving the way for the €1.8t financial support package to be ratified by the 27 member states. A significant proportion of the budget and recovery fund will be spent on sustainable and green projects after the EU committed to reduce emissions by 55% by 2030, versus 1990 levels. The European Central Bank (ECB) increased the size of its planned asset purchases by €500b to €1,850b, and extended the horizon over which it will make these purchases by nine months. Finally, a Brexit trade deal between the UK and EU was agreed.
Chinese equities (+13.4%) underperformed as US-China tensions escalated after President Trump signed an Executive Order prohibiting US persons from investing in companies with links to the Chinese military. There were also signs that the Chinese government is adopting a more aggressive approach in its dealings with some of the country’s biggest businesses, notably Alibaba, as the Chinese regulator announced policies targeting anticompetitive behaviour. However, these issues were somewhat offset by the relaxation of internal COVID restrictions and the unveiling of the central government's 14th Five Year Plan, which led to optimism over momentum in its economic recovery.
Elsewhere, the USD weakened (DXY -4.2% with the AUD +7.4%) for a third consecutive quarter supporting a rebound in Brent Crude (+22.5%) on the back of an improved demand outlook. The rally in gold paused (flat for the quarter) after eight consecutive quarters of gains.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/Quarterly-Report-APL-Dec-2020.pdfOctober, 2020
Global equities retreated for a second month in October (-0.4%) on a resurgence in COVID-19 cases and risk aversion ahead of the US election. Whilst investors continued to exhibit a slight preference for growth over low multiple - or value - stocks, there was a rotation in the market as Tech underperformed and Financials outperformed. Elsewhere, Consumer Discretionary outperformed, whilst Healthcare and Energy lagged.
Asia broadly outperformed (+3.2%) led by China (+6.9%) as the relaxation of internal COVID restrictions and the unveiling of the central government's 14th Five Year Plan, led to optimism over momentum in its economic recovery. Japan outperformed (+0.4%) after removing the ban on overseas travel.
US equities fell (-0.6%) as the market began to factor in the potential of a Democratic sweep of the House, Senate and the Presidency against a backdrop of continued gridlock on a new fiscal package. Cyclicals outperformed on the potential of more aggressive stimulus under a Blue sweep, while the US technology giants retreated despite posting strong earnings.
Elsewhere, US treasury yields rose sharply on post-election fiscal hopes. Brent Crude continued to fall on continued demand concerns.
-Key contributors to performance included:
• Online Services including Tencent, Alibaba and Meituan. Tencent benefited from recovery in digital advertising and attention on payments businesses with the Ant Group IPO, and Alibaba highlighted ventures in retail and food delivery are moving towards profitability. Meituan posted a strong result as food delivery continues to grow at a robust pace and cost per delivery has fallen, leading to a material increase in profits.
• Consumer Cyclical cluster, notably KB Financial and HDFC Bank, as both reported strong results highlighting ongoing normalisation of their domestic economies. In particular, recovery has gathered pace in India and HDFC has taken market share.
• Consumer Defensive cluster including Wuliangye as sales growth accelerated to high-teens driven by its premium product, and Li Ning reported a turnaround with sales growing mid-single digits driven by ecommerce, outperforming peers. • Connectivity/Compute cluster, notably MediaTek in the lead up to recent results where the company continues to grow in 5G handsets and a diverse range of adjacent products. Key detractors to performance included: • Tongcheng-Elong Holdings (Consumer Cyclical cluster), as the market takes a cautious view on tourism plays despite evidence of greenshoots in domestic Chinese travel. • Shorts, which can act as a headwind in strong upward moving markets.
September, 2020
Global equities retreated (-0.1%, -3.2% in USD), breaking a five-month winning streak on COVID-19 fears and US political uncertainty. Cyclical sectors were mixed as Industrials and Materials outperformed whilst Energy and Financials lagged. Defensive sectors such as Utilities and Consumer Staples were also strong. Asian equities broadly outperformed (+2.6%) led by Japan as Yoshihide Suga was formally appointed as Prime Minister. Existing economic policies are expected to be maintained with potential for further structural reform. Korean equites outperformed (6.4%) as the market saw demand for a series of highprofile, high-growth IPOs. Chinese equites lagged (-0.4%) on elevated USChina tech tensions US equities underperformed (-0.7%) as Democratic Presidential candidate Joe Biden maintained a lead in the polls and negotiations on a new COVID- 19 fiscal relief bill stalled. Elsewhere, Brent Crude fell on demand concerns. The US dollar rallied (DXY +1.9%) on safe-haven demand however Gold fell for a second month. Key contributors to performance included: • Connectivity/compute cluster, including Samsung Electronics and TSMC, as Samsung benefited from a rebound in handset sales while demand for TSMC’s leading edge solutions is stronger than expected. Additionally, both leading incumbent semiconductor companies are expected to benefit from the US restricting China’s access to chips designed/manufactured using US tools, curtailing China’s tech independence and necessitating dependence on the Koreans/Taiwanese. • Online services notably Alibaba, where gross merchandise growth rates have returned to pre-COVID levels and the company continues to take share in online retail sales. New users and engagement continue to grow at a fast clip due to, amongst other things, development of membership programmes, expanded recommendation feed and short form videos. • Li Ning (Consumer Defensive cluster) continues to benefit from secular trends in sportswear as well as an expectation that offline sales have begun to normalise to pre-COVID levels. Key detractors to performance included: • Consumer Defensive cluster including Yili and Yum China following a period of outperformance. Yum China was further impacted by additional capital raised in its Hong Kong listing. • CNOOC (Oil/Natural Gas cluster) which weakened with the oil price
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/Asia-Sept-2020-Monthly.pdfticker: IOF0203AU
commentary_block: Array
factsheet_url:
https://antipodespartners.com/managed-funds/antipodes-asia-fund/
In the Tabs under “Updates & Reports”
release_schedule: Monthly
fund_features:
Antipodes Asia Fund aims to achieve absolute returns in excess of the benchmark over the investment cycle (typically 3-5 years). The Fund will typically have net equity exposure of 50-100%.
- Typically invests in a select number of attractively valued companies listed on Asian share markets (usually a minimum of 30 long holdings).
- The Fund may also invest in companies that are listed: on global share markets and which derive greater than 65% of their revenues from Asia;
- In Japan (permitted to maximum 30% net exposure); and
- In Oceania and non-Asian emerging markets (permitted to maximum 15% net exposure).
manager_contact_details: Array
asset_class: Foreign Equity
asset_category: Long Short
peer_benchmark: Foreign Equity - Long Short Index
broad_market_index: Developed -World Index
structure: Managed Fund