This is like having a multi million dollar staff of experts sharing their economic ideas with us. We can create entire lessons from these meetings.
Jyske Global Asset Management recently held a non-scheduled Investment Committee meeting.
They monitor markets continually, however during rapid changes in the market place, they convene extra ordinary meetings to discuss whether a shift in their overall views and positions need to be made.
On 24 July, at the normal Investment Committee meeting, they predicted the present US dollar strength and had incorporated the currency move into the loan portfolio with success by switching from US dollar to euro funding at the 155 level.
Please if you do not understand this or have questions how this can relate to your investments, send me your questions. I’ll give the questions priority if you add BL in the subject line. I cannot give you direct investment advice individually but can answer questions (without disclosing your identity) in these lessons.
JGAM’s shift in their loan structure left the asset side of the portfolios hanging, and when the US dollar started to rise and test the 145 level against the euro, JGAM found it crucial to rebalance the investments.
The US dollar currency move is very linked to the falling commodity complex. Energy prices and precious metals are down almost 20% from their peaks back in mid-July. JGAM decided to sell commodities and commodity linked currencies, in this case NZ dollar denominated bonds, in order to reduce the commodity risk in the portfolios.
After selling NZD-bonds and all commodities, JGAM used the proceeds and free cash to increase US dollar positions by purchasing the following US dollar corporate bonds:
7.2% Porsche Perpetual 01.02.2049 (USD)
6.5% Hutchinson Wham Intl. 13.02.2013 (USD).
This switch has changed the overall asset allocation on all JGAM portfolios. They are now Neutral on the two major asset classes; Bonds and Equities, and have no allocated cash and no positions in the alternative classes.
JGAM followed the same principal in their mutual fund portfolios by selling the commodity basket ETF, using the proceeds and free cash to purchase additional units in the Jyske Invest Dollar Bond fund to increase US dollar exposure.
They still have some exposure to commodities in the equity portfolio, but the overall theme is now risk-diversification and added US dollar exposure.
The next scheduled Investment Committee meeting is on the 25th September 2008.
Please do not hesitate to contact Thomas Fischer at JGAM if you have an account and have questions. His email is firstname.lastname@example.org
Please send me any other questions about how and why JGAM is making these shifts. I’ll give the questions priority if you add BL in the subject line. I cannot give you direct investment advice individually but can answer questions (without disclosing your identity) in these lessons.
Until next lesson, good global investing!
Join me and Thomas Fischer from Jyske Global Asset Management in North Carolina to learn more about economic trends.
We’ll have lunch at the farm and enjoy the leaf change.
This is the most beautiful time of the year on the Blue Ridge.
If you do not subscribe to my free www.garyascott.com ezine you should also look at Jyske Bank’s current Strategic Economic Outlook