Mandatum Life Allocation portfolio management – September

Mandatum Life Allocation basket returns were between +3.04 % and +0.03 % in September.

Global economic growth is expected to slow to around +2.9% in 2019 (+3.6% in 2018). However, the likelihood of a global downturn remains low, with the continuation of growth appearing to be a more likely scenario, albeit at a slower pace than in the past few years. Companies’ confidence indices predicting economic activity have weakened further. Confidence is weakest among export companies and industrial. Companies focusing on the domestic market and operating in the services sector show a higher confidence level in both the US and Europe. China’s confidence indices have slightly improved over the past few months, which suggests that the stimulus measures are passing on to the real economy.

Since early summer, we have kept equities moderately underweight. The main reasons for this are 1) a weakening in business confidence indicators, 2) the downward revision of earnings forecasts, 3) trade policy uncertainty. In fixed income investments, the focus is on Nordic corporate bonds, in which we still see good return potential. Due to the low return level, we underweight European government bonds, in particular. We have maintained the interest rate risk at a more moderate level than the market index, in a bid to prepare for potential sudden interest rate surges. In September, we increased investments in high yield bonds and reduced euro-denominated investment grade corporate bonds with a long interest rate risk.

Alternative investments have mitigated the price volatility of the investment portfolios, as we expected them to. We have made an investment commitment in the ML Private Equity Opportunities I investment basket which invests in private equity. The investment basket currently has investments in three companies (Cadmatic, Coronaria and Mitigram) and in three funds (Rocket Internet II, Capricorn and KJK Capital). In addition, the EQT VIII private equity fund, in which we have previously made an investment commitment, made a capital call in September.

Find the reports:
» Mandatum Life Allocation Fixed Income
» Mandatum Life Allocation 25
» Mandatum Life Allocation 50
» Mandatum Life Allocation 80
» Mandatum Life Allocation Equity

 


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