The positive trend for European Equities continued in March. In the first quarter of 2015, a significant divergence between European and US stock markets came to light. Within the last 10 years, such a divergence has not been recorded. At the same time, the Euro had its worst quarter against the US Dollar since its inception in 1999.
Under Strategies we added two Overlays which combine proprietary currency hedges with our market timing. For investors from the respective currency area (Euro or US Dollar), the performance of utilizing the Overlay on a passive investment into the foreign market is shown. For Euro based investors, the annual return from investing into the US equity market over the last eleven years would have nearly doubled. An investor with US Dollar base investing into European Equities had to hedge the currency risk only for a quarter of the time to increase his return significantly. The results for the Emerging Markets are similar.