Cantor Fitzgerald Wealth Partners Expands Private Wealth Management Team

  |   For  |  0 Comentarios

Cantor Fitzgerald Wealth Partners, an affiliate of Cantor Fitzgerald & Co. serving the private wealth management market, has announced the expansion of its wealth management team with the appointment of two registered financial advisors, Jeff Schulte and Jim Hiles, previously of Mariner Wealth Advisors.  Messrs Schulte and Hiles bring decades of experience to Cantor Fitzgerald Wealth Partners and will be instrumental in further developing Cantor’s private client group. They will report to Stan Gregor, President and Chief Executive Officer of Cantor Fitzgerald Wealth Partners.

“We believe in listening to the marketplace, and we’ve heard consistently that sophisticated investors are interested in capitalizing on the expertise that Cantor Fitzgerald has long delivered to our institutional clients. The expansion of Cantor’s Wealth Partners platform demonstrates our commitment to providing existing and new clients with best-in class services and offerings, and building our global franchise,” said Shawn P. Matthews, Chief Executive Officer of Cantor Fitzgerald & Co. “Jim and Jeff’s extensive industry experience and breadth of contacts further supports our ability to provide exceptional investment advice to current and future high net worth clients.”

“The focus at Cantor Fitzgerald Wealth Partners is on developing a private wealth management business structured as a true partnership model in which our advisors are equity owners. We provide our private clients access to the same customized services typically reserved for Cantor’s institutional clients,” added Mr. Gregor.  “We will continue to expand the business by adding experienced wealth advisory teams in the coming months.”

Mr. Schulte and Mr. Hiles said in a joint statement, “We are extremely pleased to join such a highly regarded firm as Cantor, and strongly believe that this will be a significant upgrade for our business and our clients. We are confident that Cantor Fitzgerald’s client-focused culture and broad array of resources will enable us to maximize value to our clients.”

Mr. Schulte served as a Senior Financial Consultant for high net worth clients at Mariner Wealth Advisors.  Earlier, he held senior positions at CBIZ Wealth Management and Prudential Securities. He was also a co-founder of eMoney Advisors and Wharton Business Group, an investment advisory firm.  Mr. Schulte holds a B.A. in Economics from the Wharton School of the University of Pennsylvania, and is a Chartered Financial Consultant.

Mr. Hiles served as Senior Wealth Advisor at Mariner Wealth Advisors, and he held a senior position at CBIZ Wealth Management.  Mr. Hiles holds a B.A. in Economics from Bucknell University, and is a Chartered Financial Consultant.

Cantor Fitzgerald Wealth Partners, an affiliate of Cantor Fitzgerald & Co., serves the private wealth market. In addition to its partnership structure, Cantor Fitzgerald Wealth Partners provides its advisors with an expansive suite of products and services, as well as access to Cantor Fitzgerald’s services reserved for Cantor’s large institutional clients.

Cartica Capital Calls on CorpBanca’s Board to Focus on Fundamental Issues of Value and Fairness in the Merger with Itaú

  |   For  |  0 Comentarios

Cartica insiste en que el directorio de CorpBanca erró en la operación de Itaú a favor de Álvaro Saieh y CorpGroup
Photo: Daniel Schwen. Cartica Capital Calls on CorpBanca’s Board to Focus on Fundamental Issues of Value and Fairness in the Merger with Itaú

Cartica Capital, one of the largest minority shareholders of CorpBanca S.A., has sent a letter to the Board of Directors of CorpBanca calling on the Board to focus on the fundamental issues of the value of CorpBanca and the fairness of any transaction to all CorpBanca shareholders, not statements made by CorpGroup and CorpBanca’s management that appear intended to deflect attention from the fundamental issues of value and fairness.

In reiterating its commitment to pursuing this matter, Cartica’s letter also calls the Board’s attention to yet another valuable exclusive benefit for CorpGroup, and highlights why the protection of minority shareholders’ rights is important to the health of Chile’s markets and its economy.

We firmly believe the Board erred in approving a transaction that provides a series of valuable benefits to Álvaro Saieh and CorpGroup at the expense of the minority investors.

The full text of the letter follows:

March 10, 2014

Dear Members of the Board:

We are writing you again to ensure that statements made by CorpGroup and CorpBanca do not divert your attention from the fundamental issues of value and fairness we have raised concerning the proposed CorpBanca – Itaú transaction. Over the past week, CorpGroup and certain members of CorpBanca management have endeavored to focus public discussion on false issues of whether a merger combination without a tender offer is lawful under Chilean law, and whether a combination of CorpBanca and Itaú would result in a stronger bank. These are not the issues we dispute. In fact, we do believe that CorpBanca would be a significantly stronger bank with Itaú or any other respected financial institution in control rather than Álvaro Saieh and CorpGroup, particularly in light of the financial difficulties CorpGroup has reportedly experienced. Similarly, we do not insist that a tender offer is the only way to be fair to all shareholders. There should be no further time lost and no further CorpBanca resources wasted engaging in these false debates.

To be perfectly clear: the fundamental issues the minority shareholders want you to address are value and fairness.

We firmly believe the Board erred in approving a transaction that provides a series of valuable benefits to Álvaro Saieh and CorpGroup at the expense of the minority investors. In addition to the six exclusive and highly valuable benefits cited in our March 3rd letter that will be provided solely to CorpGroup in connection with the transaction, it has been brought to our attention by Chilean minority investors that the limited information included in the hecho esencial and Form 6-K filed by CorpBanca reveal yet another: “a right to sell will be granted to CorpGroup as a way out for its interest in the merged bank”. If this in fact refers to a valuable put option, why wasn’t this benefit extended to all CorpBanca shareholders?

It is incumbent on the Board of CorpBanca to fulfill its legal responsibilities as directors, not shrink from them. Shareholders have every reason to insist that you take immediate action to ensure that the terms of any merger combination: (1) capture the true value of CorpBanca for its shareholders and (2) treat all shareholders equally without providing special private benefits to Álvaro Saieh and CorpGroup.

Everyone with a stake in the Chilean capital markets should fully recognize the broader implications that shareholders’ rights has for a nation’s economy. The members of Cartica’s senior management team have been active in the development of Chile’s capital markets since the late 1980s, both in the private sector and as senior executives of the World Bank’s International Finance Corporation. With this perspective, Cartica believes that all Chileans, not only CorpBanca’s minority shareholders, have a stake in whether the CorpBanca – Itaú transaction is consummated on its current terms. Any transaction, such as the proposed CorpBanca – Itaú merger, that brazenly and unfairly benefits a majority shareholder at the expense of minority investors, damages Chile’s reputation as a safe environment for investment, raising the cost of capital for all issuers, which in turn has consequences for the domestic economy. Accordingly, we fully expect this transaction as currently structured will be the subject of very careful scrutiny by the securities and banking regulators, both locally and internationally.

Just as you should not be confused over what the fundamental issues are, no one should have any doubt about Cartica’s commitment to pursuing this matter. We reiterate that in the absence of prompt actions by the Board of CorpBanca to fully address and satisfy the concerns of minority shareholders, we will act to defend our interests. We will hold CorpBanca’s directors, who are fiduciaries of all shareholders, accountable for any destruction in the value of our investment and that of all minority shareholders.

Sincerely,

Teresa Barger
Senior Managing Director

Oyster Launches an Increased Leverage Version of its Market Neutral Fund

  |   For  |  0 Comentarios

Oyster lanza un fondo UCITS de mayor apalancamiento que su versión market neutral
Photo: I.Barrios & J.Ligero. Oyster Launches an Increased Leverage Version of its Market Neutral Fund

The Swiss banking group SYZ & CO has announced the launch of Oyster Market Neutral Plus, a new sub-fund of Oyster, its Luxembourg UCITS SICAV. The fund is an increased leverage version of the Oyster Market Neutral fund, whose neutral beta long/short strategy has proved itself since it was launched four years ago. Managed by SYZ Asset Management according to the same investment process and with the same diversification and non-correlation objectives as the original fund, Oyster Market Neutral Plus offers 2x leverage and targets a return of LIBOR +10%. 


With a target return of LIBOR +10% a year over a full cycle, Oyster Market Neutral Plus aims to achieve a performance twice as high as the original strategy. To do so, it uses twice as much leverage, which means that the portfolio’s exposure may vary from 100% to 400%. Volatility target limits will be 12%, instead of 6% for the original fund. Managed according to the same process and by the same team at SYZ Asset Management (Giacomo Picchetto and Stefano Girola), the fund also retains the same portfolio diversification and non-correlation objectives as Oyster Market Neutral. 
Since it was launched in August 2009, this fund has obtained some very good results, and ranks in the Top 25% of its category over 3 years and since the beginning of 2014, and in the Top 10% over two years.

Apart from Luxembourg, the sub-fund is already registered in the United Kingdom, Belgium, the Netherlands, Germany, Austria, Spain, Italy and Sweden. It should soon be registered in France and Switzerland. 
“With interest rates in Europe offering mediocre returns, the original fund is aimed mainly at conservative investors looking for a substitute for their bond investments. The double-leverage version will be attractive to investors wishing to invest in the equity market while limiting directional bias,” explained Xavier Guillon, CEO of Oyster Funds. 


A strategy centred on anticipating revisions to corporate earnings 


The strategy developed by SYZ Asset Management aims at taking advantage – in both rising and falling markets – of price inefficiencies in European equities, while maintaining equity market exposure as near as possible to zero. Alpha generation is extracted by anticipating revisions to corporate earnings forecasts since consensus estimates suffer from structural biases that can be exploited. Indeed, analysts have a tendency to “fall in love” with the companies they monitor and, what is more, are afraid of harming their relationship with company management by being too aggressive. They therefore tend to adjust their figures after publication of earnings results instead of genuinely anticipating them.

In addition, even in the case of a reversal in the economic cycle, companies tend to remain set in their tracks until their budgets are next reviewed. Finally, the reduction in the number of analysts for economic reasons has led to under-coverage of companies, in particular among small and mid caps, which increases inefficiencies. 
A sound network of contacts within companies together with proprietary, multi-factor filters then serve as a basis for a bottom-up investment approach and genuine fundamental analysis. The fund does not use complex structured products and restricts itself to long/short positions in European equities.

MexDer Announces the Launch of a New 10-Year M Bono Future Contract

  |   For  |  0 Comentarios

El Mercado Mexicano de Derivados lista un nuevo bono del Gobierno a 10 años
Photo: Fcb981. MexDer Announces the Launch of a New 10-Year M Bono Future Contract

The Mexican Derivatives Exchange (MexDer) has announced the launch of a new instrument, the 10-Year Federal Government Bonds Futures (Bond M241205). The Specific Bond Future is an innovative product that has the most liquid Bond in the Mexican fixed income market as underlying, with approximately 25% of the total daily volumen.

This Futures contract is an ideal instrument for institutional investors to optimize portfolios that are looking for exposure in the attractive Mexican Bond market. Among other key benefits the investors will know at any time which bond will be received upon delivery at maturity.

In addition it complements the hedging alternatives that the Mexican and foreign investors can find in MexDer; it is the perfect hedging tool for the Bonds traded in the spot market -both have the same sensitivity- plus the arbitrage opportunity it provides against the Treasury Bond Market. Furthermore this contract allows high leverage, creation of short positions and an efficient capital use, a relevant factor worldwide to maximize returns with less market and counterpart risks, since all the trades are cleared in Asigna, the “AAA” Central Counterpart of MexDer.

“Besides the benefits for the local market: Banks, Brokerage Houses, Pension Funds (Afores), Mutual Funds and other institutional investors, the launch of this product is quite attractive for the International participants as well”, said Jorge Alegria, CEO of MexDer, “since 50% of the underlying asset is in foreign hands. Therefore the 10-year M Bond Future will be a very useful hedging and investment tool for them, which will attract new participants to MexDer”, he added.

This contract will be available through MexDer Trading Members, through Clearing Members and through the order routing agreement with CME Group via Globex.

Avenida Capital Closes Fundraising of Avenida Colombia Real Estate Fund I

  |   For  |  0 Comentarios

Avenida Capital levanta 140 millones de dólares para su Colombia Real Estate Fund I
Photo: Diego Delso. Avenida Capital Closes Fundraising of Avenida Colombia Real Estate Fund I

Avenida Capital, the Latin American real estate investment firm with offices in Bogota and New York, has announced that it successfully completed its inaugural fundraising effort for its Avenida Colombia Real Estate Fund I.

A total of USD $140 million was raised from pension funds, foundations and institutions in the United States, Canada, Europe and Latin America, with the fund closing above its initial target amount.  The fund primarily invests in the development of retail and residential projects across Colombia. 

“We are very pleased with the quality of the global real estate investors that chose to invest with us in CREF I.  I believe they recognized the strength of our team and valued our ability to select attractive investment opportunities in the main and secondary cities,” said Alexander Chalmers, Managing Director at Avenida, who led the fundraising effort.  “Colombia’s economy continues to grow at a steady pace, and we believe we are well positioned to capture the market opportunity with our local partner relationships.”

“With five cities over one million people and over 25 cities with a population greater than 250,000, we believe the country has capacity for investment well into the future,” said Michael Teich, Managing Director and Founder of Avenida. “The emerging middle class is driving increased consumption for retail goods as well as demand for new housing and we are seeing great opportunities for investment as a result.”

To date, the fund has invested in ten projects in nine different cities across the country. The closing makes Avenida one of the largest independent real estate fund managers in Colombia.

The Peripheral Party is Not Over Yet

  |   For  |  0 Comentarios

Despite the impressive tightening of peripheral government bond spreads, ING IM still like this asset class. Thay have even added to their overweight position recently. They also have a preference for peripheral equity markets, as they expect them to outperform the broader market as peripheral economic data improve further.

The market correction in January has already shown that EM turmoil itself is not enough to create significant uncertainty in the periphery, even though some countries have both a trade and financial exposure to the emerging world. Spain for instance is particularly vulnerable to shocks in Latin America.

Italian and Spanish spreads hardly affected during sell-off

Peripheral government bonds have held up well

During the emerging market (EM)-driven financial market turmoil of a few weeks ago, not only EM assets came under pressure. Also risky assets in developed market (DM) space were confronted with a sell-off. For instance, spreads of High Yield credits widened. One category that held up quite well during the correction were government bonds of the peripheral Eurozone countries. The chart shows the very limited spread widening that took place for Italian and Spanish 10-year bonds (over German 10-year bonds) during this phase of increased market volatility.

Peripheral equities expected to catch up

Next to peripheral debt, ING IM also has a positive view on peripheral equity markets. “Despite strong performances in the past twelve months, peripheral equity markets have not yet caught up with the rapid spread tightening of peripheral bond markets. We expect equity markets to catch up further as peripheral economic data improve. Peripheral equities versus core equities is one of our preferred regional trades for this year”.

It was striking to see – and a nice example of the turnaround in sentiment towards the peripheral countries – that during the recent correction, stock markets of countries like Spain and Portugal acted as defensive ones, while markets of core countries such as Germany, France and the Netherlands suffered bigger losses. One explanation for this could be that big German and Dutch companies with a relatively large share of revenues derived from emerging markets are seen as more vulnerable to turmoil and slowing economic growth in emerging markets.

“In our tactical asset allocation we have an overweight position in European equities, with a preference for the peripheral countries”.

To view the complete story, click the on the attached document.

Banco Santander Chile, First Latin American Bank to Access the Australian Debt Market

  |   For  |  0 Comentarios

Santander Chile, primer banco latinoamericano en emitir un bono en dólares australianos
Photo: NASA. Banco Santander Chile, First Latin American Bank to Access the Australian Debt Market

Banco Santander Chile issued its first “Kangaroo Bond” (bonds issued by a foreign-denominated Australian dollars under Australian Law), which is in turn, the first of a Latin American bank in that format. The issuance was for AUD 125 million, which is equivalent to about  US$ 115 million, with a maturity of 3 years and a coupon rate of 4.5%.

According to Pedro Murua, Manager of Financial Analysis and Structuring at Banco Santander Chile: ” This transactions allows us to continue diversifying our funding base and reflects the fact that investors recognize Chile and Banco Santander Chile, as a safe and reliable place where to invest .”

The joint book runners were Deutsche Bank and Bank of America Merrill Lynch.

Biscayne Capital Hires Former UBS Senior Banker as Managing Director in Its Zurich Office

  |   For  |  0 Comentarios

Biscayne Capital contrata a un ex UBS como managing director en Zúrich
The addition of Christoph Schaer brings to 41 the total number of financial advisors at Biscayne Capital. Biscayne Capital Hires Former UBS Senior Banker as Managing Director in Its Zurich Office

Biscayne Capital has announced the addition of another experienced banker to its burgeoning team of financial advisors. Christoph F. Schaer, a 15-year veteran of the private banking industry in Switzerland and Brazil, joins Biscayne Capital as Managing Director of Biscayne Capital (Switzerland) AG in Zurich.

Prior to joining Biscayne Capital, Christoph was a Managing Director for ultra-high net worth clients at UBS AG for theBrazilian market, where he also served as a member of the Regional Management Committee. Previously, Christoph worked for Credit SuisseGroup in Brazil, where for six years he represented Credit Suisse Group companies vis-à-vis the Brazilian Central Bank. Prior to that, he held positions at JFE Hottinger & Co. and worked for four years at Goldman, Sachs & Co.

“We are excited to have Christoph joiningour team,” said Roberto Cortes, co-founder and CEO of Biscayne Capital.  “He exemplifies the kind of in-depth market knowledge and independent thinking that sets Biscayne Capital apart.”

The addition of Christoph Schaer brings to 41 the total number of financial advisors at Biscayne Capital, which is headquartered in Montevideo, Uruguay and has offices in Zurich, Switzerland and Nassau, Bahamas.  Biscayne Capital currently has over $1 billion in assets under management. It is one of the fastest growing, independent private banking firms in Latin America. 

Christoph is a graduate of the Wharton Business School.  He holds a Master of Law from the University of Pennsylvania Law School and a business/law degree from the University of St. Gallen. Christoph speaks German, French, English, Spanish and Portuguese.

 

 

“China’s Growth Might be Slower, Albeit of Higher Quality and More Sustainable in the Years Ahead”

  |   For  |  0 Comentarios

“Puede que China crezca menos, pero el crecimiento será de mayor calidad y más estable en los años venideros”
Winnie Chwang, Senior Analyst at Matthews Asia. "China’s Growth Might be Slower, Albeit of Higher Quality and More Sustainable in the Years Ahead”

Many consider China the main force behind the future of the global economy. Last year’s Third Plenary Session resulted in very important reforms which the government must implement to shift China from an export oriented economy to a domestic consumption country. This change may lead to slower growth in the future which is, in turn, one of the main issues for most economists regarding 2014. Winnie Chwang, Senior Analyst at Matthews Asia, answers Funds Society’s questions as a preview to her visit to Miami this week, in which she will discuss China as an investment opportunity with institutional and professional investors.

1. China’s growth is slowing – What is behind this lower growth?

China has sustained double-digit economic growth over the last two decades, driven by investments and exports. However, this pace is not likely to be sustainable going forward, and the government acknowledges a transition is taking place within the Chinese economy; where growth will increasingly be led by domestic consumption. It is widely accepted that this transition will translate to more moderated growth, albeit of higher quality, and more sustainable in the years ahead.

2. Where can we find the new sources of growth? What 3 main growth drivers would you highlight for the next 5 years?

At Matthews, we have been focused on the consumption story, which is one that continues to evolve with changing behavior amid rising income levels. The next decade should be no different, and we believe that increased domestic consumption will be a key theme for economic growth. In particular, we highlight consumer growth as the catalyst for a number of service-oriented industries. Three, in particular, are companies operating within tourism, information technology and health care; all of which are expanding on the back of increased consumer demand.

3. Which is, in your view, the most importanteconomic reform approved in the Third Plenary Session, whichtook place last November?

It would be difficult to pinpoint the most significant reform since there were numerous important initiatives that came out of the Third Plenary Session. However, the most important theme is clear—the government wants to continue to encourage a market economy and support the role of the private sector. This translates positively to a more efficient and market-driven economy, whichpromotes increased productivity and profitability for commercial enterprises in the long run.

4. Regarding valuation, where do you see the best pockets of value for the Chinese markets?

In the past two years, the consumer discretionary sector in China has seen meaningful corrections in light of an overall weaker macro economy as well as the initiation of the government’s anti-frugality campaign. As a result, valuations have trended down to a low double-digit level. However, our on-the-ground visits to China lead us to believe that underlying demand remains strong and once the macro sentiment turns, this will be a sector that stands to recover nicely.

One thing to point out here is that as with allour investments, we believe inthe value of bottom-up stock picking. We do not rely solely on valuations in our decision process. We continue to look for the best-run companies with solid business models that are positioned to excel over the long run.

5. What would be the main risk for an investor in Chinese equities?

The main risk for an investor in Chinese equities is policy risk. We tend to stay away from companies that are beholden to government policies, as they tend to change quickly. Instead, we focus on private companies that are able to operate successfully in a competitive market environment.

Certain industries, such as the banking sector, face impending scrutiny due to substantial quality concerns around off balance sheet exposure. We also remain concerned that future reforms for the financial services industry, such as interest rate deregulation, may not benefit these banks. As a result, we are generally cautious and underweight the banks in our portfolio as compared to the benchmark.

6. How important is corporate governance when investing in China?

As long-term investors, we consider corporate governance to be critical when assessing companies. Many of our investments span across three to five years—or longer. So it is important that we are confident that management demonstrates strong stewardship for our investments. Our process assesses the soundness of corporate structures as well as management’s governance ability over time. Our due diligence process emphasizes on-the-ground visits when examining potential investment ideas. We vet information we receive from managers with what we hear from their peers, customers, suppliers or other industry experts. Understanding the entire value chain helps us determine how much weight we can give to what managers tell us and what the true growth prospects are. Overall, we are encouraged to see corporate governance improving in China.

Are Gold and Gold Equities Showing Signs of Recovery?

  |   For  |  0 Comentarios

¿Es un buen momento para invertir en oro?
Photo: Covilha, Flickr, Creative Commons.. Are Gold and Gold Equities Showing Signs of Recovery?

Gold is up 10.5% this year and up 11.9% (1) since it bottomed in December 2013 following the US Federal Reserve’s (Fed) decision to begin tapering its quantitative easing (QE) program. Gold continues to rally despite the Fed announcing after its meeting in January that it will be reducing its QE program by another US$10 billion.

Porfolio managers Bradley George – Head of Commodities and Resources- and Scott Winship –Global Gold strategy-, at Investec Asset Management, answer some questions about the recent recovery of gold, and gold equities.

What has triggered gold’s rally?

We believe that the gold price has rallied because:

  • Tapering has started and the announcement of the tapering program on 18 December 2013 was orchestrated to maintain a stable market environment.
  • Exchange-traded fund (ETF) net outflows have stopped. There are now 56moz in global gold ETFs, and we are starting to see small net inflows.
  • Physical buying continues to be strong out of China — now the world’s largest gold consumer.
  • An article written by Simon Rabinovitch titled ‘China’s 500-tonne gold gap fuels talk of stockpiling’, which was published in the Financial Times on 11 February 2014 (2), also caused some interest.
  • There is talk that India might relax some of the import duties that it implemented in 2013 (they currently stand at 15%) on the back of suggestions that the gold trade is still alive and well, albeit through back channels.
  • US 10 year Treasury rates have moved lower to 2.7% from its starting point of 3% at the beginning of 2014. As illustrated by the chart below, the dislocation between real rates and the gold price is still extreme.
Ampliar

 

  • US economic data in January and February has disappointed relative to expectations; non-farm payrolls, the ISM Manufacturing Index, retail sales and industrial production have all been poor. The obvious excuse is the weather — the US has been hit by snow storms and blizzards — so we will have to wait and see in the coming months if this was the case. With just about every analyst and forecaster expecting stellar US growth this year, better data must materialize.
  • US dollar weakness has also helped the gold price.
  • The precious metal sector has been a key underweight for long only funds and a short for hedge funds. Short covering is definitely occurring.

How are gold equities performing?

Gold equities are finally showing some beta to the upside. Gold equities this year are up 23%, which is just over 2x leverage, and more than the average 1.3-1.5x that we have seen recently. Coming from an undervalued position there was certainly ground to make up. Where we used to quote 30-40% upside for the equities, we now see 15-20%, so we believe there is still value to be had.

Fourth quarter results are currently being announced and the majority of companies are meeting forecasts and guiding positively. Production guidance is more or less in line with estimates, but importantly cost guidance is better. Currency tailwinds and general cutting of a fat cost base has helped return leverage to the bottom line. Capital discipline is much better than it once was.

Is now a good time to invest in gold?

These moves have been rapid, as the above factors have provided a good headwind for the metal. We have moved to $1335/oz in more or less a straight line, so there is an argument for a pause for reflection/correction. But technically gold has broken out (see the chart below) and has room to move. We believe that any retracement is a potential buying opportunity.

Ampliar

Historically gold has offered diversification and inflation hedge benefits, and we believe it still does. The economic recovery, in our view, is finely balanced and there are still significant debt issues and associated risk. In particular, we would point to stubbornly higher oil prices and believe that there will come a time when the world economy is viewed in a less favorable light. Furthermore, the valuation anomaly that exists in gold equities has seldom presented investors with such an opportunity for gold equity exposure. The brief rally we have seen barely registers on the chart below showing gold equities relative to gold bullion.

Ampliar

 

We believe gold companies that are disciplined with capital and focus on growing profitable production, not just ounces at any cost, will be rewarded in the long run. We continue to invest in these types of companies with approximately 30 high conviction holdings in the Investec Global Gold portfolios. The portfolio is further differentiated with its physically backed ETF positions in platinum and palladium. We believe that these metals not only provide diversification but have strong fundamentals as they are in deficit from a supply and demand perspective.