19-Feb-2019
Perspectives February Publication

Welcome to the 22nd edition of Perspectives.
 
What difference can a month make! In December, risk assets tanked by the most since the global financial crisis in 2008. One month later, the S&P 500 had its strongest January showing since 1987. And all that happened in the midst of the longest U.S. government shutdown in history. Indeed, both developed and emerging market equities gained around 9% last month, boosted by signals from the US Federal Reserve (Fed) that it would be more patient with further rate rises.
 
In this publication, we first discuss whether or not investors should assume that the “Fed Put” is here to stay and how this could lead to a new era of lower volatility. We then step back from short-term market action by taking a “deep dive” into the Endowment investment approach, with a specific focus on the framework developed by David Swensen, the CIO of the Yale Endowment. We show that this highly successful strategy needs some adjustment when applied to small and mid-sized institutions such as Family Offices.

In the second part of this publication, we look at our regional markets. After being the best performing region in 2018, Middle East equity are off to a very decent start this year. In this edition of Perspectives, we look at two interesting developments which are currently taking place in the region. The first one is the wave of Merger & Acquisitions which is shaking the banking sector within the GCC. The second theme is about the National Industrial and Logistics Plan which is part of the Saudi 2030 vision. We continue to believe that our region is on track to reinvent itself, creating vast investment opportunities for astute stock pickers.
 
We hope you will enjoy this issue.

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