Perspectives September Publication

Welcome to the seventh edition of Perspectives. 

Risk assets have been again defying gravity over the last few weeks as the period of higher volatility which usually characterizes the summer has not been observed this year – at least for now. At the time of our writing, the Nasdaq is close its 52 weeks high, many Emerging markets are breaking out and credit spreads are near their tightest level of the year. Other surprises for investors have been the strength of the euro, the 10-year Treasury bond yields hovering at pre-election levels and…bitcoin reaching $5,000. 

So what’s next? There are signs that the long-awaited correction could still happen. Indeed, triggers for a “risk-off” trade have been piling up recently. Among them: the North Korea missile launch over Japan, the U.S. debt ceiling & budget negotiations, the impacts of hurricane Harvey in Houston (4th largest city in the U.S.), the fading of optimistic sentiment in Europe, the worsening of Brexit negotiation, the roll-over of China’s PPI and toppish PMIs around the world.

In this context of higher risk and low interest rates, investors are looking for value, de-correlated returns and yield. The current edition of Perspectives explores some investment opportunities which are expected to bring above average returns with limited risks. This month, we look at Fixed Income through a different angle – EFGAM “Wealthy Nations” approach. We also revisit the investment thesis on global commodities, take a “deep-dive” into a misunderstood industry - Global Aircraft leasing - and have a special focus on the GCC education sector, looking at both private and listed equity opportunities. Last but not least, we continue the discussion initiated at the end of June on Bitcoin by exploring how the Blockchain could change the real estate market.  

We hope you will enjoy this issue.

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