Berenberg Variato

Monthly market comment

Global financial markets performed significantly weaker in September. The month was characterised above all by a sell-off in global bond markets and broad-based losses in equity markets, which were only partially offset by the technology sector. At the same time, oil prices rose sharply once again, weighing more heavily on the markets than in the previous month. The MSCI World index fell by 1.3% in US dollars but rose by 1.1% in euros due to the stronger US dollar. All major equity regions recorded losses, with Europe and the UK performing particularly poorly. At sector level, the technology sector was the sole gainer, whilst interest-rate-sensitive sectors such as property fell particularly sharply. In the government bond markets, yields rose significantly across the entire yield curve. This was driven in particular by concerns over rising government deficits and debt, as well as continued robust economic growth, particularly in the US. Risk aversion was also evident in the credit market. The US dollar appreciated sharply (EUR/USD -2.5%, USD Index +2.0%), whilst gold fell by 6.3% amid renewed concerns over interest rates. In this environment, the Variato managed to limit losses despite the challenging market conditions. This was achieved in particular through balanced diversification across various asset classes and regions, as well as through active hedging of our equity exposure. Within the core portfolio, our gold investment was the main drag on performance, whilst the managed futures strategy and our exposure to a systematic, market-neutral strategy provided support. Our thematic investments in equities from the technology, cyber security and robotics sectors – including ASML, Keyence Corp. and TSMC – made a positive contribution to performance, whilst our tactical exposure to a global fertiliser producer had a negative impact. Overall, the Variato has continued to maintain its positive performance since the start of the year.