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Komfie Manalo, Opalesque Asia: Skėnderbeg Funds AGmvK, an investment fund for qualified investors under Liechtenstein law, said, We remain under no illusions that the ample liquidity being provided by central banks has the capacity to continue to push asset prices higher.
However, according to Skėnderbegs latest monthly report, there will always be periods of relative reflection between these spasmodic paper-chasing episodes; the funds goal is to protect capital during periods when valuation does not matter, and generate returns when the allocation of capital enters a slightly more thoughtful phase.
The fund told its investors, "All in all, we remain cautiously positioned, reflecting our view that the high equity valuations are only supported by the current extraordinarily low cost of capital, and not by revenue, margin or cash flow growth prospects in a tepid global economy. Valuation discipline is a key tenet of the investment process of our target funds and many stocks do not offer an acceptable margin of safety at this juncture. The underlying funds portfolio managers will continue to identify and invest in those stocks that do, but they will not feel compelled to chase returns in ever more expensive risk assets."
With many investors currently chasing momentum at any price, shorting overvalued companies has been like trying to push a ball underwater, but a consequence of maintaining investment d...................... To view our full article Click here
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