FMG (EU) Combo Fund +5.0% in the 1st Quarter of 2017
The FMG Combo Fund had yet another strong quarter on the back of a continued, sustained rally in equity markets. Our overweight position in Emerging Markets was once again vindicated as they outperformed Developed Markets for the first 3 months of the year.
As we expected, the three major headline stories (Trump appointment in January, BREXIT officially starting and the Fed raising rates by 25 basis points) were non-events for markets as investors piled into equities in a very clear sign of risk-on mode.
We witnessed a very strong performance in Emerging Markets, with India (+17%), Asia (+12% on average), Mexico and Brazil (+12% each) contributing heavily. The laggard was Russia which, as expected, gave back some of the record returns that we had in 2016. The US once again led the pack in the Developed Markets section and, after some rhetoric, we started seeing very bullish and encouraging signs of how Trump is expected to execute his mandate.
We made no changes to the portfolio in the quarter, and remain fully invested with 60% exposure to Emerging Markets and the balance to Developed Markets.