QUARTERLY UPDATE & OUTLOOK REAL ASSETS Q2 2020

We just published our latest quarterly update for our Real Assets Investment Strategy

About Real Assets:  A diversified investment strategy that invests in liquid real assets classes such as equities, commodities, inflation-protected bonds, listed globally. The portfolio is allocated between different sectors (Water, Timber, Energy, Gold, Inflation…) that are representative of the underlying macroeconomic trends and benefit from fundamental strengths in demand while having few substitutes and constrained supply.

HIGHLIGHTS FROM THE REPORT AND THE OUTLOOK

“As the COVID-19 outbreak continues to dominate headlines, the global economy entered recession. While various multilateral organizations, such as the IMF, the World Bank and the European Commission are constantly updating their economic forecasts, strategists are expecting a rebound in 2021.

Expectations differ in terms of shape, amplitude and timing, but most probably, divergence will appear across sectors and geographies, as the policy response to the health crisis is lacking global coordination. While the U.S. FED, the ECB, the BOE and PBoC have all pledged almost unlimited support to the economy, budgetary and fiscal stimulus remains more sporadic. Europe took the first step with a EUR 750 billion EU wide support mechanism. The U.S. stimulus package, valued at $2 trillion, while unprecedented in timing and in size, is considered by many as only the first step towards kick-starting a recovery. “

In parallel, some leading indicators such as PMIs and financing conditions are sending encouraging signals. The Citi US Economic Surprises Index rebounded to an all-time high, reflecting the unprecedented level of uncertainty today. The oil-price war came to an end in April after both OPEC and non-OPEC members agreed to reduce their production, helping both WTI and Brent prices to rebound above $40 at quarter-end. Corporate bond issuance surged to above $ 7trillion globally on a year-to-date basis as the liquidity crisis in March and volatility declined across various asset classes.

The numbers and portfolio references mentioned above pertain to the Silk Sustainable Real Assets Fund