Fortem Capital Progressive Growth Fund

UK & EU – For professional and institutional investors only
Switzerland – this is an advertising document for professional and institutional clients as defined by the Swiss Financial Services Act only

Monthly Commentary – 30th November2022

There was a month of respite for traditional asset classes across the board in November as US inflation numbers came in below consensus.

The beginning of the month was more uncertain as central banks continued on their hawkish trajectory, with further 75bps rate rises on both sides of The Atlantic. However, sentiment quickly shifted as US inflation came in at 7.7% YoY, giving investors hope that the worst of inflation and therefore tighter conditions were behind them.

Adding to the buoyant mood were developments in China, where unrest seems to have softened Xi Jinping’s stance on zero-covid policy. The problem China has is the lack of vaccinated peoples in the country, particularly the old, and the efficacy of the vaccines that were used. The problem the world may have is the potential for a meaningful Chinese reopening to unleash a further wave of demand and put on hold or even reverse any hopes of a pivot.

The Fund increased by 4.8% over the month.

There were two investments that matured during the month. Both investments called at the end of the third year of their lives, returning 22.0%, a good illustration of how the Fund is able to produce significant positive returns through time even if the underlying equity indices to which it is linked do not. Two new investments were entered into as replacements. Both replacements have increased terms of more than 2% over the investments they replaced as well as being more defensive in their final barriers.

As one might expect given recent moves, the amount of protection currently in the Fund has also increased, whilst the GRY has been maintained as a result of the reinvestments.

The market seems to have taken the latest inflation numbers from the US as the sign needed to expect inflation to fall from here and allow the Fed to pivot earlier than previously expected. As is the norm now, everything must be binary; inflation is either cyclical or structural. The reality is more likely to be that there are both cyclical and structural elements at play, and it is perhaps telling that it was the more cyclical elements of finished goods and autos that drove the number lower last month. Stickier components like shelter and food remain elevated and the structural implications of deglobalisation are likely here to stay. It perhaps makes sense now to lock in some recent gains and add some defined returns, which remain placed to outperform equity in most scenarios.

Total Return 2022 November
UK 100 6,3% 7.8%
US 500 -13.5% 4.7%
Europe 50 -5.5% 9.9%
Japan 225 -1.3% 3.2%
Hong Kong 50 -17.9% 25.3%
US 2000 -14.9% 2.3%
Swiss 30 -11.1% 3.3%
BCOM 17.0% 3.8%
US Treasury -12.6% 3.2%
Euro Property -35.7% 3.1%
PGF -5.3% 4.8%
AGF 0.6% -0.2%
Real Estate -33.1% 2.1%
US Equity Income -13.4% 4.8%


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