Hard vs. soft landing for the global economy, is the question in our mind – Month in Review: December 2022
Macroeconomic Environment Review
The value of the US dollar has decreased since our last communication in December. Compared to its peak in September, it has dropped 9.8%. The Japanese yen has had the most notable increase, supported by the country’s central bank’s change in its yield curve policy. The British pound has also risen, influenced by a decrease in global risk and relief from financial and political issues. The euro has also improved, rising over 10% against the US dollar, partly due to better-than-expected economic data.
At this time, it appears that the market is currently experiencing a “soft landing” scenario, with decreasing economic activity, falling inflation rates, and indications that monetary tightening is ending. However, there is uncertainty as to whether this trend will continue throughout the year or if a “hard landing” will occur later in the summer. Factors such as the impact of monetary policy and energy prices may contribute to this potential change. Additionally, there is a risk that the Federal Reserve may resume interest rate hikes if the labor market remains strong and inflation does not reach the target level.
Monthly Performance Review
During the month of December 2022, AENAON Syncro Strategies generated the following total returns net of fees:
Across the spectrum of our benchmark indices, our strategies’ performance during December was quite positive. As a comparison, the US S&P 500 equities index lost -5.90%, the Barclay Hedge Fund Index posted a -1.46% decline, the Barclay CTA Index lost -0.10% while the other benchmark indices can be seen on the chart below.
Chart 1: Monthly Performance vs. Benchmark Indices – December 2022
Charts 2, 3 and 4: Inception to Date Performance vs. Benchmark Indices
You can always review our updated factsheets at the following Fundpeak links, with monthly performance updates and statistics since inception: