By Andrew Mitchell & Steven Ng
Co-founders and Senior Portfolio Managers
While the ASX reporting season indicated an increasingly sluggish domestic economy, businesses exposed to higher growth offshore markets have flourished.
Dear Fellow Investors,
Welcome to the February 2019 Ophir Letter to Investors – thank you for investing alongside us for the long term.
Month in Review
Equity markets continued their strong positive momentum this month, with risk assets globally benefiting from further supportive central bank commentary and the prospect of additional Chinese stimulus measures. US equities, particularly, continued their incredible run from the depths of their December 2018 lows to now posting the best two-month beginning to a calendar year since 1987. The euphoria embracing the region remains relatively market cap agnostic, with both the mega-cap Dow Jones Industrial index and the US small cap Russell 2000 index both posting eight consecutive weeks of positive gains – an outcome not achieved by each index since 1964 and 19841 respectively.
A cooling in US-China trade tensions combined with increased expectations for further domestic stimulatory measures has ignited an equally impressive turnaround from Chinese equity markets, the CSI 300 Index (tracking the top 300 companies listed on the Shanghai and Shenzen stock exchanges) rising +14.6% for the month. Indeed, the significant price gyrations experienced across the majority of global equity markets through the final quarter of 2018 now seem a distant memory, with the CBOE Volatility Index having now recorded nine straight weeks of declines – its longest continuous weekly regression on record.
Download the full Letter to Investors here.
