The VP Blog
A blog about financial markets and the VP investing framework
Early Indicators of SNB Intervention
We previously highlighted the significance of the 1.10 level for EURCHF – a level which would likely trigger intervention from the SNB. The central bank has previously sought to weaken the franc when EURCHF has been below this level and, despite an arguably weaker...
High Dividend Yield Strategies Require Care
Falling yields across the developed market world have posed greater hurdles for investors with yield and income targets. As the spread between bond yields and equity dividend-yields diverge, these investors move up the risk spectrum to meet their targets. As such, we...
Markets Unconvinced of Further Easing by RBNZ
The RBNZ surprised markets by cutting the official cash rate by a greater than expected 50bps, front-running further expected easing from the FOMC, and RBA. Governor Adrian Orr commented that negative rates are “within the realms of possibility”. Despite this clear...
Fed Easing sees Defensive Stocks come out on Top
Over the last five Fed easing cycles consumer staples, healthcare and energy provide the highest average total return above the index one year after the Fed’s first cut. This is not too surprising given that the Fed started cutting as recessions loomed in 2007 and...
Time to Take Profits on UK Miners
UK miners have performed well over the last year, returning 13.4% against the FTSE-All Share’s meagre return of 1.5%. Accelerating iron ore prices this year has driven this outperformance and the top chart illustrates that this relationship holds over long periods. In...
Silver to Continue to Outperform Gold
Low real interest rates and geopolitical uncertainty have helped fuel gold to being the best performing currency this year, returning over 10% against the USD. While we think gold remains a good investment in the current environment, we re-iterate our idea from our...
Consider Sovereign Default Protection
The abrupt shift in G10 monetary policy expectations has not only triggered a substantial repricing of long-end rates, but it has also underpinned a reduction in credit risk-premiums. This is particularly evident for emerging-market sovereign issuers where the cost of...
Early Signs of Greek Rebound
Another new era dawns for Greece after voters rejected the incumbent hard left Syrzia government at the July 7 general election and voted in the centre-right New Democracy. The economy also, finally, appears to be turning a corner. The Greek treasury tapped a 10-year...
Active management most effective in India
Our leading indicators for India continue to fly high, providing a useful lead for Indian equity performance so far this year. Following Modi’s convincing re-election we expect to see a continuation of structural reforms that enhance the productive capacity of India’s...
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