- During the first quarter of 2021, the Memnon ARP Strategy returned 0.6% gross of fees.
- The reflation theme printed the pulse of markets and weighed on government bonds in developed and emerging countries. ARP managed to generate performance through its active positioning favouring equities, notably in European markets. Commodities also performed well in this context. Our absolute-return strategies (Satellite) completing the Global Macro portfolio (Core) also contributed positively to the performance.
- Reopening economies, governments’ support, massive extra-savings (12% of GDP in the US), population enthusiasm, low inventories laid the ground for inflation overshooting expectations, and for longer than anticipated.
- We continue to favour a scenario of rising equities, government stimulus plans being a powerful support to global markets. At the same time, we keep in mind that equities are at risk should uncontrolled inflation force central banks to a less accommodative path. Hence alternative protective strategies (long VIX) are kept in place to compensate for Bonds’ expected lack of protective power for Equities portfolios in a downmarket triggered by inflationnary fears.
- In the short and mid term, we aim at reinforcing ARP’s inflation proof features: reinforced commodities exposure, wisely picked equity sectors, short positions on ultra-long bonds combined with active trends, Memnon ARP is well equipped to address the upcoming inflationary environment.
MEMNON ARP 1Q21 REPORT