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Covering the Blind Side!

Stock markets over the world had a torrid and volatile start to 2016.  Most indices have finished down circa 8% on the month.  

During the month, stocks fluctuated wildly.  Investors panicked when oil went below $30, only to panic again when it went through $35.  Stock markets remain fragile psychologically.
Fears also persisted about Chinese growth, and then world growth.  Concerns about potential US interest rate hikes, the threat of deflation and our old favourite valuations also added to the list.  As the list got bigger the patient became more frenzied.  The truth is, monetary conditions have tightened and that at the expense of repeating ourselves when Central Banks start to take away the punchbowl, the patient gets very irritated.  The removal of stimulus around the world will have to be slow and arduous. 
At the end of the first quarter in 2015, we reduced our equity content in the Appian Value Fund to 35% down from 42%, edging nearer the bottom of our range.  It became apparent to us that some equities were priced to perfection.  At the time of writing, the equity portfolio within the Appian Value Fund pays us 4% income from a group of companies with little or no borrowing. 
Many believe the recent instalment of volatility has been caused by the policy makers, who when dealing with the crisis of the last 20 years have added fuel to the fire by reflating new bubbles.  Cognisant of this volatility, we will always hold a decent portion of cash so that we do not have to rely on the kindness of strangers, when it comes to purchasing opportunities when they arise.  Opportunities are now arising in sectors such as oil, mining and pharmaceuticals for those with cash. 
Elsewhere our property income is expected to be above 5%, our forestry income 4% and our infrastructure plays have started strongly this year.  However, we believe more volatility will persist and we cannot rule out further market weakness.  So although the Appian Value Fund is down 1.9% in January, other income streams will start to come into play over 2016.

Save the Date

The Appian Asset Management Seminar will take place on April 28th
in the Royal College of Physicians, No. 6 Kildare Street, Dublin 2.
The information contained in this material is not financial advice. Nor does it constitute an offer for the purchase or sale of any financial instruments, trading strategy, product or service. No one receiving this material should treat any of its contents as constituting advice. It does not take into account the investment objectives, knowledge, experience or financial situation of any particular person. You should seek advice in the context of your own personal circumstances prior to investing or taking out any product from your own independent adviser.
This material has been prepared and issued by Appian Asset Management Limited on the basis of publicly available information, internally developed data and other sources believed to be reliable. While all reasonable care has been given to the preparation of the information, no warranties or representation, express or implied are given or liability accepted by Appian Asset Management Limited or its affiliates or any directors or employees in relation to the accuracy, fairness or completeness of the information contained herein. Any opinion expressed (including estimates and forecasts) may be subject to change without notice. 

If you decide to invest in the Appian Unit Trust, further information in relation to all risks is provided in the Fund Prospectus and supplements. This material is available from Appian Asset Management Limited, 42 Fitzwilliam Place, Dublin 2. If you invest in the Appian Unit Trust, you may lose some or all of the money you invest. The value of your investment may go down as well as up. This investment may be affected by changes in currency rates. 

References to past performance are for illustrative purposes only and are not a reliable guide to future performance. Projected returns are estimates only. Forecasted returns depend on assumptions that involve subjective judgement and on analysis that may or may not be correct. 

The above disclaimer and limitations of liability are applicable to the fullest extent permitted by law, whether in Contract, Statute, Tort (including without limitation, negligence) or otherwise.
Appian Asset Management Limited is regulated by the Central Bank of Ireland. 

Appian Unit Fund Prices  
1 February 2016 
Appian Value Fund
Appian Equity Fund
Appian Small Companies Opportunities Fund
Appian Liquidity Fund
Appian Ethical Value Fund

For more detailed information on each of our funds click here

Patrick J Lawless
Managing Director
Eugene Kiernan
Head of Investment Strategy
Frank O’Brien
John Mattimoe
Head of Equity Analysis
Click here for more information about our Investment Team
John Flavin
Senior Relationship Manager
Tel: (01) 662 4053 direct
Click here to email John
Pat Kilduff
Senior Relationship Manager
Tel: (01) 662 3985 direct
Click here to email Pat

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