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March 2017

“It’s Too Risky to Invest”

 

“It’s too risky to invest” was the familiar cry during 2016 as political events such as the Brexit referendum, the Nice attack, the Turkish coup, the US presidential election and the Italian constitutional referendum dominated the headlines. 

Despite the negative headlines, 2016 proved to be a positive year as growth in the global economy, and not politics, became the main driver of investment returns.  

The start of 2017 has seen this trend continue, with a stronger global economy and increasing inflation expectations providing markets with a positive tailwind. However, risk is inherent in financial markets and should never be ignored. At Appian, we believe in the importance of having a philosophy and process that deals with objectively managing risk, whilst at the same time striving for superior returns.
  
The three biggest risks that worry global investors today are listed below along with our view:

European Elections raising Disintegration Risk:
The rise in support for euro sceptic parties across Europe is a real worry and is at the front of investors’ minds this year as France, Germany and the Netherlands head into elections. The prospect of a victory by the National Front in France is what markets are most worried about currently. At present this does not seem likely, but given the level of apathy in France driven by high unemployment levels means it cannot be ruled out completely. The only certainty with regard to rising populism within Europe is that it cannot be ignored and should result in a move away from austerity towards more pro-growth expansionary policies.

A Global Trade War:
Fears over a global trade war, have heightened due to the rhetoric emanating from the US administration, since the presidential election in October. Rising protectionism in the US has the potential to slow global growth and needs to be closely monitored. 

Rising Bond Yields:
A consensus view is emerging within markets that 2016 has marked the end of a multi-year period of declining long-term interest rates. A continuing rise in inflation across the globe and a tightening of monetary policy in the US have reinforced this view. This brings forward the question as to how far bond prices will fall and at what speed. An orderly rise in bond yields driven by rising economic growth is a different scenario to a rapid rise triggered by concerns over rising debt levels. At the moment, bond yields are rising due to a pick up in economic growth and inflation expectations.

We continue to monitor the risks above, along with others and most importantly as active managers, we stand ready to react when necessary. As John Maynard Keynes said “When the facts change, I change my mind. What do you do, sir?”. Risks in financial markets are constantly changing and as active managers we will change our positioning when we deem it appropriate.  What do passive funds do when the facts change?

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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 March 2017 
Appian Value Fund 142.1018
Appian Equity Fund 179.5300
Appian Small Companies Opportunities Fund 195.7463
Appian Liquidity Fund 106.2138
Appian Ethical Value Fund 99.9134

For more detailed information on each of our funds click here

Patrick J Lawless
Chief Executive Officer
Eugene Kiernan
Head of Investment Strategy
John Mattimoe
Head of Equity Analysis
Pat Kilduff
Senior Fund Manager
 
Niall Dineen
Senior Fund Manager
Click here for more information about our Investment Team
Kevin Menton
Director
Tel: (01) 662 3989 direct
Click here to email Kevin
John Flavin
Senior Relationship Manager
Tel: (01) 662 4053 direct
Click here to email John
Cillian Quinn
Client Relationship Executive
Tel: (01) 662 4055 direct
Click here to email Cillian
 
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