The latest installment of Star Wars – The Force Awakens entertained millions with the good fighting off the evil Empire. It is unfortunate that the Force could not exist in the real world and fight off all that is evil. There were 6,692 migrant deaths in the Mediterranean Sea in 2015 with more than one million irregular migrants arriving from Syria, Africa, and South Asia. Both are appalling statistics. Along with these gruesome numbers, we may also associate last year with the disturbing and dramatic increase in the number of large scale attacks. We connect this with the unfortunate events of the two terrorist attacks that took place in Paris in January and November given the media attention alongside these particular events. But the reality is that there were 385 terrorist attacks globally last year, many of which received little attention from Western media. This made the year a gloomy one indeed and this sentiment was also reflected in the turbulent and challenging markets. Sadly, as the frequency of terror attacks increases, the market reaction continues to be relatively more muted.

Despite the market not being shaken radically from shots of terror, there is anxiety for various reasons, one of which is that we have yet to witness a robust recovery or a global expansion since the last recession. Another reason is the growth realignment in China resulting from weaker demand, which led to a downturn in commodity prices and prolonged manufacturing overcapacity. Hence, there have been global repercussions and global deflation potentially. The producer price index is at its lowest average point for six years in the ten largest economies in Asia excluding Japan. For example, China’s producer prices are down a cumulative 10.8% from their recent peak in 2011 and we can see the dramatic decline of various commodity prices in the chart below.

Global Equity and International Fund Strategies Third Quarter 2015 Review

Suspenseful drama with lots of twists and turns may be enjoyable to watch in a movie, but these are not the ingredients we want for equity markets. And we had our share of ups and downs this past quarter. Concerns of a
global slowdown continued to dominate global markets and recent data confirmed fears around emerging markets as China posted weak trade and Purchasing Managers’ Index (PMI) data while Brazil’s sovereign
debt was downgraded to junk. U.S. and European PMIs also slowed, all of which prompted the Fed to keep rates on hold. In short, investors remain concerned that global growth is faltering.

Global Equity and International Fund Strategies Second Quarter 2015 Review

Global Review

We spent the past quarter running hard but not going anywhere. The Central banks on a global scale continued to bring down interest rates in an effort to reflate their respective economies. Yet, the markets were consumed by headlines brought on by Greece and the drama associated with not paying their loans to the IMF on time.

Based on our recent meetings at a CEO conference in Europe and additional meetings with investee company management teams, our sense is that the European market is in launch mode but has not experienced take-off yet. Despite the market’s anticipation of the stimulative impact of the weaker Euro and lower oil prices, it will still take some time for European companies to fully realize the positive impact in their operations. However, the current environment is certainly better than it was a few years ago and Spain is cited as showing an improvement from its low base. The consensus remains that the U.S. is still the strongest and this bodes well for our European holdings as they are overweight in their U.S. exposure. Emerging markets remain subdued with Russia and Brazil considered to be in a recession and there is concern over China’s slowing growth rate.

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Global Equity and International Fund Strategies First Quarter 2015 Review

Global Macro Review We had the opportunity to attend a key Asia Pacific investment conference in Hong Kong during the quarter. A number of high profile speakers provided an interesting overview of topics that were current. One of the speakers that resonated the mood of today’s market was Professor Shiller, a Nobel Laureate and noted real estate expert. He observed that global asset prices have decoupled somewhat from economic fundamentals, driven higher in part by investors hoping to weather rapid economic changes and fearing for their futures. He continued to speak of an overall anxiety, reflecting a time where people are thinking of their own obsolescence and the speed of how things change. We shall start this quarterly review with a conclusion provided by Professor Shiller which is to be invested in stocks globally while downplaying U.S. equities given the relatively cheaper valuation found in Asian and European stock markets.

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Global Equity and International Fund Strategies Fourth Quarter 2014 Review

Global Macro Review The world in 2014 was turbulent and challenging. Key events included: the militant group Islamic State (ISIS) creating terror with their conquests and displacing hundreds of thousands of people, the Ebola virus causing a global health crisis, conflict between Israel and Hamas erupting once again, and the Ukraine exploding into military conflict. The unfortunate thing about these issues on an ongoing basis is that they may challenge sustainable global growth.

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Global Equity and International Fund Strategies Third Quarter 2014 Review

We had the opportunity to spend part of September meeting with companies in Tokyo, Seoul, London and Paris to conduct our due diligence on potential investments and obtain updates on a number of our current holdings. We thought we would focus this quarterly review on the highlights from these meetings as well as our observations.

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Global Equity and International Fund Strategies Second Quarter 2014 Review

The U.S. market had much to celebrate on Independence Day given that the Dow had reached a new record high of 17,000. And yet, five years after the global recession of 2009, global growth is low and a high level of caution still exists among both investors and corporations. When we review the issues we discussed in the first quarter, we see that circumstances in the market are no longer dire, which may explain why the levels of volatility in the markets are at an all-time low. Yet, the geopolitical risks have not gone away, with the Middle East and Russia being omnipresent in crisis mode. However, the markets appear to have priced in the risks and thus, they are no longer front page news each day. The negative stance towards emerging markets has also subsided.

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Global Equity and International Fund Strategies First Quarter 2014 Review

After the majority of world markets performed exceptionally well in 2013, the first quarter of 2014 can be characterized as a market having little direction. There are many intertwined issues with increasing complexity and no particular issue has been taking leadership. On a macro level, we have come to accept a slower economic growth scenario globally in certain areas such as Europe and the emerging markets and central banks continuing to play a key role in financial markets. On a micro level,the companies in our portfolio had released their year-end numbers by quarter-end and provided guidance for the coming year. We found markets did not reward companies when they beat expectations to the same extent as in the past butrather companies were punished if their guidance was either cautious or not as robust as expected.

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Global Equity and International Fund Strategies 2013 Year End Review and Outlook

Year End Review

It has been five years since the collapse of Lehman Brothers almost sank the global economy and 2013 arguably marked the year when the financial crisis came to an end. Conventional as well as unconventional methods were used by central banks, especially in the U.S. and Japan to aid economic expansion. As has been the case for the past three years, there have been obstacles in the way of the economic recovery, but the U.S. has managed to keep growing slowly, despite the first partial government shutdown in seventeen years that led to a loss of 0.6% of output for the quarter. The annual U.S. budget deficit has declined dramatically from 10% of GDP in the wake of the financial crisis to the current level of less than 4% with continuous improvement expected in the coming years.

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International Fund and Global Equity Strategy Third Quarter Review

This quarter marked the fifth anniversary of the financial market collapse. Rather than just merely surviving, the global financial markets have thrived. While there continues to be a cautious sentiment toward the health of the global economy, U.S. stock markets were just shy of all-time highs in the third quarter. The market continues to focus on the Federal Reserve’s policies and actions, which was evident in the recent positive reaction to the Fed’s decision to maintain its current program of purchasing of bonds and keep interest rates from rising