e-fundresearch.com: What are your personal lessons learned from 2014 market developments?
Hans van Zwol: At the start of 2014 there was broad consensus that improving global growth would trigger a moderate rise in interest rates. However, falling inflation expectations, declining commodity prices and extraordinary loose monetary policy caused interest rates to drop to all-time lows. This proved again that portfolio managers should be flexible and be able to react to changing market developments. We became aware that we will have to live, probably even for a number of years, with very low interest rates. The times when positive price impacts of falling interest rates offer high returns are behind us, which requires a different investment approach than in the years before.
e-fundresearch.com: To what extent has your portfolio been able to benefit from the strong appreciation of the US-Dollar in the second half of 2014?
Hans van Zwol: In the months of August and September, we had several long USD positions in the portfolios. These long were both against developed and emerging market currencies. After we reached target and booked sizeable profits, we closed these positions. Next to that, the total return of the fund profited significantly as the strategic portfolio holds a substantial share in USD.