February 2010
Background
Pronouncements from politicians and policymakers negatively impacted sentiment over the period. Proposals to regulate financial institutions in the United States and potential tightening measures to restrict lending activity in Asia were not welcomed by global equity investors. The prospects of an end to stimulative monetary and fiscal policies caused widespread concern.
Performance
Returns from global financial markets were predominantly negative over the month. Cyclical industrial companies and financial institutions were hardest hit as investors fretted over global growth prospects and possible increased regulation on banks. Pharmaceuticals and defensive consumer product companies provided only modest respite from the prevailing downtrend.
Activity
A new position in Novartis, the Swiss pharmaceutical company, was established. Individual stock price weakness was used to add to existing holdings in China Mobile, Taiwan Semiconductor Manufacturing Company and Kimberly-Clark de Mexico.
Outlook
Following last years stock market rally of relief, this year stock markets must deal with reality.
The withdrawal of unorthodox policies and tightening monetary policy at a time of such economic fragility is bound to cause uncertainty. A solid buy-and-hold approach ignoring shortterm fluctuations, will remain central to our investment strategy going forward.
Source: Monthly Factsheet Aberdeen Asset Managers Limited