4.05.2022 Alpine Select Ltd.: Monthly Update April 2022
Alpine Select has published the monthly update April 2022.
Klick here to download the monthly report.
Alpine Select hat den Monatsbericht April 2022 publiziert (nur in Englisch).
Klicken Sie hier um den Bericht einzusehen.
April has been a negative month for global markets: Nasdaq -13%, S&P 500 -9%, CSI 300 -5%, Nikkei -3.5% and DAX -2%, SMI flat.
The significant sell-off in US markets (Nasdaq’s worst month since the 2008 financial crisis) was caused by prolonged and heightened inflationary as well as geopolitical tensions. Rising interest rates and renewed worries about global supply chain issues, caused by strict COVID lockdowns in some Chinese regions added to stress levels of uncertainty and fears of recession. Corporate earnings revealed that the short- to medium-term profitability prospects of heavyweights like Amazon or Apple are no longer so strong, given the multiple constraints impacting their bottom lines.
One of the key aspects will be the decisions that the Federal Reserve Bank will take in first week of May to further guide market participants through these uncertain times.
The USD has been a strong currency since the begin of 2022. It continued to gain in April, taking the USD YTD vs. non-developing economies to new highs: +11% vs. JPY, +8% vs. EUR, and +6% vs. CHF. As exchange rates are double-edged swords, a stronger USD puts additional inflationary pressures on imports (e.g., commodities) to the EU and Japan, but on the other hand also benefits domestic export sectors. We believe that the JPY devaluation in particularly will provide ideal conditions for Japanese international conglomerates to further improve their corporate earnings. Furthermore, Japan holds large foreign CCY deposits, which have gained in relative value and may provide macro tailwinds. We maintain our long-only exposure to a fundamentally inexpensive Japanese market.
Blockchain and Crypto Assets have somewhat correlated with global risk aversion trends. Bitcoin lost 15% and Ethereum was down -14%. Our managers actively steer through the market volatility, and we expect this actively managed allocation to provide downside protection.
Our merger arbitrage equity position in Vifor Pharma is progressing as expected. By the end of April, CHF 2 had been paid out to shareholders, which was part of this attractive special situation.
Given the uncertainty, we have no new significant transactions to report and are patiently awaiting opportunities as they arise.
About Alpine Select
Alpine Select Ltd is an investment company domiciled in Zug and has been listed on the SIX Swiss Exchange since 1998. The company offers shareholders the key benefit of investing into a global diversified and CHF hedged alternative investment portfolio. The portfolio exposure is actively being risk adjusted to current market sentiment and outlook. The investment style is value oriented and the investments are selected based on the company’s target return of 6-8% p.a. above CHF risk free rate. Alpine Select maintains an active and constructive dialogue with management and board of directors of its portfolio companies in the best interest of its shareholders. Alpine Select does not charge any management or performance fees.