A year that begun full of optimism and hope as countries started to gradually lift their COVID-19 related restrictions, quickly turned to one of the most uncertain and volatile years in more than a decade. For the first time in more than 40-years, both the bond and stock market dropped simultaneously and suffered significant losses as a multi-year high inflation sparked by increased consumption, supply chain shortages and sky-high energy prices, forced global central banks to aggressively hike interest rates to tame inflation.
Even in the worst of times, apart from the losers, there are also winners. So, which Ancoria funds were the top performers of the year 2022?
Commodity
Ancoria’s best performing fund for 2022 was the Commodity fund that generated 22.71% in EUR (33.74% in SEK) over the year, carrying on its positive performance from the prior year. Commodity prices spiked early on in the year due to supply side shortages in the energy market following the events in Ukraine, as western nations started imposing heavy sanctions on Russia which in return answered by cutting gas supplies to Europe driving energy prices up. Following the event, the price of wheat also spiked as Ukraine produces over a third of the world’s wheat . Climate change initiatives e.g. increasing demand for commodities that are needed in Electric Vehicles (EVs), put an upward pressure on commodity prices such as nickel and lithium iron phosphate batteries.
Money Market Fund USD
The Money Market Fund USD returned 1.35% in USD during the year, supported by the Federal Reserve’s sudden pivot on its monetary policy which saw interest rates rising from a 0%-0.25% range in the beginning of 2022 to 4.25%-4.5% by year end. The fund’s performance in SEK was impressive (17.34%) due to the sharp appreciation of the USD against SEK, as investors fled risky assets and flooded US markets looking for a safe haven spooked by macroeconomic and geological turmoil that characterised most of the year. In EUR terms, the fund was also up by 7.68% as the USD also appreciated significantly versus the EUR.
Thailand
Thailand Fund delivered 14.55% in SEK (5.10% in EUR) through the year. The Fund’s performance in Thai Baht (THB) was 2.5%. The SET Index which has a high weighting in the country’s large energy and petrochemical sectors enjoyed a strong performance as oil prices jumped during the year. The country’s economy also seems to be one of the main beneficiaries of the diversification of supply chains away from China, while at the same time, the depreciated baht helped attract foreign inflows as Thai stocks were relatively cheap for US dollar investors.