Compounded Returns

This week we have seen the CC Euro Equity Fund exceed 103 points. From my point of view performance to date has been exceptional. (Please keep in mind that I am managing this fund with my friend Kristian, so I am practically congratulating myself). The fund was launched in November and since then we have experienced 2 equity market corrections. We were also heavily weighted towards cash during this set-up period. As of this morning my initial readings show a price of 103.40, or 3.4% since the 1st of November 2013, the market index during the same period increased by 2.88%.

We continue to expect this year to be positive for European equities as the economic recovery in Europe takes hold. Equities will also probably get a helping hand from the ECB in the form of Quantitive Easing.

Tomorrow we expect Allianz SE to report FY 2013 earnings per share of €13.04. Allianz SE remains one of our top picks, having one of the best management teams in the industry and demonstrating resilience to economic downturns; basically our kind of stock. However, tomorrow we expect subdued results due to the bad year experienced by PIMCO, their asset management subsidiary. Our price target is currently €131.28 and my personal recommendation is to keep Allianz as a core investment. Allianz gives a regular annual dividend of circa 4% of investment, coupled with the potential of capital appreciation. Over a 3 year period, which would be my investment horizon, Allianz has increased by 25% in price.

On Friday we expect Bayer to report earnings per share of €3.72. We have a price target on Bayer of €100.2. Upside is limited in the short-term due to currency movements. We expect to upgrade Bayer going forward.

We are currently finalizing a report on Volkswagen. The report will be uploaded later today on Webtrader. Our 1yr price target is €203.

Remember, that a marathon can only be finished step by step.

Antoine