Feb 2020

Monthly Market Update


U.S. equities indexes saw moderate declines across the holiday-shortened week, with an increase in long term interest rates favouring banks and their value stocks, allowing them to outperform growth stocks. Much regarding the short-term future of the economy is left to be derived following the testimony of Fed Chair Powell on Tuesday. In Europe, positive earnings results have lifted the Eurostoxx 600 marginally higher, aided by ECB estimates of GDP growth at 3.9% across 2021. Meanwhile, rising inflation and bond yields prompted the tightening of monetary policies across the region. The UK saw the FTSE 100 close the week higher, as PM Boris Johnson announced his plan to phase the reopening of the nation over the next 5 months. The dollar dropped nearly 0.2% against a basket of world currencies as investors moved towards riskier currencies. The U.S. reported higher-than-expected initial jobless claims and the 10-Year treasury yields increased to 1.33%. Oil prices ended mixed, with WTI futures closing at a dip of 0.39% to $59.24, while Brent futures gained 0.77% to finish at $62.91.  Gold prices finished lower at $1777.40 per ounce, marking a 2.51% decrease for the week.

The equity momentum from 2020 should continue into 2021. Our expectation for more upside is supported by 1) above trend, above consensus global growth, 2) double digit earnings catch up, 3) limited structural imbalances and scarring effects, 4) a predictable, macro guided Federal Reserve, and 5) a near zero policy rate. Compositionally, earnings growth may drive returns more than valuation, as is common in expansionary phases. In terms of Covid expectations, we think that the initial wave of vaccinations will likely bring about a sustained decrease in hospitalizations as elderly populations, which account for 50-60% of hospitalized patients in the US and UK, are vaccinated first. We expect large shares of developed market populations to be vaccinated by mid-2021, with the US approaching 50% in May.

Developed Markets

North America
An increase in long term interest rates raised the discount rate on future earnings, while the increased benefitted bank shares through the increase of lending margins, allowing for value stocks heavily weighted in financial industries to outperform the growth stocks. Weekly jobless claims for the third week increased substantially to 861,000, the most since mid-January, while severe weather patterns disrupted much of the Midwest and South, particularly in Texas, where millions lost water and power. The damage echoed calls for the assistance to municipalities included in the Biden administration’s relief package. This also resulted the shutdown of much of the region’s oil and gas infrastructure, a prospect that is expected to have effects on the national economy.

Europe and UK
Business activity across Europe saw slight improvement in February but continued in its overarching contraction as COVID-19 restrictions continued across the region. European shares found themselves on the higher end by a modest margin, buoyed by companies posting encouraging earnings for the quarter and European Central Bank estimates of GDP growth of 3.9% across 2021. However, sentiments were dampened as rising inflation and higher bond yields encouraged banks to tighten their monetary policies. The STOXX Europe 600 advanced by 0.21%, followed by France’s CAC 40 index at 1.23%. The German Dax ended lower at a loss of 0.40%, marking its second consecutive week in the negatives. The FTSE 100 saw gains across the week, as it seems British firms did not perform as badly as expected during the February installment of national lockdown. Investors sentiments were revived as Prime Minister Boris Johnson
announced a phased exit from lockdowns over the next five months, stating that many schools would reopen by the 8th of March with much credit to the UK’s aggressive vaccination & testing scheme. The FTSE 100 ended 0.52% higher, marking its third week of positive returns.

Japan’s benchmark stocks saw mixed results during the month, with the Nikkei 225 Stock Average advancing 1.7%, crossing the psychological peak of 30,000 for the first time in 30 years. Japanese equity markets are powering past their 2020 lows as global vaccine distribution and its subsequent optimism have led to renewed optimism of future economic activity. Japan also began its national vaccine rollout during the week. Economic reports estimated Japanese economy growth at a 12.7% annualized rate in Q4 despite the contraction of 4.8% across 2020.

Emerging Markets

The benchmark Shanghai Composite index rose by 1.1% across the third week of the month. Data across the Lunar New Year was found to be skewed with governmental efforts to discourage travel with new Coronavirus infections in Northern China. Meanwhile, the Hang Seng index continued onto a 3rd consecutive week of gains, closing the third week at a 1.56% gain overall. Hong Kong markets are continuing to gain following support from southbound inflows from mainland investors.

As with many Asian nations, much of the India’s economy appear to be progressing towards pre-coronavirus levels. With dwindling Coronavirus numbers and increased output, HSBC has raised India’s GDP growth forecast from 9% to 11.2% and lowered CPI inflation expectations from 4.9% to 4.7% for FY22 (2021-2022).


MENA region equities ended lower third week of the month. The UAE’s markets saw another lacklustre week as the DFMGI extended its weekly losses to a 4th consecutive week with a dip of 0.70%. While in Abu Dhabi, the ADI saw its first weekly loss in 7 weeks by the third week of the month, with a dip of 0.43%, reversing the gains of the two previous weeks. Investors’ hopes of a vaccine-fuelled speedy economic recovery were mellowed after the Chairman of DAMAC properties announced an AED 37 million loss for 2020 and stated that substantial economic recovery could only be expected in 12-24 months. Saudi Arabia’s Tadawul All Shares index inched further down with a loss of 0.66% across the week. The kingdom is expecting to further bolster their vaccination scheme, having approved the UK’s AstraZeneca Vaccine for use.

Commodities and Forex

Oil prices saw a mixed month with WTI futures closing the third week at $59.24 with a loss of 0.39% while Brent continued to its 5th consecutive week of gains, closing at $62.91 with a third week gains of 0.77%. Oil prices appeared to have after the deep freeze-induced oil supply allowed Oil to reach its 13-month high of $60.05 and Brent to $63.35. Gold prices finished third week lower at $1777.40, marking a 2.51% decrease for the week. This occurred as the 10-year treasury yield saw a marginal increase, having started the week at 1.15% and rising to 1.33% by Friday.

The dollar dropped roughly 0.2% by the third week of the month against a basket of world currencies as investors moved towards currencies associated with greater risk-on sentiment. Meanwhile, the Euro was essentially flat, and the yen dropped by more than 0.5%. The British pound saw resurgence, advancing more than 1.1% against the dollar, its best week since mid-December.


Commodities 02/26/21 01/31/21 12/31/20 12/31/19
WTIOil ($/barrel) $61.50 $52.20 $48.52 $61.06
Brent Oil ($/barrel) $66.13 $55.88 $51.80 $66.00
Gold ($/oz) $1731.60 $1850.30 $1899.60 $1529.30
Natural Gas ($/mmBtu) $2.77 $2.56 $2.54 $2.19


Currencies 02/26/21 01/31/21 12/31/20 12/31/19
Euro ($/€) 1.2078 1.2132 1.2226 1.1229
Pound ($/£) 1.3945 1.3702 1.3653 1.3265
Japanese Yen (¥/$) 106.64 104.74 103.29 108.59
Swiss Franc (CHF/€) 1.098 1.0806 1.0821 1.0853
Chinese Yuan Renminbi (CNY/$) 6.4722 6.4555 6.514 6.9615

Index Valuations

Index Return

Fixed Income

Blend Fund Performance Year To Date:

Blend Fund Performance Since Inception:

Direct Fund Name

Zurich Managed Funds

(28/02/21) 1 week % 1 month % 6 months % YTD % 1 year % 2 years %
US dollar Adventurous -3.45% -1.13% 14.94% 1.46% 28.18% 41.95%
US dollar Blue Chip -2.21% -1.12% 6.60% 0.68% 17.70% 30.67%
US dollar Cautious -2.02% -1.82% 2.51% -0.85% 11.32% 23.15%
US dollar Defensive - - - -2.55% 4.97% -
US dollar Performance -2.35% -0.53% 11.13% 1.98% 23.37% 36.81%

Zurich Mirror Funds

(28/02/21) 1 week % 1 month % 6 months % YTD % 1 year % 2 years %
ZI CGWM Affinity -1.50% -0.21% 13.64% 2.36% 18.77% 29.34%
ZI CGWM Diversity -0.87% -0.13% 10.47% 1.36% 13.28% 22.47%
ZI CGWM Opportunity -1.54% 0.06% 14.70% 3.01% 20.48% 27.34%
ZI Emirates Active Managed fund -1.63% -0.31% 9.38% 2.41% 7.59% 13.25%
ZI Emirates Balanced Managed -1.70% -1.00% 5.52% 0.93% 5.20% 10.85%
ZI Emirates Emerging Market Debt -0.53% -0.23% 6.59% -0.08% 3.22% 13.13%
ZI Emirates Emerging Markets Equity -2.68% -2.12% 21.56% 7.01% 25.09% 24.77%
ZI Emirates Islamic Balanced Managed fund -2.24% -1.26% 9.41% 3.48% 8.96% 16.07%
ZI Loomis Sayles US Growth Equity -3.09% -1.13% 6.27% 0.39% 29.30% -

Disclaimer: This document is for information purposes only. This document does not constitute an offer, an invitation to offer, or a recommendation to enter into any transaction, nor does it constitute investment advice. Its contents are derived from sources generally believed to be reliable although no representation is made that it is accurate or complete and we accept no liability with regards to your reliance on the same. Past performance is not necessarily indicative of future results and prices and availability are subject to change without notice. Availability shall be subject to the relevant law and regulation and pursuant to the relevant Fund Prospectus and relating legal documents.  Where overseas investments are held, the rate of exchange may cause the value of investments to go down as well as up. The value of investments and any income from them can go down as well as up and you may not get back the amount originally invested. Chart Source: GSAM and Bloomberg as of close of trading on August 31, 2017. Chart data shows next 12 month P/E ratio from August 2007 to the current period. 12m forward P/E(x) refers to price-to-earnings ratio for the next 12 months, which is a valuation measure applied to respective broad equity indices. Please see additional disclosures at the end of this presentation. All data is denominated in USD unless noted otherwise.† Data is released weekly, as of Monday. If data displays an asterisk: 

* Data is lagged by 1 day.
**   Data is lagged by 2 days.