February 2023

Monthly Market Update


Global indices closed mostly lower last week, as investors reacted to a global theme of worse-than-expected economic readings underpinned by higher-than-expected inflation figures. Hawkish comments from US Fed officials and disappointingly elevated inflation readings. In the US, the benchmark indices closed lower, as the Fed’s preferred inflation gauge, the PCE (Personal Consumption Expenditure) index ticked up in January. The S&P 500, Nasdaq Composite & Dow Jones Industrial Average recorded weekly losses. In Europe, fears of a stricter pace of policy tightening resulted in a sell-off in European equities. The trend followed in the UK, despite increased progress on the Northern Ireland Protocol. The pan-European STOXX 600, French CAC 40, German DAX & British FTSE 100 closed lower. Meanwhile, Oil closed marginally lower as inventories continued building, marking the 9th consecutive weekly increase and the highest level in nearly two years. Overall, recent supply boosts appear to have offset an expected demand recovery. With this, the WTI crude oil closed at $76.32 per barrel, while the Brent contract closed at $83.16 per barrel. Gold closed 1.27% lower to settle at $1,817.10 per Oz.

Outlook: Q1 2023 is likely to see another market dip before a strong recovery after interest rates and inflation reach their peak. The ongoing valuation reset offers interesting opportunities for investors with a medium-to-long-term horizon. We believe that buying high-quality, profitable, blue-chip equities with strong balance sheets, positive cashflow yield, and high dividends will most likely result in double-digit return in the next 12 months. Investment-grade fixed-income securities also offer attractive yields at these levels, without subjecting portfolios to much risk.

Developed Markets

North America
US indices closed sharply lower as investors reacted to hotter-than-expected inflation news. Since the beginning of the rally in October, the S&P 500 has lost more than 35% of the gains made, still managing a year-to-date positive of 3.40%. The Dow Jones Industrial Average on the other hand had briefly entered negative territory. S&P 500, Nasdaq Composite & Dow Jones Industrial Average lost 2.67%, 3.33% & 2.99%, respectively. The Feds preferred inflation indicator, the PCE index (Personal Consumption Expenditures index) ticked up in January, serving a blow to investors’ optimism. Friday’s report from the Commerce Department showed that consumer prices rose 0.6% from December to January, a sharp rise from the 0.2% increase from November to December. On a year-on-year basis, prices rose 5.4%, up from a 5.3% annual increase in December. Prior to last week, the government published the consumer price index date (CPI) – which showed that prices jumped 0.5% from December to January, much more than the previous month’s 0.1% rise. The report served as a warning for investors, indicating that the Fed may keep hiking rates well into this year. With this, consumer spending reportedly rose 1.8% last month from December after falling the previous month. Consumer prices climbed 6.4% in January, below the recent peak of 9.1% in June, but still remained well above but above the Fed’s 2% inflation target. Known for his hawkish views, St. Louis Federal Reserve President James Bullard, boosted investor optimism during an interview, where he stated that he still thought that the Fed should bring rates to five and three-eighths—or 5.375%. Meanwhile, US intelligence has found that conversations have taken place within the Chinese government to aid Russia’s war effort, including supplying the Russian army with ammunition and weapons. President Joe Biden’s top national security adviser, Jake Sullivan said that the White House had not yet seen China provide Russia with lethal assistance in its war on Ukraine and warned Beijing that doing so would be against its interests. Sullivan said that the U.S. would remain “vigilant” in monitoring developments and that communicating possible consequences to Beijing for providing such assistance to Russia “is better done directly with Chinese counterparts in private”.

Europe & UK
European indices closed lower with their American peers as better-than-expected economic data left investors fearful that the European Central Bank (ECB) would double down on its tightening efforts. The pan-European STOXX Europe 600 Index, German DAX Index, French CAC 40 index & British FTSE 100 index lost 1.42%, 1.76%, 2.18%, and 1.57%, respectively. On the inflation front, the eurozone saw that price increases slowed in January to an annual rate of 8.6%, down from 9.2% in December. Core inflation (excluding fuel and food) showed that underlying price pressures continued to rise – accelerating to 5.3% from the 5.2% registered in December. In Germany, recent data releases showed that the German economy contracted by 0.4% in Q4 2022, double previous estimates of a 0.2% decline. Meanwhile, across the weekend and on Monday, Britain and the EU announced the agreement of new trade rules in Northern Ireland in an attempt to resolve trade issues that have fuelled Brexit tensions across the UK, EU & Northern Ireland. The deal is to be implemented in hopes of fixing the issues created by the Northern Ireland Protocol, an addendum to the Brexit deal agreed by Boris Johnson and the EU in 2019. The original protocol was created to prevent a hard border on the island of Ireland by keeping Northern Ireland aligned with the EU – thereby allowing goods to travel between the Republic and the Province unchecked. Prime Minister Rishi Sunak said that the new deal – the “Windsor Framework,” will allow for “smooth flowing trade” within the UK, as well as “protect Northern Ireland’s place” in the UK, “safeguarding” the sovereignty of Northern Ireland. Sunak said that the new deal would allow the UK government to determine VAT rates applicable in Northern Ireland, as opposed to the current system where the rates are determined by the EU. Sunak also announced a new system – “Stormont brake” that would give power back to Northern Ireland’s government, allowing them to pull an “emergency brake” on any new EU laws from being imposed on the province. If Stormont brake is activated, the Westminster government will also be given a veto over the law. Prime Minister Sunak now has the complicated task of convincing Northern Ireland’s skeptical politicians to proceed with the new deal.

Japanese equity markets closed lower developed market counterparts, investors growing concerned about a further tightening of international financial conditions. The Nikkei 225 index and broader TOPIX fell 0.22% and 0.18%, respectively. Japan’s factory output dropped at the fastest pace in 8 months in January as declining overseas demand took a heavy toll on key industries such as auto and semiconductor equipment. Factory output fell 4.6% in January from December 2022 – a larger-than-expected contraction with median forecasts being a 2.6% decline. Separate data showed retail sales to have contrasted this, having posted their sales posted their fastest growth levels in nearly two years – highlighting the divergent paths between soft manufacturing and robust service-sector activity. Meanwhile on the monetary policy front: the incoming Bank of Japan Governor, Kazuo Ueda, adopted a largely dovish tone, emphasizing monetary policy continuity but also acknowledging that the current policy had side effects. Ueda stressed that it will take time for the BoJ to achieve its 2% inflation target sustainably, and mentioned that with the current economic and price situation and outlook, it would be appropriate to continue with monetary easing. Ueda did mention that upon securing the inflation target, the central bank will be able to take steps to normalize monetary policy. Japan’s core consumer price index rose 4.2% year-on-year in January – the largest gain in over 41 years. On this, Ueda echoed the current BoJ Governor, Haruhiko Kuroda, stating that the main driver for these price hikes is cost-driven inflation due to rising import prices and not due to strong demand.

Emerging Markets

Chinese indices rose across the week as investors looked beyond geopolitical tensions and the spy-balloon saga. The Shanghai Stock Exchange Index gained 1.34%, while the blue-chip CSI 300 added 0.66%. A statement from the People’s Bank of China’s (PBoC) quarterly policy implementation report outlined the central bank’s expectations of the nation’s economic rebound in 2023, with monetary policy expected to be “precise and forceful”. A focus of the PBoC will be to support domestic demand expansion whilst stabilising economic growth and prices. The PBoC stressed that the external environment remains “severe and complex”, emphasising that the factors that serve as the foundations of domestic economic recovery are “not solid”. The report also mentioned that loosening of policy would likely not be needed after Beijing’s removal of pandemic restrictions in December resulted in a batch of better-than-expected economic readings. During the week’s policy meeting, the PBoC opted to leave its benchmark one-year and five-year loan prime rates unchanged for the 6th consecutive month, as was widely expected.

Indian indices closed mixed across the week as investors reacted to negative global economic indicators and the possibility of further policy tightening. The Nifty 50 closed 2.67% lower, while the BSE Sensex gained 0.53%. The Indian economy is estimated to grow 7% in the ongoing financial year 2022-23 despite global headwinds and measures announced in the national budget (increased CAPEX, infrastructure development, green economy push, and initiatives for strengthening financial markets). These new budget expansion areas are all expected to promote job creation and spur economic growth. Meanwhile, Reserve Bank of India (RBI) Monetary Policy Committee (MPC) member, Jayanth R. Varma stated that India’s economic growth appears to be “very fragile, and monetary tightening is compressing demand”, adding that growth it may fall short of what the country needs to meet the aspirations of its growing workforce. Varma stated that inflation will likely remain high & sticky in 2022-2023, but come down significantly in 2023-24. Varma explained that consumer demand will likely continue declining, as he expects that the rising costs of EMI’s (easy monthly instalments) will likely build pressure on household budgets and dampen spending. The RBI has projected India’s economic growth at 6.4% for 2023-2024. Gross Domestic Product (GDP) growth is estimated at 7% in 2022-23.

MENA region benchmark indices closed lower across the week, with Saudi Arabia’s TASI & Dubai’s DFMGI losing 2.87% & 1.66%, respectively. In Dubai, Consumer prices fell across January, bringing the annual inflation rate in the emirate down to 4.6% thanks to a drop in the cost of transport (as a result of lower oil prices). This was a 0.6% decline in the CPI from December’s 5.2%. The cost of transport reportedly fell by 8.7% from December. Recreation, sport and culture also fell by about 6.4% while tobacco prices dropped by 5%. In Abu Dhabi, GDP growth reached 10.5% year-on-year growth during the three quarters of 2022, the highest in the Middle East and North Africa. The latest data showed that the emirate’s real GDP exceeded AED 830 billion during the January-September 2022 period. Non-oil sectors contributed 50.3% to the real GDP of the emirate, reflecting an increase of AED 39 billion to reach AED 417.3 billion. Meanwhile, Saudi Arabia’s economic growth is expected to accelerate to 3% in 2023, according to Riyad Capital (backed by a robust non-oil sector). The oil sector is expected to continue its growth trajectory estimated at 1.2% this year, with forecasts on the Kingdom’s production rate to remain stable at an average of 10.7 million barrels per day (after reaching 10.6 million barrels per day in 2022).

Commodities and Forex

Oil closed marginally lower as inventories continued building, marking the 9th consecutive weekly increase and the highest level in nearly two years. Overall, recent supply boosts appear to have offset an expected demand recovery. With this, the WTI crude oil closed at $76.32 per barrel, while the Brent contract closed at $83.16 per barrel. Meanwhile, Gold closed 1.27% lower to settle at $1,817.10 per Oz.

The US Dollar closed higher for a fourth consecutive week; investors were buoyed by hawkish Fed comments and poor inflation readings. The dollar gained 1.30% against a basket of six other currencies. The DXY index (measuring the relative strength of the dollar) reached a value of $105.21. The Japanese Yen weakened to JPY 136.43 against the U.S. dollar, with dovish comments from the incoming BoJ Governor causing investors to lose confidence in the currency’s power. Meanwhile, China’s yuan dropped to a 7-week low of 6.9640 against the dollar, following the release of unexpectedly strong U.S. inflation data.


WTI Oil ($/barrel)$66.74$77.05$80.26$75.21
Brent Oil ($/barrel)$72.97$83.89$85.91$77.78
Gold ($/oz)$1990.20$1853.20$1842.20$1831.00
Natural Gas ($/mmBtu)$2.34$2.75$4.47$3.73


Euro (€/$)1.06821.05841.07011.1386
Pound (£/$)1.21981.20541.20631.3535
Japanese Yen (¥/$)131.6300136.1200130.9700115.0300
Swiss Franc (CHF/€)0.98900.99540.98901.0378
Chinese Yuan Renminbi (CNY/$)6.88876.93846.92256.3797

Index Valuations

Index Return

Equities1 weekMTDQTDYTD
S&P 5001.47%-1.23%2.41%2.41%
DJ Industrial Average-0.11%-2.25%-3.35%-3.35%
Russell 2000-2.57%-8.89%-1.70%-1.70%
Russell Midcap-2.03%-6.82%-1.53%-1.53%
STOXX Europe 50 (€)-3.86%-4.07%7.50%7.50%
STOXX Europe 600 (€)t-3.76%-5.17%3.12%3.12%
MSCI EAFE Small Cap-3.53%-3.96%1.00%1.00%
FTSE 100 (£)-5.20%-6.43%-0.64%-0.64%
DAX (€)-4.28%-3.89%6.07%6.07%
FTSE MIB (€)-6.55%-7.22%8.04%8.04%
CAC 40 (€)t-4.09%-4.71%7.09%7.09%
SWISS MKT (CHF)-0.82%-3.15%0.18%0.18%
TOPIX (¥)-3.55%-1.69%3.63%3.63%
Hang Seng (HKD)1.03%-0.99%-0.97%-0.97%
MSCI World0.02%-1.99%2.49%2.49%
MSCI China Freet0.53%-1.68%-1.68%-1.68%
MSCI EAFE-3.11%-2.98%2.71%2.71%
MSCI EM-0.26%-1.13%-0.22%-0.22%
MSCI Brazil (BRL)-1.78%-3.15%-6.97%-6.97%
MSCI India (INR)-1.58%-0.62%-8.01%-8.01%

Fixed Income

(17/03/23)1 week %1 month %6 months %YTD %1 year %2 years %
US dollar Adventurous-0.52%-3.05%8.70%4.26%-9.45%-13.16%
US dollar Blue Chip0.56%-1.60%2.03%2.84%-9.19%-8.66%
US dollar Cautious1.05%-0.71%1.23%2.54%-8.91%-9.71%
US dollar Defensive1.58%0.57%0.99%2.24%-8.34%-11.06%
US dollar Performance-0.08%-2.60%3.92%3.25%-9.31%-8.66%

Blend Fund Performance Year To Date:

Blend Fund Performance Since Inception:

Direct Fund Name

(17/03/23)1 week %1 month %6 months %YTD %1 year %2 years %
Aditum Global Discovery-1.75%-3.68%-0.32%-4.92%--
BlackRock GF World Healthscience USD0.67%-3.22%1.66%-5.70%-4.61%2.49%
BlackRock GF World Mining USD-4.27%-8.98%13.16%-4.93%-15.89%2.06%
Emirates Global Sukuk0.55%-0.23%0.86%1.09%-3.67%-7.22%
Emirates MENA Fixed Income0.25%-0.95%1.97%0.25%-6.63%-8.30%
Emirates MENA Top Companies-3.38%-2.47%-11.05%-3.94%-16.41%12.33%
Franklin Gold and Precious Metals USD8.11%3.06%17.66%1.96%-27.92%-21.72%
Harris Associates Global Equity-3.64%-7.95%7.91%4.24%-8.63%-11.90%
Loomis Sayles Global Growth Equity Fund2.69%-1.89%9.76%10.46%-7.07%-18.58%
Loomis Sayles Multisector Income Fund0.20%-0.94%1.37%1.65%-4.83%-9.83%
PineBridge Japan Small Cap Equity-4.39%-4.66%1.96%-5.86%-8.47%-27.20%
UBAM 30 Global Leaders Equity $-2.29%-5.63%3.06%0.09%-6.92%-1.19%
UBAM Swiss Equities-2.78%-4.41%5.82%0.35%-16.57%-10.50%
iShares US Corporate bond Index1.06%1.17%2.20%1.28%-6.80%-10.03%

Zurich Managed Funds

(17/03/23)1 week %1 month %6 months %YTD %1 year %2 years %
US dollar Adventurous-0.52%-3.05%8.70%4.26%-9.45%-13.16%
US dollar Blue Chip0.56%-1.60%2.03%2.84%-9.19%-8.66%
US dollar Cautious1.05%-0.71%1.23%2.54%-8.91%-9.71%
US dollar Defensive1.58%0.57%0.99%2.24%-8.34%-11.06%
US dollar Performance-0.08%-2.60%3.92%3.25%-9.31%-8.66%

Zurich Mirror Funds

(17/03/23)1 week %1 month %6 months %YTD %1 year %2 years %
ZI Canaccord Genuity Balanced-1.11%-3.26%0.48%0.62%-8.18%-14.57%
ZI Canaccord Genuity Growth-1.94%-4.41%0.55%0.55%-8.67%-15.59%
ZI Canaccord Genuity Opportunity-3.78%-5.97%-0.75%-1.25%-8.26%-16.74%
ZI Emirates Active Managed fund-1.17%-3.19%-0.08%1.38%-10.09%-18.11%
ZI Emirates Balanced Managed fund-0.38%-2.12%-0.15%1.01%-10.81%-19.16%
ZI Emirates Emerging Market Debt-1.47%-3.55%3.43%0.50%-7.10%-23.87%
ZI Emirates Emerging Market Equity-2.68%-5.75%-1.24%-1.12%-11.42%-32.52%
ZI Emirates Islamic Balanced Managed fund0.05%-1.37%-0.07%0.88%-8.31%-10.20%
ZI Loomis Sayles U.S. Growth Equity3.73%-0.30%10.69%14.16%-7.92%-8.69%

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.