Monthly Letter May 2016

The equity markets con nued to grind a li le higher in May, but are s ll down on the year. Posi- oning without convic on might be the best descrip on we can come up with for the investment climate in Europe. The reasons for not inves ng (long or short) are the same as they have been the last couple of years: elec ons that can derail the euro “project”, lacklustre growth, disparate legal framework across the region, to name a few. You’ve heard it before and you will most likely con n- ue to hear them for the foreseeable future. This should, however, not be a deterrent for inves ng. There are plenty of opportuni es for those who are prepared to dig into the numbers and the odd poli cal landscape that Europe is currently facing.

Madrague had another good month in May, +1.13% which brings the year to date gure to +2.65%. Not an immense absolute return, but an a rac vely low correla on to equity markets year to date.

Sectors of note in May:

Retail: our best performing sector in May, +0.9%. Pandora and Ori ame delivered great results that reinforced our posi ve convic on in both cases. We have wri en about both stocks in previous monthly le ers and we expect to do so in the future as well. Both posi ons are s ll in the por olio.

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