Richard Scrope has more than 12 years of industry experience and currently runs the VT Tyndall Global Select fund, having brought the FP CRUX Global fund to Tyndall Investment Management in August 2018. Prior to Tyndall, Richard managed the CFIC CRUX Global and European funds. He joined CRUX at the start of 2017, bringing both funds with him from Oriel Asset Management. Prior to entering the City, he served as a British Army officer and then worked at JP Morgan Chase Private Bank. He holds a Bsc in mathematics from the University of Edinburgh and is a Chartered Financial Analyst.
Could this be the moment that European politics actually help markets?
Over the past decades, the political turmoil that has often arisen within Europe has been an unwanted distraction, and over the past few years this has only increased. France has had four prime ministers in the past 24 months, with the latest incumbent only narrowly avoiding another vote of no confidence; Italy is on its 12th prime minister in 24 years, which by comparison makes the UK’s eight over the same period look rather pedestrian.
German chancellors tend to last longer than their neighbours’ prime ministers, and Olaf Scholz being forced to call forward the general election after also failing a vote of no confidence, makes him the shortest serving chancellor since Kurt Georg-Keisinger in 1969. The reign of Scholz will be seen as one of the most disastrous periods for Germany since reunification as its image of stability and the powerhouse of Europe with a vibrant mittelstand has been undermined in recent years.
Enter Chancellor Merz, the leader of the CDU/CSU coalition, with a reputation of a strict work ethic, who argues those who can work, should work, and past positions on Blackrock’s board and is a keen proponent of less regulation. His pro-business mentality may be just the tonic that the German economy needs, but he will have his work cut out to revive confidence in the German machine; perhaps he will be able to find a little of the ‘Vorsprung Durch Technik’ that seems to have gone missing.
With Chancellor Scholz being relegated to third place in the election, by the resurgence of the CDU/CSU, and the rise of the far-right Alternative fűr Deutschland party, there will be considerably less opposition to his road map of policies. In any combination of the ruling coalition, it is unlikely to see any of the junior parties taken into the governing body of the Bundestag to have any senior roles.
German equity markets are likely to react positively to any headlines on deregulation and other pro-business initiatives, however the DAX index has been performing well throughout the period of malaise and is the best performing developed market index so far this year - up 12%. There are 11 of the DAX’s 40 companies up over 15% year-to-date, and the MDAX index of medium companies is also up 9.7% so far this year. The chart below shows that despite all the attention that the US has had post the election of President Trump, the German equity markets have outperformed despite the political turmoil.
We maintain our belief that the German economy is merely dormant, not dead, and that under a leadership with a steady hand, and a sense of what is good for the economy, the region can thrive once again, and perhaps investors should broaden their horizons beyond US equities for future returns.
WARNING: All information about the VT Tyndall Global Select Fund(‘The Fund’) is available in The Fund’s prospectus and Key Investor Information Document which are available free of charge (in English) from Valu-Trac Investment Management Limited (www.valu-trac.com). Any investment in the fund should be made on the basis of the terms governing the fund and not
WARNING: All information about the VT Tyndall Global Select Fund(‘The Fund’) is available in The Fund’s prospectus and Key Investor Information Document which are available free of charge (in English) from Valu-Trac Investment Management Limited (www.valu-trac.com). Any investment in the fund should be made on the basis of the terms governing the fund and not on the basis of any information provided herein.
The information in this Report is presented using all reasonable skill, care and diligence and has been obtained from or is based on third party sources believed to be reliable but is not guaranteed as to its accuracy, completeness or timeliness, nor is it a colete statement or summary of any securities, markets or developments referred to. The information within this Report should not be regarded by recipients as a substitute for the exercise of their own judgement.
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Investment Manager: 5-8 The Sanctuary, London, SW1P 3JP
Tyndall Investment Management is a trading name of Odd Asset Management. Authorised and regulated by the Financial Conduct Authority (UK), registration number 660915. This status can be checked with the FCA on 0845 730 0104 or on the FCA website (UK). All rights reserved. No part of this Report may be reproduced or distributed in any manner without the written permission of Tyndall Investment Management.
Investment Manager: 5-8 The Sanctuary, London, SW1P 3JP
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