Lion Global Dynamic Growth USD Q2 2021 commentary

Lion Global Dynamic Growth USD Q2 2021 commentary

SaxoSelect Commentaries
Saxo Markets

Asset classesStocks (developed and emerging markets), bonds (investment grade and high yield) and commodities
Instruments tradedETFs and mutual funds
Investment styleBottom up research and selection of best in class ETFs and mutual funds
Quarterly return6.0% (net of fees)
Annualised volatility (since inception)9.6%

Market overview


Markets remained buoyant in the second quarter of 2021. MSCI All Country World Index rose 7%, driven by US equities leading the way and Europe and Asia trailing behind. Chinese equities were flat and Japan equities were down slightly during this period. The US 10 year government bond yields retraced 28 basis points (bps) and this allowed Chicago Board Options Exchange (CBOE) Volatility index (measure of equities volatility) to come down to 15-16 levels. Growth stocks outperformed Value stocks handsomely as market participants rotated into long term secular growth winners. This was evident by Nasdaq Index’s 9.5% move during the second quarter of 2021. Earnings revisions continue being revised upwards and this continued to fuel markets. So far this year, analysts have revised up US earnings by about 17% and we are witnessing similar patterns of analysts moving their estimates higher in Asia, Japan and Europe as well. This year is all about earnings growth and Price-to-Earnings valuations have remained stable, amidst at an elevated level. 

Inflation numbers were off the charts in May 2021 due to the exceptionally low base effect of 2020 recession, but markets looked past the data. Most market participants believed that the inflation spikes are transitory and there is little evidence to assume structural long term inflationary pressures. 

Fixed Income 

Fixed income returns were flat to slightly higher with US High Yield and Emerging Markets Bonds leading the way with 2.5-3.5% returns (USD). US Investment Grade bonds underperformed High Yield and the same phenomenon was cited in Asia. Credit spreads generally tightened across the board as markets were risk on due to better global economic data. Asian credits underperformed US bonds as market participants were concerned about China credit impulse rolling over. China offshore and onshore bond markets rose 1-1.5% as Chinese government bond yields retraced. 

Commodities complex rallied across the board from iron ore to copper to crude oil and aluminum. The pick-up in global industrial activity, business capital spending and recovery in housing and automobile markets gave commodities traders room to continue bidding up prices. This is despite China’s attempt to cool the commodities markets by releasing inventories. Gold remained firm with a slightly 3.5% rise. 


Portfolio performance (net of fees)*

Since Jan 201694.2%

Investment performance of the managed portfolio reflected for the period prior to the launch on 25/02/21 is simulated past performance, based on back-tested performance of portfolio components. For more detailed information, see full disclosure in the disclaimer section of the commentary. 

The Lion Global Dynamic Growth Portfolio (USD) rose 6% in the three months ending 30 June 2021. Since inception (Feb 2021), the portfolio (USD) is up 2.8%. The model enjoyed positive contributions from the BGF US Growth Fund (up 9.1% in USD) and Schroder ISF European Special Situations Fund (up 8.1% in USD). Other positive contributions came from BGF US High Yield Fund, Schroder Greater China Fund and Fidelity Strategic Income Bond Fund. 

During the second quarter of 2021, the Lion Global Dynamic Growth team (the “team”) decided to exit from BGF US Growth fund and PIMCO Global Bond Fund and allocate the weights to iShares Automation & Robotics ETF, iShares MSCI USA Quality Factor ETF and iShares Russell 2000 Value ETF. These allocation shifts reflect the team’s view on a rising corporate capital expenditure, broadening out of the economic recovery as vaccination rates rise and its preference for companies which deliver quality earnings and returns. The switch out of PIMCO Global Bond Fund reflects the team’s view on shortening duration risk from the model portfolio and positive risk-on sentiment where the allocation is used to fund an increase in equity allocation. 


Portfolio Allocation (as of 30/06/21)




Governments are encouraging a speedier vaccination to reduce restrictions.  The developed countries have accelerated the pace and rate of vaccination. This has enabled countries to open up economic and social activities, spurring economic growth higher. 

In terms of inflation in the US – it is noted that the rise in some of the core components are unlikely to be repeated e.g. Used Car prices, Woman’s Apparel, Lumber. Rental (Accommodation) could potentially remain high for the near term. However, the Futures market has priced in a rate hike in 2022 and 2 hikes in 2023 while the Fed’s Dot plot suggests rate hikes only to begin in 2023. It is noted that the net short positions in US Treasury remains elevated, as participants continue to bet on US Yields to rise. The view is for broad markets to continue trading in a range with a small upward bias. The team continues to see opportunities in sub-sectors and themes. 


*Investment performance of the managed portfolio reflected for the period prior to the launch is simulated based on the actual past performance of the portfolio’s constituent funds and fixed asset allocation and weights of these constituent funds in the portfolio. Past performance of the constituent funds is not indicative of their future performance which is subject to risks, uncertainties and many factors. Actual weights and allocations of the constituent funds to the portfolio may also vary over time and differ from the weight and allocation assumptions used in generating the portfolio’s pre-launch performance numbers.  Actual performance of the managed portfolio may therefore differ materially from such simulated performance, which should be read only with these qualifications in mind.

Lion Global Investors Limited (“Lion Global”) curates and provides model portfolios for Saxo Capital Markets Pte Ltd (“Saxo Capital Markets”) who has full discretion to accept, reject or make investment decisions that are independent of or differ from, the model portfolio. Lion Global does not manage or execute trades for any managed portfolio, product or service offered by Saxo Capital Markets or its affiliates and does not provide investment advice or investment recommendations to clients of Saxo Capital Markets or its affiliates. Lion Global has no obligation or liability in connection with the operation, marketing, trading, suitability or sale of any managed portfolio, product or service offered by Saxo Capital Markets nor does Lion Global have any obligation or liability to any client or potential client of Saxo Capital Markets. As such, Lion Global will not be liable to any client or potential client of Saxo Capital Markets for any losses, damages, costs or expenses associated with any model portfolio provided to Saxo Capital Markets. Prospective investors should read the prospectus and Product Highlights Sheet of the funds which may be obtained from the respective fund sponsors. The performance of a fund is not guaranteed and the value of units in a fund and the income accruing to the units, if any, may rise or fall. Past performance are not necessarily indicative of the future or likely performance of a fund. This advertisement or publication has not been reviewed by the Monetary Authority of Singapore.

Lion Global Investors® Limited (UEN/ Registration No. 198601745D). 

Any information found in this document, including performance information and statistics are subject to change. You can find the latest updated pricing information on the description page for each available portfolio. In providing this material Saxo Bank has not taken into account any particular recipient’s investment objectives, special investment goals, financial situation, and specific needs and demands and nothing herein is intended as a recommendation for any recipient to invest or divest in a particular manner and Saxo Bank assumes no liability for any recipient sustaining a loss from trading in accordance with a perceived recommendation. All investments entail a risk and may result in both profits and losses, and all capital is at risk. In particular investments in leveraged products, such as but not limited to foreign exchange, derivatives and commodities can be very speculative and profits and losses may fluctuate both violently and rapidly. Speculative trading is not suitable for all investors and all recipients should carefully consider their financial situation and consult financial advisors in order to understand the risks involved and ensure the suitability of their situation prior to making any investment, divestment or entering into any transaction. Any mentioning herein, if any, of any risk may not be, and should not be considered to be, neither a comprehensive disclosure of risks nor a comprehensive description of such risks. Any expression of opinion may not reflect the opinion of Saxo Bank and all expressions of opinion are subject to change without notice (neither prior nor subsequent).

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