3.06.2022 Alpine Select Ltd.: Monthly Update May 2022
Alpine Select has published the monthly update May 2022.
Klick here to download the monthly report.
Alpine Select hat den Monatsbericht Mai 2022 publiziert (nur in Englisch).
Klicken Sie hier um den Bericht einzusehen.
For market participants it has been a tough year so far. During the first three weeks of May, the sell-off (which has been brutal in April ’22 already) continued. Risky assets have been liquidated to a good portion from investors’ portfolios. With a high correlation, the bond market was not any better as the first months of 2022 were the worst in decades.
Some optimism has returned in the last week as the inflation data is showing some signs of slowing and China is about to re-open. Interestingly, the USD is flat for the month vs. EUR and CHF. The sharp equity rebound left the main indices MTD as following: S&P 500 (flat); Nasdaq -1.7%; CSI 300 +1.7%, Nikkei +1.5%, SMI -4%.
It’s the broader market sentiment that the central banks will not be able to cut-back inflation without causing a recession (soft landing as utopia). Given the first 5 months of the year, the markets had to swallow high inflation prints, the Ukrainian conflict, greater geopolitical and economic instability, supply-chain issues, and a strict Chinese COVID-19 lockdown policy hampering global GDP. After a decade characterised by ultra-low interest rates and what seemed like ‘quantitative easing (QE) forever’, we are seeing a tightening cycle from the US Federal Reserve (Fed). It is the beginning of the end of the ‘free money’ era.
Blockchain and Crypto Assets have correlated with global risk aversion trends, therefore no doubt, Digital Assets have taken a beating. Bitcoin and Ethereum are down more than 35% YTD.
Given the stress causing de-peg event of Terra’s USD algorithmic stable coin (UST) and subsequent meltdown of LUNA token in early May we gained reassurance by our managers that most of their LUNA positions have been excited before the crash. This confirms our selection once more, not only outperforming the market during steady times but also preserving investors wealth in crisis mode.
At Alpine Select, we firmly believe in the long-term potential of blockchain based businesses. Consequently, we believe it should have a permanent place in every portfolio. Our selected managers actively steer through the market volatility, and we expect them to lock-in opportunities during times of low valuations.
Our discount arbitrage situation in Castle Alternative was delisted from the SIX Swiss Exchange on 1 June 2022. Cash will be distributed upon completion of final audit duties later this year.
About Alpine Select
Alpine Select Ltd is an investment company domiciled in Zug and has been listed on the SIX Swiss Exchange since 1998. The company offers shareholders the key benefit of investing into a global diversified and CHF hedged alternative investment portfolio. The portfolio exposure is actively being risk adjusted to current market sentiment and outlook. The investment style is value oriented and the investments are selected based on the company’s target return of 6-8% p.a. above CHF risk free rate. Alpine Select maintains an active and constructive dialogue with management and board of directors of its portfolio companies in the best interest of its shareholders. Alpine Select does not charge any management or performance fees.