Report June 2022


The month of June ends with sharp falls across practically all asset classes. The main equity indices have lost close to 9% of their value. The sharp declines are not just in stock markets. The falls in the fixed income markets have also set off alarm bells. On the positive side, we believe that after falls of around 20% since the beginning of the year, much of the bad news is already reflected in prices.

During June, the Pareturn GVC Gaesco Columbus European MidCap Equity Fund class I fell -10.28%. In the last twelve months the Fund has fallen -11.82%, while it has risen 12.98% over the last three years. Since its inception in June 2008, Columbus has returned 126.87%, far outperforming European equity indices. The volatility in the last 12 months has been 16%. The fund has recently received a four-star rating from Morningstar.

The key continues to be inflation, which is currently highly affected by the price of raw materials, especially energy, and by disruptions in supply chains. The falls that we have seen in the price of oil and other raw materials and the improvements in the price of freight should result in improvements in inflation, which will materialize in the last quarter of this year and especially in 2023. We think that markets will react when we start to see better inflation data.

The market is also closely watching companies’ second-quarter results, especially margins, as it seeks to determine the extent to which companies have been able to pass on price increases to their customers. We believe that the combination of cost increases in transportation, raw materials and labor is not yet fully reflected in analysts’ estimates. Margins and financing costs are two of the main risks with regards to maintaining the high returns on capital achieved during the last two years despite the disruptions caused by Covid.

On the positive side, we believe that after falls of around 20% since the beginning of the year, much of the bad news is already reflected in prices. The valuations of many good companies are already much more realistic. We are positive for the next twelve months. Keep in mind that markets start to rise when you’re pricing in a recession, data is bad, and company earnings have been revised down. Fixed income futures are also beginning to anticipate falls in interest rates next year and investment funds are at record levels of liquidity after the sales of recent days. We’re not there yet, but we are fast approaching.



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We thank you for your trust and wish the best to you and your families during these uncertain times.

Since June 14, 2018 both domestic and foreign investors have been able to access the Columbus strategy via the master-feeder structure between the Columbus 75 Sicav in Spain (feeder) and the Luxembourg registered Pareturn GVC Gaesco Columbus European Midcap Equity Fund (master). The Luxembourg vehicle offers both institutional and retail share classes.