The favorable trends in the international capital markets continued in May, bringing strong returns to the full range of Superfundfunds. Superfund Q-AG* (Superfund’s “A Strategy”)reached a new all-time high of 6,672.79 points at the end of May, corresponding to a total investor return of 567 % since the start of trading in March 1996. Depending on the particular strategy, the Superfund trading systems were able to achieve returns for the month of May between 4.14 % (Superfund A EUR SICAV) and 7.42 % (Superfund C EUR SICAV).
Strong trends in equities, bonds, money market and currencies yield profits
Corporate takeovers, strong industrial demand and strengthening investor confidence provided for rising equity markets in May throughout the world. Germany’s DAX topped the European winner’s list with a gain of +5.8 %, while the U.S. market was able to hit new record levels. The downward trend continued in the international bond markets. Despite modest figures for producer and consumer price indices, the U.S. benchmark bond was trading at a 10-month low. Short-term interest rate futures such as the LIFFE 3-month Euribor contract likewise continued their downward trend due to the favorable global economic conditions, producing healthy profits for Superfund’s trading systems. The U.S. dollar posted a gain for May against the euro, while the yen (-1.8 %) and Swiss franc (-1.5 %) again lost ground.
Losses on coffee
Superfund’s trading systems were less successful with coffee futures. Short positions on New York coffee futures led to negative results after the market produced its first monthly gain for the year. Coffee prices rose by 5.4 % because of the cold, wet weather in Brazil, leading to fears that the unfavorable conditions could lead to massive crop failures in the world’s largest producer of arabica beans.
Upward trend for grains
A powerful rally at month end pushed corn futures up to a net gain of 6.1%. Good growing conditions combined with an upwardly revised forecast on worldwide corn supplies from the U.S. Department of Agriculture held down corn prices during most of May, until unfavorable weather forecasts at month end caused a major surge in prices. Precious metals lost ground in May as equities proved to be more attractive to investors than gold and silver. Gold futures posted a loss of 3.2 % at month end, while silver slipped only slightly thanks to strong economic performance in the U.S. This strength led to rallies in the equity market and U.S. dollar, which along with massive gold sales by European central banks put a drag on precious metals.