Paul Lee
Chief Executive Officer & Chief Investment Officer
Portfolio Manager, Paragon Alpha I
General Partner, Paragon Ventures I
At the start of 2024, we highlighted that geopolitics, inflationary trends, interest rates and AI were the themes to watch. Indeed, these issues have each imposed themselves in the financial markets, resulting in short term volatility over the last 6 months that nevertheless, did not derail the continued ascent of the markets in the US.
Earnings were the main determinants of performance, and many blue-chip companies did not disappoint. Our Paragon Alpha Fund I benefited from its allocation to these profitable blue chips, and as a result its performance is up more than 23% net year-to-date, placing our flagship fund in the top 3 of global hedge funds.
For the second half of this year, we are expecting to see inflation in the US continue its downward trajectory, leading to the US Federal Reserve to cut interest rates. With the ongoing uncertainty around geopolitics, we continue to stay invested, and will be positioned to benefit from lower interest rates.
To recap, click here to access the video on overall market outlook for 2024.
—————————————————–
Sean Quek
Managing Director & Senior Portfolio Manager
Paragon SAGE Fund
We started 2024 with an expectation that the environment will be more conducive for global equities following significant rate hikes by the Fed. We also anticipated ongoing volatility even for quality stocks and see opportunities for Paragon SAGE Fund to strategically deploy its reserves.
These predictions held true. A dovish shift by the Fed in the first half of the year boosted risk asset performance, with global equities, particularly US tech mega-caps, seeing an impressive 11.7% gain according to the MSCI World Index. This shift allowed our Paragon SAGE Fund to reduce its cash position significantly, marking the lowest level since the fund’s inception.
Looking ahead, with the US economy showing signs of moderation, we expect a policy shift from the Fed that might favor broader market performance, offering reprieve especially to sectors that are affected by prolonged high rates. Despite a market still sensitive to tech mega-caps, our focus remains on quality investments at sensible prices, ready to capitalize on emerging opportunities.
To recap, click here to access the video on market outlook relating to global equities for 2024.
—————————————————–
Carinn Neo
Managing Director & Senior Portfolio Manager
Paragon Income I
As we crossed into the second half of 2024, our fixed income outlook remains cautiously optimistic. Despite initial expectations, the anticipated rate cuts in Q2 did not materialize, as inflation continued to challenge the market. However, with easing inflation and signs of loosening in the labour market, we are expecting to see rate cuts later this year by the US Federal Reserve to mitigate any potential sharp economic slowdown.
The demand for high-grade bonds remains strong resulting in a tightening of credit spreads and the portfolio duration continues to slightly exceed the index benchmark. Our Paragon Income Fund has navigated these uncertain times with agility, and on track to deliver our target returns.
Looking ahead, we are positioned for two rate cuts in the second half of 2024 and will continue to favour high-quality bonds given their very attractive absolute yield.
To recap, click here to access the video on market outlook relating to fixed income for 2024.
—————————————————–
Note: For “Accredited Investors” and/or “Institutional Investors” only as defined in the Securities and Futures Act (Cap. 289)
