First Eagle Global Value Fund 3Q16 Commentary

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First Eagle Global Value Fund 3Q16 Commentary

First Eagle Global Value Fund commentary for the third quarter ended September 30, 2016.

 

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  • Q3 2016 hedge fund letters
  • Q2 2016 hedge fund letters

Market Overview

In the third quarter of 2016, the MSCI World Index rose 4.87%, while in the United States the S&P 500 Index increased 3.85%. In Europe, the German DAX Index was up 9.79% and the French CAC 40 Index rose 6.19%. In Japan, the Nikkei 225 Index rose 6.99% over the period. Brent crude oil increased 1.24% to $48.24 a barrel, and the price of gold fell -1.75% to $1313.30 an ounce. The US dollar weakened -1.36% against the yen and fell -0.94% against the euro.

First Eagle Global Value Fund

[drizzle]

During the third quarter, stock prices and volatility statistics indicated that risk perception in the markets was modest overall. Just before the start of the quarter, the Brexit vote had caused risk aversion to spike, but soon after, most world markets other than the UK rebounded. Implied volatility, as measured by the VIX, was below average, and investor capital continued to flow into equity ETFs. As we have been stating for some time, we do not share the market’s complacency toward risk.

Events in the third quarter reminded us once again of the strange things