Storm hits financial markets. Gutmann is prepared.

Last week saw a sharp decline in major technology stock prices. The Japanese stock market lost 12% on Monday. Gutmann Portfolio Management is well-positioned to navigate potentially turbulent times.

Do you recall the sentiment two years ago? Published forecasts predicted a 100% probability of a recession in the US. However, that slowdown never materialized.
Just over a month ago, hardly anyone anticipated a hard landing for the economy. This has gradually shifted in recent weeks. At the same time, news broke over the weekend that Warren Buffett halved Berkshire Hathaway’s substantial Apple stock holding last quarter, leaving the company with record cash reserves. Does he foresee a price decline, market participants wondered.
Moreover, the yen is strengthening against the dollar and euro for the first time in a long while. It had been a popular funding currency for various speculative activities, which are now winding down. The Japanese stock market did not cope well with this currency appreciation, taking a significant hit.

What does this mean for your Gutmann portfolio?

Our balanced approach is proving its worth. The Gutmann Core Equities strategy, comprising 63% of our equity allocation, is the cornerstone of our approach. We adjust weightings quarterly, selling outperforming stocks and buying when they are weak. The aim is to achieve an equal weighting across all stocks.
Our most recent rebalancing occurred on August 1, 2024. NVIDIA and Apple were among our largest sales. Combined with previous quarters’ divestments, this has enhanced our resilience to current market events.
The Gutmann Global Dividends strategy, which we increased to 20% of the Gutmann equity strategy in January 2024, is holding up particularly well in this environment. This strategy deliberately focuses on defensive business models with stable, growing dividends – an approach that is now demonstrating its value.
As you know, we have been focusing on Japanese equities for a long time. Two factors are working in our favor despite the current setback: the strong yen is cushioning the fall in share prices, and we hold a high proportion of overcapitalized companies that are increasingly returning money to shareholders.

Bonds provide support for the first time in years.

Most of our clients also hold bonds in their portfolio management mandates. Gutmann deliberately focuses on quality here too. And this is always in demand in times of flight-to-safety. Bond prices in the Gutmann portfolio are rising accordingly.
Nevertheless, we cannot entirely shield our clients from the fluctuations of the financial markets. Even with our thorough preparation, it will not be possible to avoid short-term setbacks in portfolios with a high equity allocation. However, the discipline of our investment strategy and the quality of the selected securities give us the conviction that we will weather a correction well.
Are you interested in the details of your portfolio’s performance? Please access your individual performance report via the Gutmann App. And as ever, your relationship manager stands at your disposal for any enquiries.