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Equity markets finished August lower. Global equity index MSCI World lost 0,9%, European stock lost the most (-1,22%) while Nordic countries were the only positive performers.
 
Even though goepolitical risk are rising again stock are quite stable – volatility which measures how fast do stock returns move around its averages, is low across most major markets. Volatility is low in equity and bond markets, and although precious metals are rising their volatility is rather low.
 
Macroeconomic data has improved slightly – leading macro indices for the world as a whole are poiting upwards, and Europe is the best performer. Even if developed equity markets are overvalued it is reasonable to hold majority of the portfolio in stocks currently since macro data is so good – when the data truns the other way then will be the time to lower the exposure to equities.
 
Short term trend of falling prices of high quality undervalued stocks has continued as this market segment lost more than average stock, while overvalued stock are climbing higher. That kind of enviorenment, when high quality undevalued stock underperform overvalued (and even unprofitable) stocks is not sustainable. In the medium and especially long term we can expect a reversal of this trend – undervalued stock usually gain a lot more than overvalued stock, but no one can be certain when this reversal will happen.
 
The Fund lost 1,46% in August.