C8 GBI Good Governance February 2022 Monthly Report – Cirdan Capital

The ‘Good Governance’ certificate was steadily recovering from January’s sell-off but was hit once again as energy prices spiked following the Russian invasion of Ukraine. The certificate ended down 0.6% on the month.

We noted last month, that, both in and out of sample, there is only one equivalent drawdown, in Dec 2010 – Jan 2011, when there was a drop of 12.2%. We also noted that these losses proved only temporary and were fully recovered within 4 months. However, these remain difficult times for an ESG L/S strategy given the risks of the world’s 2nd largest gas and 3rd largest oil producer being excluded from the world energy market.

Importantly however, these ESG-related risks are balanced by many examples since 2007, where the ‘Good Governance’ portfolio of US stocks significantly outperforms during periods of financial market stress, as investment flows seek the safe haven of well-governed stocks. Whilst any long-term premia can have demanding periods, we remain convinced that ‘Good Governance’ will continue to perform over time.

Other posts

Thoughts From The Divide: Identifying Ducks

BY JON WEBB
While we may have missed getting out our Thoughts From The Divide year-in-review piece before the new year (mea maxima culpa), we did manage to spend some time going through our “best of” and “greatest hits” in anticipation of the changing of the calendar. As usual, there were some repeated themes and tropes, but at the highest level, what struck us was that last year seemed very much governed by the timeless question from the underrated philosopher of science, Whitney Houston: “How will I know?” (closely followed by her observation that “crack is whack”) Read more →

NDR Dynamic Allocation Strategy December 2023 Update

BY BRIAN SANBORN
Dynamic Allocation Strategy, indicators, weightings update Read more →

NDR Fixed Income Allocation Strategy December 2022 Update

BY BRIAN SANBORN
The NDR Fixed Income Allocation Strategy, Positioning Update Read more →
Back to all posts →