Mr. Walter: Julius Baer Investment Management is the New York investment subsidiary of the Julius Baer Group, which is based in Zurich, Switzerland. Our New York office is an independent investment management firm with a focus on global asset management for institutional and retail clients offering both equity and fixed income products. With 75 billion in assets under management as of December 2007, we're best known for our flagship international equity strategy. The product I would like to discuss today, the Julius Baer Global Equity Fund is a natural offshoot of our tradition and success in international investing. The Global Equity Fund is a no-load, diversified fund, which invests in developed and emerging countries around the world, including the United States. The Fund reached its three-year track record in July 2007 and we are very excited about the increased interest we've seen since then.
TWST: How is the investment climate for your Fund?
Mr. Walter: I think it's an understatement to say the first quarter of 2008 was
a challenging one. We are concerned about the global economic slowdown that's
unfolding and to manage through it, we invest in areas that we believe are going
to be the least impacted by today's global imbalances.
For example, we are underweight the US market because of the housing-related
weakness that we see spilling over to the financial and consumer sectors. We are
also underweight the UK market based on the same home price concerns as well as
the strong British pound which makes trade more challenging. These two markets
are now paying the price for the many years of excessive consumption and
negative savings rates that were the norm. We are also avoiding direct
investment in China because we think that economy has become overheated after
years of double-digit economic growth. While their infrastructure investment
needs are still impressive, the Chinese economy's dependence on exports to the
West coupled with their nascent domestic consumption profile keeps us on the
sidelines.
So where are we investing? Central and Eastern Europe has been an area of
interest for some time and remains so today. We believe that the economic,
political and social benefits these countries are expected to achieve as they
integrate into the European Union should provide our clients with substantial
investment opportunities for years to come. In the near term, this path to
convergence should help this region successfully navigate through a potential
global economic slowdown. We also like that this area is not dependent on US
consumption or Asian investment demand for growth, two bubbles that we think
will prove challenging to investors for the next couple of years. Longer term,
as these countries join the euro currency regime, even more benefits are
expected to emerge.
For more information call (212) 952 7433. The Wall Street Transcript does not endorse any of the comments made by interviewees, and does not make stock recommendations.