Who We Are
MECHELANY ADVISORS FZE is a research firm incorporated in the United Arab Emirates.
Registration Number 4022639 Service License Number 47000873
Headquarters
MECHELANY ADVISORS FZE
RAK Business Centre, RAK Economic Zone
Ras Al Khaimah
United Arab Emirates
Contact
MECHELANY ADVISORS FZE
Level 41 Emirates Tower
PO Box 31303, Dubai
United Arab Emirates
+971 58 587 0888
Mechelany Advisors was initially founded in 2010 in Geneva, Switzerland and then re-located to the Middle East to become Mechelany Advisors FZE, based in the United Arab Emirates.
Our team benefits from 35 years of experience in the world financial markets as institutional money managers and macro-economic researchers.
Our expertise combines in-depth macro-economic analysis, first-hand experience of the political arena of the USA, Europe, Asia and the Middle East, and strong technical and behavioral analysis tools.
Our total independence enables us to have an out-of-the box approach within a systematic and exhaustive institutional analytical framework.
Research That Matters !
Research is useless unless it adds value to its readers.
Investing is all about being invested in the right space at the right time.
Bear markets do take place in equity markets every decade or so and they wipe out 40 to 60 % of investments value.
Bear markets also happen in bonds when the macro-economic environment becomes inflationary.
Capitalizing on bull phases and avoiding bear phases is key to generating positive performances.
Constrained Asset Allocations and Passive investment management have always been the main factors of Pension funds structural underperformance.
Agile management and dynamic asset allocation is key to delivering long term performances
Determining long-term trends and major turning points is what truly matters and only an exhaustive and holistic approach to the financial markets allows some degree of certainty in the process.
In-depth macro-economic, geo-political, valuation, flow of funds and behavioral analyses are all needed and must be combined to paint the most accurate picture of the environment at any point in time.
Our Track Record
Model Portfolio
The end result of our research implementation is illustrated in the Mechelany Advisors‘ Model Portfolio that has been running in a fully transparent way since 2014 and has delivered positive double-digit performances every year and a compounded average in excess of 20 % per annum net of transaction fees.
Its details and transaction flow is made available to our MECHELANY ADVISORS MEMBERSHIP subscribers.
Investment Calls
Amongst many other things, in 2018 we successfully predicted :
• THE END OF THE SECULAR BULL MARKET IN EQUITIES
In January 2018, we posted a number of articles warning investors about the formation of an important top and the upcoming bear market in global equity markets. The MSCI World Equity Index made a secular top on January 26th 2018, and the US equity markets recorded their final top after the 2009-2018 bull market on September 20th 2018.
• THE END OF TECH
Technology and the FAANGs were the leaders of the entire 2009 -2018 bull market. In March 2018 we called the end of the bull trend in the technology leaders and warned investors about the dire consequences of overvaluation and high portfolio concentration in these fabulous companies that have revolutionized our world.
In July 2018 we recommended to short them before Facebook and Twitter collapsed and were recommended to short Apple Inc. in the second quarter of 2018.
• THE 2018 OCTOBER CORRECTION
October 2018 was one of the worst month on record since 2011 and global equity indexes lost 11 % of their value during the month. In September 2018 and particularly on September 28th, 2018 we warned investors about the upcoming correction.
• CRYPTO CURRENCIES AND BITCOINS
During the 2017 craze about crypto-currencies we went at length to analyze the real value of the blockchain technology and its application in terms of crypto-currencies and came to the conclusion that they had none of the characteristics that would make them significant mediums of payment or store of value. We analyzed the whole craze as a Ponzi scheme and one of the biggest investment bubble of all time. On dec. 19th 2017, the day the future contract started trading on the CBOE exchange we shorted Bitcoins at US$ 19’000 and reminded short until now in our model Portfolio. Bitcoins now trade below 5’700 and the next phase of the collapse is in process.
• THE RETURN OF INFLATION
Since 1982, the world was framed in a structurally disinflationary environment due to globalization, better central bank monetary policy management, productivity gains due to technological evolution and the emergence of China and Asian economies competing head-on with the rest of the world in the labor markets. We correctly timed the end of the deflationary cycle in 2016 and in our SEVEN STRATEGIC CALLS FOR 2018, we correctly predicted the return of global inflation. In the US core Inflation rose from 1.7 % to 2.4 % while in Europe it doubled form 1.1 to 2.2 % over the same period.
• THE RISE IN THE US DOLLAR
In February – March 2018, against the general consensus we predicted a significant rise in the US dollar against the EUR and the Japanese Yen and indeed the US currency rose from 1.255 to 1.1210 and the Japanese Yen from 106 to 114 over the period. In both cases we sent timing messages that proved to be accurate.
• THE SECULAR TOP IN BOND MARKETS
As early as 2016, we warned investors to avoid fixed income bonds altogether and to switch to Floating rate Notes for their bond allocation.We warned about the artificially priced long dated bonds in the US, Japan and Europe calling for a significant re-pricing of Fixed income instruments over the next few years as inflation comes back and monetary policies are normalized. In 2018, US bond yields shot up to 3.20 % and bond portfolios lost 5 % one average.
• THE END OF THE OIL ERA
For several years now we have highlighted the disconnect between the fluctuations of oil prices and the reality of the supply-demand equation. Oil was the energy that powered the 20th century economic development in exactly the same way Coal was the energy of the industrial revolution of the 18th and 19th centuries. The world is now moving into the era of non-polluting zero-marginal cost energies with the massive development of solar, wind, nuclear and hydrogen power and final consumption of oil will structurally decrease in the coming five years as Electric vehicles and high capacity solar and wind farms are deployed. In 2008 we shorted oil at 148 predicting it would fall to 25 $ and it did, in 2014 we shorted Oil at 114 and predicted a target at US$ 25 and it reached 26 $, and again in September 2018 we shorted oil at 74 only to see it collapse 25 % in the following month.
• LUMBER
In July 2018, in a post titled TREES DON’T RISE TO THE SKIES we recommended to short Lumber at the peak of the bull market at US$ 650. Lumber just made a bottom at US$ 305 in the past few weeks.
• BREXIT – In June 2016, we correctly anticipated that the British people would vote to approve the Exit of Britain from the EU and the subsequent turmoil in the British currency and asset classes. We advocated that BREXIT would end up being beneficial to both the UK and to Europe, allowing a new dynamic of European integration while enabling Great Britain to evolve into the only independent and highly regulated offshore center outside of the main geo-political powers. Like with all divorces, the process is painful but we always predicted that the negotiations would yield a positive outcome. It seems that we are there.
• CHINA’S RISE TO PREDOMINANCE AND TEMPORARY MALAISE
For many years now we have dissected the evolutions of China as an economic and political superpower and highlighted the shift from the Long term Kondratieff cycle of American dominance to the long term cycle of Chinese dominance. The trends are in place and the road is volatile and in January 2018 we warned about the coming China malaise that led to a 25 % fall in Chinese equity markets. However, in many posts, we have highlighted the fact that as the US secular bull market was ending, the Chinese secular bull market would start, something we see developing fully in 2019 with a significant structural appreciation of the Chinese currency and a re-rating of Chinese equity valuations.
• THE TOPS AND BOTTOMS OF THE DUBAI STOCK MARKET
In March 2014 and almost to the day we timed the top of the Dubai stock market at 5000 and in the second quarter of 2018, in a post titled BUY DUBAI ! we timed the bottom of the market. Dubai’s and the UAE’s economies are evolving from a highly cyclical, Government investment induced economy to a more mature economy where economic dynamics have more to do with a stable population settling there and long term investments taking priority over oil, real estate and infrastructure developments. The sea-changes that are taking place in the Arab world led by Saudi Arabia since 2017 are paving the way for the emergence of a sizable emerging economic zone at the cross roads of Europe, the Indian sub-continent Africa and Asia.
• THE BOTTOMS OF THE GREEK STOCK MARKET
In 2016, we recommended to re-balance global portfolios in favor of European stocks and singled out the Greeek stock market as a strong candidate for outperfomance in the years ahead. Greece had gone through several years of re-structuring since its pubic finance bail out in 2010 and our analyis led us to conclude that the economy had completed its re-structuring and was ready to grow again. The Greek stock market rallied by 30 % in 2017 and again by 43 % in 2019, making it the best performing equity market this year.
Our Services
INSTITUTIONAL ADVISORY SERVICES
Mechelany Advisors acts as advisors to Private and Public Pension funds for the structuring of their retirement schemes and their dynamic asset allocation process, providing an independent source of macro-economic input.
These services are provided through tailor made mandates and positions of Investment Councils.
We also act as sub-advisors to fund management companies that run Global Asset allocation, Global equity and Asian equity funds. These funds have delivered significant outperformances and rank well amongst the top performing funds in 2018.
Mechelany Advisors acts as advisors to Private and Public Pension funds for the structuring of their retirement schemes and their dynamic asset allocation process, providing an independent source of macro-economic input.
These services are provided through tailor made mandates and Board positions on Pension Fund Investment Councils.
MECHELANY ADVISORS MEMBERSHIP
Through its www.mechelanyadvisors.com website, Mechelany Advisors brings its research and investment conclusions to the pubic in the form of a subscription that can be bought on a Monthly basis for US$ 99 / Month or on an Annual basis for US$ 999/annum.
Research
- Research Pieces on Specific Topics,
- Articles from News feeds that we see of Interest and that we single out,
- Our Weekly Market Review of the main Asset Classes, Currencies, Equities Bonds and Commodities including a technical overview of 80 different indexes, commodities and currency rates.
( A 50-pages report sent to our subscribers in .PDF Format every week) - Our Investment Bulletin produced every two or three weeks reviewing the key issues of the moments and fundamental articles about the financial, economic and geo-political scene
( A 20 to 40-pages report sent to our subscribers in .PDF Format when published)
Model Portfolio
Mechelany Advisors’ MODEL PORTFOLIO has been running in a fully transparent way since January 1st 2014 and as at 30th Sep 2019, it had delivered a 213 % cumulative performance since inception.
This represents an average performance of +21.98 % per annum over the 5 years and 9 months of its life, far outperforming the +4.59 % average return of the MSCI World Equity Index.
The purpose of Mechelany Advisors’ MODEL PORTFOLIO is to implement the investment conclusions of Mechelany Advisors’ research into a theoretical portfolio managed according to institutional standards in terms of diversification, quality of investments, liquidity and risk management.
It also abides by a philosophy of UNCONSTRAINED ASSET ALLOCATION whereby the traditional minimum and maximum allocations to various asset classes are non-existent as some asset classes must be avoided at times depending on the stage of the economic cycle we are in.
Mechelany Advisors’ MODEL PORTFOLIO has no particular objectives in terms of performances but believes that the management of assets should avoid losses and deliver positive returns every year, Since inception, the Portfolio never delivered less than 16 % performances per annum.
Mechelany Advisors Membership gives subscribers full access to our Model Portfolio positions and transaction flow as well as weekly comments on our investment strategy.
Investment Ideas
Mechelany Advisors Membership gives subscribers Full Access to our Investment Ideas and Analyses of individual stocks, currencies and commodities trades.
Our Investment Ideas enable subscribers to extract significant value from their annual subscription to our services as their fees are usually made back in one single trade with as little as US$ 10’000 investment.
SUB-ADVISORY SERVICES
Mechelany Advisors acts as sub-advisors to several fund management companies for the proviso of research and investment advice for several investment products and investment funds
These services are provided through tailor made research and sub-advisory mandates.
We currently act as sub-advisors to fund management companies that run Global Asset allocation, Global equity and Asian equity funds.
Major world-class financial institutions such as COMMERZBANK and EFG have launched investment certificates replicating our Model Portfolio to allow investors to benefit from its management process and perfomances as well as China – dedicated products such as
EFG GLOBAL PORTFOLIO Index Certificate Download the TERM SHEET
EFG GLOBAL YUAN PORTFOLIO Index Certificate Download the TERM SHEET
The Team
Jacques Mechelany, the founder of the company, has over 35 years of investment management and business development experience in banking and finance in Europe, the USA and Asia. He held senior executive positions in finance, running banks and investment management companies for prime financial groups including Bank of China, Banque Heritage, Union Bancaire Privée, Bank Julius Baer, Barclays Bank, KleinwortBenson and BAII.
Corporate Documents
Mechelany Advisors FZE Certificate of Incorporation
Mechelany Advisors FZE License
Older Research Publications
We reproduce below a selection of our research pieces published since 2014