Factsheet: February 2021
Strategy
The Fund's objective is to achieve optimal long-term capital growth through an active management of a portfolio of large-capitalisation stocks based primarily in North America.
The investment strategy is based on a fundamental analysis. The stock selection process is based in particular on the activities of the companies, their governance, financial structure and development perspectives. The fund aims above all to identify companies with dominant positions, with a significant reinvestment capacity and low levels of gearing.
The recommended investment period is 5 years. The reference currency is the US Dollar.
Markets
Amid rising rates on 10-year bonds, related to concerns about inflation, and encouraging signs about the pandemic, thanks to vaccinations, the US markets witnessed a mixed month of February. The S&P 500 gained 2.61%, the Dow Jones Industrials 3.17% whilst the NASDAQ 100 stagnated, losing 0.12%.
It was mainly from a sectoral point of view that the month showed real differences. The cyclical sectors, having suffered the most from the crisis and therefore often the most sensitive to a possible global re-opening, proved to be the big winners of this sectoral rotation, with the casino group (+31.50%), hotels (+30.50%) and airlines (+29%) particularly performing well.
On the other hand, the most resilient sectors in 2020 suffered from massive profit-taking, which were reinvested in stocks on the rebound. It should also be noted that the automotive sector, despite its cyclical nature, had a very complicated month (-11.90%), mainly due to Tesla, which fell significantly after an exceptional year in 2020.
The Fund
The fund gained 5.78% and outperformed the indices. Several companies recorded strong performances during the month, such as Estée Lauder (+24%), PayPal (+15%) and Alphabet (+14%), following their publication of exceptional results. On the other hand, McCormick (-9%), Verisik Analytics (-9%) and PepsiCo (-4%) were disappointing.
It seems that the concerns about inflation have primarily affected companies whose valuation is based more on growth potential than on their ability to generate profits in the short term. Although we are not directly exposed to these types of companies, it is not unlikely that some of our stocks, particularly in the technology sector, will go through a challenging period as a result of these uncertainties and ongoing sector reallocations.
Nevertheless, we maintain our investment strategy and remain focused on stable, low-debt and profitable companies with real growth potential.
For more information, please email us: contact@fisconsult-sinews.com