Factsheet: February 2021
Strategy
The objective of the fund is to achieve optimal capital growth over the long term through active management of a portfolio of large-cap equities primarily based in a member country of the European Union or the European Economic Area.
The investment strategy is based on a fundamental analysis. The stock selection process is based on the activity of companies, their governance, financial structure and development prospects. The fund aims to identify companies with dominant positions, high reinvestment capacity and low debt.
The recommended investment horizon is 5 years. The reference currency is the euro.
Markets
The European markets were bullish in the month of February, with the Euro Stoxx 50 gaining 1.60%, the CAC 40 5.63% and the Stoxx Europe 600 2.31%.
An upward trend is expected for companies most severely affected by the crisis, and whose horizons seem clearer due to the large-scale vaccination campaigns. This momentum is reflected in a significant sector rotation, anticipating a rebound in these sectors, with massive profit-taking on resilient companies being redirected towards certain stocks which are still in the red. At the same time, inflationary fears are emerging due to the slight rise in 10-year rates.
On the sectoral side, the winners include travel and leisure (+15%) and banks (+15%) whilst utilities (-5%) and health (-3%) are in decline.
The Fund
The fund is slightly down by 1.02%, mainly due to the significant sector rotation. Although the fund is not exposed to companies that are the most vulnerable to this rotation, the impact of the movement was nevertheless felt on some stocks in the portfolio, who were victims of profit-taking, which benefitted the sectors that suffered the most in 2020, and are now recovering strongly.
Although this period of uncertainty may continue for some time, we remain confident in our management philosophy and the quality of our portfolio companies, which are still characterised by strong earnings, low debt and strong growth prospects. We therefore do not foresee any major rebalancing in the short-term.
Among the good performers are Temenos (+7%), the Swiss banking software specialist, which was previously lagging behind, and Alpha Laval (+7%), which we have just bought. Conversely, Unilever (-9%) and Givaudan (-8%) had a difficult month.
Although this period of uncertainty may continue for some time, we remain confident in our management philosophy and the quality of our portfolio companies, which are still characterised by strong earnings, low debt and strong growth prospects. We therefore do not foresee any major rebalancing in the short-term.
For more information, please email us: contact@fisconsult-sinews.com