Factsheet: January 2021
Strategy
The Fund's objective is to achieve optimal capital growth over the long term through the 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 mainly on activity of companies and their governance, financial structure and development prospects. The fund aims, above all, to identify companies with dominant positions, a significant reinvestment capacity and low debt.
The recommended investment horizon is 5 years. The reference currency is the Euro.
Markets
European markets experienced a hectic month in January, mainly due to the high volatility on the American markets caused by the 'Gamestop' crisis which led many managers to profit-take on safe investments on both sides of the Atlantic in order to absorb their losses.
In this context, the Euro Stoxx 50 lost 2.52%, the CAC 40 2.74% and the Stoxx Europe 600 0.71%, which we could qualify as a "digestion" period after the prolonged rise like we have experienced.
On the sectoral side, telecommunications (+3%) and technology (+3%) are in the lead. Conversely, banks (-2.6%) and insurance (-5%) are suffering from the market downturn.
The Fund
The fund resisted better than the main indices with a decline of -0.93% over the month.
The Dutch ASML semiconductor printing machine manufacturer continues its exceptional upward trend, with a staggering +12.94%, reflecting the rapid market penetration of its new extreme ultraviolet (EUV) printing technology.
Conversely, Christian Hansen (-11.11%) and Simcorp (-11.36%), two Danish companies, trailed behind, mainly due to lower than expected organic growth.
This period of market resilience, accentuated by the setbacks of certain funds, which are prone to short- selling in order offset their losses, should not hamper the growth prospects of our portfolio companies whose results will be published in February.
2021 began with its share of uncertainties. The good news is that massive vaccination campaigns have begun across the world and should bring a major breakthrough in the fight against the virus.
On the other hand, the unwavering support of the authorities should gradually diminish and reveal the shortcomings of certain companies and economies currently being supported.
Once again, innovation (inherent in a company's reinvestment capacity), quality (leadership positioning, high margins), and low debt will be essential characteristics to differentiate between resilient business models and distressed companies.
This is why we continue to apply the same rigor to our selection criteria, regardless of the sector rotation that is expected to continue in the markets. This consistent strategy allows us to start 2021 with confidence.
For more information, please email us: contact@fisconsult-sinews.com