The Fund delivered a positive return and beat its reference indicator.
The Fund’s high allocation to risky assets (equities and bonds) shored up performance in good conditions for these assets.
The technology and gold sectors raised the performance of our equity component. However, our option hedges had a slightly negative impact.
The Fund’s modified duration increased during the month as we reduced our short position on Japanese bonds and raised our exposure to US short-term debt.
Global economies should hold firm over the coming months as stimulus remains high at a time of military and trade conflict.
We are keeping equity exposure relatively high at around 40%, and raised our modified duration back up a little in May.
Since Kristofer joined our team, we have added 13 new equity positions and relinquished five others.
Although he is keeping the emphasis on profitable trends in artificial intelligence and healthcare, he has diversified the portfolio all along the value chain.
We have reduced investments in momentum stocks with high price multiples, and this has decreased the portfolio’s average valuation.
North America | 58.4 % |
Europe | 21.4 % |
Asia | 15.5 % |
Latin America | 2.9 % |
Asia-Pacific | 1.8 % |
Total % Equities | 100.0 % |
Market environment
The United States and Europe are starting to diverge at macroeconomic and monetary policy levels.
Although the US economy remains firm, signs of cooling were observed in May.
In Europe, PMIs published during the month confirmed an improvement in economic activity.
This desynchronisation led to a sharp drop in US yields whereas the Eurozone trend was more upward, especially for the long end of the curve.
The downward trend for US interest rates helped growth stocks and narrowed spreads.
Nvidia continued to benefit from investors’ excitement about artificial intelligence after publishing its results.