The Fund delivered a positive return but trailed its reference indicator.
It benefitted from favourable conditions for risky assets, largely through our equity and credit investments.
Our hedging had a negative impact and explains the underperformance.
The rise in European yields also proved slightly detrimental.
European economies should hold firm over the coming months and be accompanied by more accommodative monetary policy, which is why we are keeping risky asset exposure high.
However, we realise that these assets have done very well this year and become somewhat saturated.
This calls for a degree of caution and explains why we have bought some options, which were trading very cheaply after volatility eased.
Europe | 100.0 % |
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.