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31/03/2024

Western equity markets continued to rise to new highs in March 2024 despite macroeconomic data that was globally positive in the US but more mixed in Europe. The MSCI All Country grew 2.9%*, led by Europe (+4.2%* for the Eurostoxx 50) and the United States (+3.1%* for the S&P 500). After rebounding in February, the Chinese market slowed, with the Hang Seng index rising 0.2%*. Cyclical stocks staged a comeback in March, with an outperformance in industry (+4.3%*), energy (+10.4%*) and banking (+4.7%*). There were disparities in tech stocks and the Nasdaq posted a mere 1.8%* gain. The market and the Fed are now closely aligned on expectations of three cuts, at the June, September and December meetings. In Europe, Eurostat data for March 2024 showed a drop in annual consumer price inflation to 2.4%. The market expects four ECB rate cuts by the end of 2024, with the first to come on 6 June. Trends in China are contrasted, with the government remaining focused on targeted support measures. The Caixin manufacturing PMI rose to 51.1 in March from 50.9 the previous month, outstripping analysts’ forecasts and expanding for the fifth consecutive month.
The fund gained 3.2% in February (C unit), bringing its year-to-date performance to 7.5%. Technology proved the worst contributor after several consecutive months as the best. The sector lagged in the US and corrected on certain Chinese stocks, including Vipshop, down 14% in March. The mining sector was the top contributor, driven in particular by our gold mining stocks. Newmont and Agnico Eagle gained 15% and 24% respectively over the month, making up in part for the cumulative underperformance as gold topped the $2,300 mark for the first time. In March, the equity component of the fund held steady at 68%. However, we went ahead with several transactions, still with the aim of reducing the most cyclical part of the portfolio in favour of companies with a more defensive profile. As such, we sold our entire position in Swiss industrial group ABB and significantly reduced our position in diversified mining company Teck Resources. At the same time, we increased our exposure to gold mining companies with Newmont and copper producers with the projects of NGEx Minerals and Filo Corp. In technology, we are taking profits by trimming companies having appreciated significantly recently (Facebook and Uber) and repositioning on Match Group. We believe the dating app market still has strong growth potential, both in usage and monetization.