1st quarter 2023

Economic and financial environment

- Economy

The global economy showed resilience in the first quarter, with service activities in particular continuing to benefit from robust demand. Growth concerns returned to the forefront towards the end of the quarter, following the release of weak economic indicators in the US and tensions in the banking sector. In the coming months, these concerns are likely to intensify due to the impact of monetary tightening by central banks and the increasing reluctance of banks to extend credit.

Inflation rates continued to ease during the quarter. In the United States, the inflation rate fell from 6.5% in December to 5% in March. Excluding energy and food, however, inflation was tenacious, falling only from 5.7% to 5.6%. Central banks continued their monetary tightening, with the Federal Reserve and the European Central Bank raising their key rates by 50 and 100 basis points respectively in two steps.

- Financial markets

After their decline in 2022, the financial markets rebounded in the first quarter. The month of January was particularly strong. Falling inflation suggested that central bank monetary tightening would soon end, while persistent signs of resilient economic activity fueled expectations of a soft landing for the global economy. February was more difficult, due to less favorable inflation figures, reflecting in particular the tenacity of core inflation (excluding energy and food). March was then marked by tensions in the banking sector. While these tensions weighed heavily on bank stocks and led to a slight decline in the European market, they did not prevent the global equity index from continuing to rise, helped by the decline in bond rates. For the first quarter as a whole, the European markets were the best performers, while the Asian markets lagged somewhat.

Within the stock markets, the decrease in investor risk aversion and the decline in bond yields particularly benefited growth stocks, especially technology stocks. At the other end of the spectrum, sectors generally associated with the value style were neglected. The fall in oil prices weighed on the energy sector, the collapse of Silicon Valley Bank in the United States and the takeover of Credit Suisse in Europe on the financial sector, and growing concerns about US growth on the basic materials sector. The MSCI World Growth Index outperformed the MSCI World Value Index by 13% in the first quarter, after underperforming by nearly 25% last year.

Positioning and recent portfolio changes

The manager did not make any major changes to the asset allocation during the quarter. The weighting of the equity portion thus remained stable, hovering around 70%. The manager maintained a 25% equity hedge through the sale of futures on the S&P 500, Euro Stoxx 50 and SMI indices. The weighting of the bond component was increased slightly following the rise in interest rates in February, from 10% to almost 12%. The weighting of the gold component remained stable at around 14%.

In terms of individual stocks, the weighting of certain stocks was adjusted slightly following their performance. The good performance of stocks such as SAP, Novo Nordisk or LVMH was used to reduce these positions somewhat, while the opposite was true for stocks such as Enbridge, Givaudan or Logitech. Positions in Adobe, Alphabet, Mastercard and Christian Hansen were sold during the quarter and five new stocks were added to the portfolio: Canadian National Railway (railroads), Edwards Lifesciences (healthcare), Equifax (credit software), Nomura Research Institute (consulting) and Pembina Pipeline (energy transmission).

Within the gold portfolio, the share of royalty companies has been increased at the expense of producers.

In terms of the regional allocation of the equity portion, the fund has maintained a significant exposure to Asia. Conversely, the weighting of the US market remains significantly lower than in the MSCI World index.


Note: Performance data net of fees (B units) in EUR. Past performance is not a guide to future performance. References to a market index or peer group are for comparison purposes only; the market index is not mentioned in the sub fund's investment policy.
Source: BLI/Lipper.

3 months 1 year 3 years 5 years
Fonds 2,7% -5,5% 14,3% 27,9%
Lipper Global Mixed Asset EUR Balanced 2,4% -6,1% 12,5% 5,8%

The fund returned 2.7% for the quarter, with positive performances in January and March. February was more difficult, with rising bond yields weighing on bonds and gold in particular. The absence of banking stocks in the portfolio meant that the fund was not affected by the problems in this sector in March.

At the asset class level, equities, bonds and gold had a positive impact on performance, while equity hedging and currencies had a negative impact.

At the level of individual values, several gold companies are among the top positive contributors, as well as Alibaba, SAP, TSMC, LVMH and L'Oréal.
Among the main negative contributors are pharmaceutical companies Roche, Johnson & Johnson and Gilead, as well as Recruit, Enbridge, Travelsky and Thai Beverage.


The impact of the monetary tightening started by the central banks in March last year is becoming increasingly visible. The economic slowdown should therefore continue, and a recession seems possible in the second half of the year or at the beginning of 2024. If this were the case, the stock markets would risk a second downward movement linked to the contraction of earnings, whereas last year's was linked to the contraction of multiples. In such an environment, government bonds and gold should continue to do well.

The manager therefore continues to maintain a defensive bias and not to make any concessions in terms of the quality of the assets held.

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