Year to date performance overview
Note: Performance data net of fees (B units) in euros at 31 August 2022. 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.
Sources: BLI/Lipper.
On a YTD basis, in a market environment marked by a particularly tense geopolitical environment, very high inflation and a drastic change in tone on the part of the central banks, the Fund generates a performance slightly higher than that of its peer group.
YTD | 3 years | 5 years | |
BL Global Flexible EUR | -7.5% | 8.5% | 24.5% |
Peer group * | -9.1% | 4.4% | 5.6% |
Overall, since the beginning of the year, the portfolio's low bond weighting in a context of rising rates and the hedging of part of the equity exposure have contributed positively to performance. Investments in gold stocks weighed on the Fund's performance.
Portfolio positioning
Asset allocation
At 31 August 2022, the portfolio was exposed to equities for 74.5% gross (on 70 positions) and 48.73% net (after hedging by US, Eurozone and Switzerland equity indices). These hedges were initiated in March after the Russian invasion of Ukraine and slightly strengthened in June and July.
Bond investments remain limited (7%) while gold stocks represent 12.11% of the portfolio and cash 6.45%.
Recent transactions
In a declining equity market, the equity component was actively managed according to stock selection opportunities, notably by strengthening certain positions during price weakness while new companies entered the portfolio: Amazon, Aptar Group, Jack Henry & Associates, Kerry Group, Logitech, Disco Corp, Terumo (January), Novartis, Hong Kong Exchanges (March), Verisign (May), Daifuku, Hoya and Recruit Holdings (June).
In terms of sales, several stocks left the portfolio: Essity, Jardine Matheson, Orion, Kimberly Clark de Mexico (January), CK Asset Holdings, CP All, Otsuka, Santen Pharmaceutical, SATS, Want China (February), Diageo, Tencent Holdings (March), Pernod Ricard, Calbee (April), Femsa, Grifols, Jack Henry and Netease (June).
While Newmont Mining, SSR Mining were sold, the Fund Manager took advantage of the weakness in gold prices to increase the weighting of Agnico Eagle, Franco Nevada, Wheaton Precious Metals and Royal Gold.
The bond allocation was slightly increased during the first half of the year, taking advantage of the weakness of the bond markets (in April and May) and opportunities in inflation linked bonds.
Conclusion
After a historic correction in the first half of the year, the global equity market rebounded strongly in July, rising by just over 9% in euros before losing just over 2% in August.
Two important factors contributed to this rally of risky assets in July. On the one hand, the publication of generally reassuring quarterly corporate results. On the other hand, the slight decline in inflation recorded in the United States in July. This slight decline in price growth in the United States was interpreted favorably by the markets, supported by the idea that inflation has reached its peak.
However, the central bankers in the main developed countries recalled their determination to continue tightening monetary policies, which led to a reversal of the trend in August.
The equity component, which now accounts for 74.5% (gross) and 48.8% (net) of the portfolio, remains the main contributor to the portfolio's long-term performance. It is composed of quality securities with complementary profiles combined according to the market context (secular growth, attractive valuation, defensive character). In addition, positions in cash, long dated sovereign bonds and gold companies are maintained to protect the portfolio during more difficult periods for equities.