Generating alpha through the recovery

The Strategic Europe Quality Fund returned +2.43% in April, outperforming its index by 0.36%. Stock selection was the main contributor to return, it was particularly strong for the Health Care sector. The Consumer Staples sector was also a noteworthy contributor to alpha over the month, driven both by the Fund’s relative overweight to the sector and by stock section. The main detractors for the period were the Energy and Financials sectors.

MONATLICHER FONDSKOMMENTAR
19 Mai 2021

The Strategic Europe Quality Fund returned +2.43% in April, outperforming its index by 0.36%. Stock selection was the main contributor to return, it was particularly strong for the Health Care sector. The Consumer Staples sector was also a noteworthy contributor to alpha over the month, driven both by the Fund’s relative overweight to the sector and by stock section. The main detractors for the period were the Energy and Financials sectors.

The top performing sectors for the benchmark over the period were Information Technology and Real Estate, while Energy was the bottom performing sector.

The Strategic Global Quality Fund returned +6.78% in April, outperforming its index by 2.13%. Similar to the European Fund, stock selection over the month delivered significant alpha, particularly from the Consumer Staples, Industrials and Information Technology sectors. The only significant detractor was the Funds relative overweight to the Consumer Staples sector.

The top performing sectors for the benchmark over the month were the Communication Services and Real Estate Sectors, while Energy was the bottom performing sector.

There were no significant stock moves on either strategy over the month.

Market Outlook

We expect to see a strong economic recovery in the short term as economies begin to reopen. That said, longer-term inflation is a risk; we will be watching to see how this develops. Valuations in certain parts of the market are expensive.

As always, we invite investors and prospective investors, to get in touch should you wish to discuss the positions held in the portfolio. Please do not hesitate to contact us for further information.

Adam TurbervilleAdam Turberville
Director
+44 1481 742380
a.turberville@ericsturdza.com

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The views and statements contained herein are those of Lofoten Asset Management in their capacity as Investment Adviser to the funds as of 13/05/2021 and are based on internal research and modelling. Please click on Disclaimer Page to view full disclaimers.