Quality returns alpha

The Strategic Europe Quality Fund returned +3.41% in May, outperforming its index by 0.85%. Stock selection was the main contributor to return, it was particularly strong for the Communication Services and Consumer Discretionary sectors.

MONATLICHER FONDSKOMMENTAR
17 Jun 2021

The Strategic Europe Quality Fund returned +3.41% in May, outperforming its index by 0.85%. Stock selection was the main contributor to return, it was particularly strong for the Communication Services and Consumer Discretionary sectors.

There were no noteworthy detractors for the period.

The best performing sectors for the benchmark over the period were Consumer Discretionary, Financials, Real Estate, Consumer Staples and Energy, while the Information Technology, Utilities and Communication Services were the bottom-performing sectors.

The Strategic Global Quality Fund returned +2.33% in May, outperforming its index by 0.89%. Similar to the European Fund, stock selection over the month delivered significant alpha, particularly the Communication Services and Consumer Discretionary sectors.

The best performing sectors for the benchmark over the month were the Energy, Financials and Materials sectors, while the Consumer Discretionary, Information Technology and Utilities sectors were the bottom performers.

The Consumer Staples sector also contributed to alpha, due to both the Fund’s relative overweight to the sector and currency effect.

The only noteworthy detractor to alpha over the period was the Fund’s relative underweight to the Financials sector.

The best-performing stocks for both the European and Global strategies were JC Decaux and Kering, there were no notable detractors during the month for either strategy.

Market Outlook

We expect to see a strong economic recovery in the short term as economies begin to reopen. Longer-term inflation is a risk; we will watch to see how things develop. 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 11/06/2021 and are based on internal research and modelling. Please click on Disclaimer Page to view full disclaimers.