A tilt to cyclical and value stocks

The Strategic Europe Quality Fund returned -7.15% in October. The largest detractors from alpha were the Information Technology and Consumer Staples sectors, primarily due to stock selection.

Monthly Fund Commentary
26 Nov 2020

The Strategic Europe Quality Fund returned -7.15% in October. The largest detractors from alpha were the Information Technology and Consumer Staples sectors, primarily due to stock selection.

The best performing sectors for the Fund were Materials and Energy, also due to stock picking. The best performing sectors for the benchmark over the period were Communication Services, Utilities and Consumer Discretionary; while the worst performing sectors were Information Technology, Health Care and Energy.

SIG Combibloc and SBM Offshore were the largest contributors to alpha, with SAP the largest detractor.

The Strategic Global Quality Fund returned -6.16% in October. The largest detractor from alpha was stock selection in the Information Technology and Consumer Staples sectors.

The best performing sectors for the benchmark over the month were Utilities, Communication Services and Financials; while Energy, Information Technology and Health Care were the worst performing sectors.

The only noteworthy stock specific move was SAP, which detracted from return.

Both Funds remain invested in SAP as we believe the share price will recover and the investment case remains intact.

Market Outlook

We will tilt some of the portfolio towards more cyclical and value names in light of recent political developments and on the basis of a potential vaccine and further stimulus.

The views and statements contained herein are those of Lofoten Asset Management in their capacity as Investment Adviser to the funds as of 18/11/2020 and are based on internal research and modelling. Please click on Disclaimer Page to view full disclaimers.