The Strategic Europe Quality Fund returned 0.9% in August. Stock picking in the Consumer Discretionary and Energy sectors generated the most alpha during the month. The largest detractor was the Funds relative overweight to the Consumer Staples sector, but the Health Care sector also impacted returns, due to a combination of an overweighting to the sector and stock selection.
The top performing sectors for the benchmark over the period were Consumer Discretionary, Industrials, Materials and Information Technology; while the bottom performing sectors were Utilities, Health Care and Consumer Staples. The largest contributors to alpha in August were SBM Offshore, InterContinental Hotels Group and SIG Combibloc. There were no noteworthy detractors to alpha over the period for the European Fund.
The Strategic Global Quality Fund returned 4.9% in August. The Health Care and Materials sectors were noteworthy positive contributors. Sector allocation was the main detractor, mostly due to the Fund’s relative overweight to the Consumer Staples sector. Stock selection in the Consumer Staples and Information Technology sectors also detracted from returns in August.
The top performing sectors for the benchmark over the month were Consumer Discretionary, Information Technology and Industrials; while Utilities, Energy and Health Care were the bottom performing sectors. For the Global Fund, SIG Combibloc was the main contributor to alpha and Nomura Research Institute was the largest detractor.
We remain cautious as many economic and political risks persist, and more volatility is likely towards the end of the year. With this in mind, we will maintain a defensive view, preferring to invest in high-quality companies for the most part, that we believe will be better placed to endure any future market volatility.
The views and statements contained herein are those of Lofoten Asset Management in their capacity as Investment Adviser to the funds as of 16/09/2020 and are based on internal research and modelling. Please click on Disclaimer Page to view full disclaimers.