The Strategic Europe Quality Fund returned +5.97% in March. The main detractor to alpha was stock selection for the Consumer Staples sector, however, this was partially offset by the Funds relative overweight to the sector. Stock selection for the Financials sector was a noteworthy contributor to alpha.
The best performing sectors for the benchmark over the period were Consumer Staples, Communication Services, Consumer Discretionary and Industrials; while Energy, Health Care and Real Estate were the worst-performing sectors.
The Strategic Global Quality Fund returned 3.18% in March, in line with its index. Sector allocation was the main driver of return, primarily due to the Fund’s relative overweight to the Consumer Staples sector. Stock picking for the Consumer Discretionary sector was also a positive driver.
The best performing sectors for the benchmark over the month were Utilities, Consumer Staples and Industrials; while Information Technology, Communication Services, Energy and Health Care were the worst-performing sectors.
For both strategies, JDE Peet’s was the only noteworthy detractor, the Funds remain invested as the investment case remains solid.
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 be monitoring this to see how things develop. From our perspective, 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.
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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 19/04/2021 and are based on internal research and modelling. Please click on Disclaimer Page to view full disclaimers.