Strong performance in Q3 for the Fund with a 10.2% return


Fund Commentary
18 Oct 2016


European financial markets were definitely more volatile in September in a month heavily influenced by central banks’ meetings and decisions (US, Japan). The Fund’s benchmark posted a slight contraction of -0.11% after a relatively quiet summer period post the Brexit vote trauma. Over the quarter, the EuroStoxx 600 Net Return recorded a +4.38% performance, enabling it to recoup close to half of the losses since 1st January and reduce the year to date downturn to -4.81%.

In that context, the Fund recorded a satisfactory +2.67% return in September, outperforming its benchmark by 2.78% for the month. In the third quarter, the Fund’s performance was +10.22% translating into a 5.84% outperformance and since 1st January, the performance stands at +7.00%, an 11.81% outperformance versus its benchmark index.

Trigano was the most significant contributor, followed, this month, by Tarkett and Saf-Holland. At the other end of the spectrum, Barco, Norma and Elis were the three main detractors. During the month, the Investment Adviser added one new position to the Fund: Metall Zug from Switzerland.

In the previous monthly commentary, the Investment Adviser wrote: “Some key points or data will need to be monitored in the coming weeks: any change of tone from the Fed and a potential interest rate increase before year end, GDP releases and employment data in the US, an ECB decision to extend its QE program, an EU project to be presented by European political leaders to cope with the Brexit vote and reinforce European cohesion, and finally OPEC’s decision with regards to oil production.” We got some partial answers to some of those questions in the past month, some remain unanswered and new ones arose recently, enough to keep us busy and prudent until year end.

In the coming months, the Investment Adviser will try to benefit from the volatility created by uncertainties in European financial markets. As demonstrated by the positive year to date performance, capital preservation is paramount in the investment process deployed by the Investment Adviser. This means that downside risk is more heavily weighted than upside reward when investment decisions are taken, and this shall continue.


The views and statements contained herein are those of Pascal Investment Advisers SA in their capacity as Investment Adviser to the Fund as of 13/10/16 and are based on internal research and modelling.