The Strategic Europe Quality Fund returned 1.33% in December. The largest detractor to alpha was the allocation effect, mainly due to the Fund’s relative underweight to the Consumer Discretionary sector. Stock selection for the Materials sector was also a small drag on alpha, however, excluding Materials, stock selection contributed to alpha.
The top-performing sectors for the benchmark over the period were Materials, Information Technology and Consumer Discretionary; while Health Care and Communication Services were the bottom performing sectors.
For the European strategy, JDE Peets was the best performing stock. There were no noteworthy detractors for the Fund.
The Strategic Global Quality Fund returned 3.01% in December. Both sector allocation and stock selection detracted from alpha. The Fund’s relative overweight to the Consumer Staples sector was the main detractor, however, this was offset by positive stock selection and currency effect for the sector. Stock selection for the Information Technology sector was another detractor.
The top-performing sectors for the benchmark over the month were Materials, Information Technology, Consumer Discretionary and Financials; while Utilities, Real Estate and Industrials were the bottom performing sectors.
JDE Peets was also the top performer for the Global Fund and Fidelity National Information Services was the largest detractor over the month.
During December we made relatively few changes to the European strategy following the portfolio rotation in November. The Global strategy maintains its buy and hold approach. We have been encouraged by the roll out of vaccine programmes globally and the greater political stability; although, new infections rose significantly towards the end of December, partly driven by new variants of COVID, forcing governments to tighten restrictions. We expect some volatility over the next few months until the vaccine programme is rolled out on a larger scale.
The views and statements contained herein are those of Lofoten Asset Management in their capacity as Investment Adviser to the funds as of 22/01/2021 and are based on internal research and modelling. Please click on Disclaimer Page to view full disclaimers.