As every month, you can read our investment report, in which we offer you a macroeconomic analysis of the market, a presentation of the performance of our funds and their results.
You can also watch our video update on the Digital Funds range.
July proved to be fairly calm by recent volatility standards (MSCI Europe NR +0.7%, MSCI USA NR +2.3%). While the traditional quarterly earnings season got off to a positive start, investors’ attention was focused on the outcome of tariff negotiations and the Fed meeting at the end of the month. The announcement of an agreement between the United States and the European Union was greeted with relief that sometimes bordered on complacency, especially as the US Fed’s tone proved to be rather hawkish despite the pressure exerted by the White House.
The stock selection process for our European equity strategies contains three inflection point smoothing mechanisms, designed to detect periods of overheated momentum, either in our funds or in the market. One of these mechanisms has just crossed a threshold, indicating that some of our holdings were excessively polarised towards overheating trends. This triggered an adjustment in the “Price Momentum” sub-portfolio of our European strategies, resulting in partial profit-taking in the defence and financial sectors in favour of more diversifying and defensive sectors. As the trigger materialised from 01/07/2025, the resulting transactions are part of the portfolio reviews described below. The impact of this mechanism is now fully reflected in the monthly reports at the end of July. If you would like more information, feel free to contact us.
Digital Stars Europe Acc posted a +2.4% return in July, outperforming the MSCI Europe NR by +1.7%. Since the start of the year, the fund has outperformed its index by +7.5%.
Small and mid caps, which are well represented in the fund, performed very well in July in relative terms. The fund’s sector allocation was still well-orientated, especially thanks to the overweight in finance. Banks particularly stood out, with BPER, Banco de Sabadell, BPM and Société Générale. In the financial services, Just Group rose by +65% on the announcement of the buyout offer from Brookfield. The fund also benefitted from the strong earnings publications of other stocks like Accelleron Industries, Exail Technologies or Friedrich Vorwerk. The portfolio reviews carried out in July included the smoothing mechanism. They were diversified, mainly increasing our positions in the consumer discretionary sector, as well as in IT and utilities. Among the exits were mainly companies from the defence and finance sectors. Digital Stars Europe is still significantly overweight finance, and underweight healthcare and consumer staples.
The UK remains the fund’s top country weight with 22.0%, ahead of Germany at 14.0% and Italy (largest overweight) at 12.3%. With an 10.0% weight, France remains the largest country underweight.
Digital Stars Continental Europe Acc ended July at +2.2%, vs. 0% for the MSCI Europe ex UK NR. Since the start of the year, the fund has outperformed its index by +12.8%.
The outperformance of small and mid caps continued to significantly support the fund in July. The fund’s good sector allocation contributed positively in relative terms, with the overweight in finance. The underperformance of defence stocks (reduced at the beginning of the month) was more than offset by the solid performance of banks like Société Générale, Swissquote, BPM or BPER. The fund also benefitted from strong earnings publications of companies like Exail Technologies, Friedrich Vorwerk or R&S Group. The portfolio reviews carried out in July included the smoothing mechanism. They were diversified, mainly increasing positions in consumer discretionary, as well as in IT and consumer staples. Among the exits were mainly stocks in the defence and finance sectors. Digital Stars Continental Europe is overweight in finance, as well as in real estate. The fund is underweight in healthcare and consumer staples. Germany represents the fund’s largest country weight at 17.2%, ahead of Italy (first overweight) at 14.1%, and France at 14.0% (which remains the largest country underweight).
Digital Stars Eurozone Acc posted a +1.9% return in July, beating the MSCI EMU NR by +0.9%. Since the start of the year, the fund has outperformed its index by +3.4%.
The fund’s good sector positioning, in particular its overweight in banks and underweight in semi-conductors, contributed to a good month of July. The fund was also supported by positive individual contributions, following the earnings publications at the end of the month. The portfolio reviews carried out in July included the smoothing mechanism. They were diversified, mainly increasing the positions in the IT, consumer discretionary and consumer staples sectors. Among the exits were mainly finance and industry stocks. The financial sector remains the fund’s main overweight, ahead of real estate and consumer discretionary. The fund is underweight in the industry, consumer staples and IT sectors. Italy remains the fund’s largest weighting at 23.5%, followed by Germany at 19.2% and France at 19.1%. Italy is the most overweight country and France the second most underweight.
Digital Stars Europe Smaller Companies Acc ended July at +2.9%, outperforming by +1.8% the MSCI Europe Small Cap NR (+1.1%). Year-to-date, the fund has outperformed its index by +8.3%.
The fund’s good performance in July was due to its good positioning, with an overweight position in financials and an underweight position in property. Good earnings announcements from stocks in a variety of sectors (Friedrich Vorwerk Group, Cicor Technologies, R&S Group Holding, Dometic Group, etc.) also made a positive contribution to the month’s performance. The portfolio reviews carried out in July included the smoothing mechanism. They were diversified, mainly increasing positions in consumer discretionary and IT stocks. Among the outflows were mainly stocks from the finance and industry sectors. The portfolio is now mainly overweight finance, IT and industry, and underweight real estate. Germany becomes the largest country weight at 19.0%, ahead of the United Kingdom (the most underweight country) at 16.5%, and Switzerland at 11.6%.
Digital Stars US Equities Acc USD ended July at 0%, vs. +2.3% for the MSCI USA NR and +2.0% for the MSCI USA Small Cap NR. Since the beginning of the year, the fund is -3.8% behind its index.
Against a backdrop of contrasted earnings announcements in July, the good performance of the fund’s industrial stocks, such as Comfort Systems USA, was not enough to offset the impact of the fund’s overweighting of the financial sector and underweighting of the technology sector. The rebalancing carried out in July was fairly diversified, with the inclusion of consumer discretionary, finance and healthcare, and the divestment of industry, real estate and media stocks. The fund is heavily overweight in financials and industrials. The most underweight sectors remain IT and media.
