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.
Equity markets declined in March (MSCI Europe NR -4.0%, MSCI USA NR -5.9%) and ended the quarter in dispersed order (MSCI Europe NR +5.9%, MSCI USA NR -4.6%). European indices, whose valuations at the end of February had exceeded the historical average for the first time in 3 years and the invasion of Ukraine, logically “retraced” part of the spectacular rally observed since the second half of December in a troubled international political context. In the United States, the decline continues as economic statistics deteriorate significantly, unlike in Europe. Fundamental stock market normalization therefore remains at the heart of the current market dialectic. Geographically, the overvaluation of the United States is gradually receding, while Europe is now trading at fair value. Stylistically, the Value segment continues its fine run and is also gradually reducing the valuation discount still observable at this stage. The only thing missing is for small and mid caps to confirm their revival after a good month of March in relative terms in Europe.
Digital Stars Europe Acc posted a -4.2% return in March, in line with the MSCI Europe NR at -4.0%.
The fund’s sector and geographical positioning remained once again well oriented over the month, offsetting the underperformance of mid caps. Among the top contributors were financials (Talanx, Banca Mediolanum) and defence stocks (Kongsberg, Rheinmetall, MilDef). Among the worst performers were British stocks (ICA, Burberry, Trustpilot). The portfolio reviews carried out in March were diversified, mainly increasing our positions in the finance and IT sectors. Among the exits were mainly companies from the consumer staples and healthcare sectors. Digital Stars Europe is still significantly overweight finance and industry, and underweight consumer staples and healthcare. The UK saw its weight reduced to 21.8%, but it remains the fund’s top weight, ahead of Italy (biggest overweight) at 18.1% and Germany at 11.1%. With a 5.8% weight, France remains the largest country underweight.
Digital Stars Continental Europe Acc ended March at -1.5%, vs. -4.3% for the MSCI Europe ex UK NR.
The fund’s sector and geographical allocation was once again favourable in March, offsetting the underperformance of mid caps. It was primarily the individual contributions of some of our stocks that made the difference, particularly in finance (Talanx, Banca Mediolanum) and defence (Kongsberg, MilDef), as well as the absence of certain large caps from the index. The portfolio reviews carried out in March were diversified, mainly increasing positions in finance, consumer discretionary and materials. Among the exits were mainly stocks in the consumer staples and real estate sectors. Digital Stars Continental Europe is overweight in finance, industry and real estate, and underweight in consumer staples, healthcare and IT. Italy (first overweight) is still the fund’s top weight at 20.6%, ahead of Sweden at 15.7% and Germany at 13.1%. With a 8.4% weight, France remains the largest country underweight.
Digital Stars Eurozone Acc posted a -2.2% return in March, ahead of the MSCI EMU NR at -3.1%.
In March, the fund benefited from its overweight position in the financial sector, its underweight position in semi-conductors, its small-cap profile and a number of positive earnings reports (Puuilo, SPIE, Talanx, etc.). The portfolio reviews carried out in March were marked by a significant increase in the finance sector. Among the exits were mainly real estate, industry, media and consumer discretionary stocks. The consumer discretionary sector remains the fund’s main overweight, ahead of finance and real estate. The fund is underweight in consumer staples, materials, energy and industry. Italy becomes the fund’s largest weighting at 23.1%, followed by France at 22.0% and by Germany at 19.8%. Italy remains the most overweight country, and France the second most underweight ahead of the Netherlands.
Digital Stars Europe Smaller Companies Acc ended March at -1.2%, outperforming by +2.0% the MSCI Europe Small Cap NR (-3.2%).
The fund’s good performance in March was mainly due to good earnings announcements from portfolio holdings such as Friedrich Vorwerk Group and Theon International. Portfolio reviews in March diversified, increasing mainly positions in materials, as well as in consumer discretionary, finance and industry. Among the exits were mainly media, consumer staples, energy and IT stocks. The portfolio is now mainly overweight in finance and industry, and underweight in real estate and IT. The UK (most underweight country) remains the portfolio’s largest weighting at 16.8%, ahead of Italy (largest overweight) at 14.6% and Sweden at 14.3%.
Digital Stars US Equities Acc USD ended March down -7.4%, vs. -5.9% for the MSCI USA NR and -6.4% for the MSCI USA Small Cap NR.
Despite the fund’s good sector positioning, with an overweight in financials and industrials and an underweight in technology, the all-cap exposure and the correction in some technology stocks that had outperformed strongly in recent months led to an underperformance in March. The portfolio review carried out in March was fairly diversified, with the integration of finance, consumer discretionary and healthcare stocks, and the exit of companies from the IT and industry sectors. The fund is heavily overweight in finance, as well as in industry and consumer discretionary. The most underweight sectors remain IT and the media.
