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.
The month of November, whose most significant event was Donald Trump’s victory in the US presidential election, proved highly volatile, particularly for European equity markets, which nonetheless ended slightly up (MSCI Europe NR +1.1%), but lagging behind US indices (MSCI USA NR +6.2%).
The frequency with which political news weighs on markets has clearly accelerated since the Lehman Brothers crisis. A source of short-term volatility, it is also a source of longer-term opportunities. Events often contradict a general feeling of “the moment”, tetanized by risk alone, and all too quickly sweep aside positive counterbalances. Who could have predicted in 2011 that by 2024 Greece would be financing itself on the same terms as France, or that Italy’s unemployment rate would be lower than Germany’s? In 2016, the reaction of the financial markets also contradicted the alarmist forecasts of some commentators during the Brexit vote, just as it did during Mr. Trump’s first accession to power.
Fundamental, cyclical and behavioural elements remain supportive at this stage, with a sustained economic momentum, an accommodating central bank pivot, attractive valuations in Europe and buoyant seasonality, all of which give reasons to hope that the stock market rally will continue in the coming months.
Digital Stars Europe Acc posted a +1.1% increase in November, in line with the MSCI Europe NR. The fund is up +14.6% since the beginning of the year, outperforming its index by +5.5%.
The fund’s sector positioning was favourable and enabled it to weather well the difficult post-election backdrop. In particular, the overweight of industrials and financials and the underweighting of healthcare, consumer staples and consumer discretionary, made a positive contribution in relative terms. But the strong performances of our financials (3i Group, Talanx, NatWest) and cement stocks (Heidelberg, CRH) contrasted with the declines in some other stocks, particularly certain semiconductor stocks which were hit hard by the US decision to ban all trade with Chinese chipmakers. The portfolio reviews carried out in November were diversified, mainly increasing our positions in the finance and consumer discretionary sectors. Among the exits were mainly companies from the IT and industry sectors. Digital Stars Europe is significantly overweight industrials and financials, and underweight healthcare, consumer staples and consumer discretionary. The UK has been significantly reinforced and remains the fund’s top weight at 25.5%, ahead of Italy (first overweight) at 15.3% and Germany at 10.8%. With a 5.0% weight, France remains the largest country underweight.
Digital Stars Continental Europe Acc ended November at +0.4%, outperforming by +0.3% the MSCI Europe ex UK NR (+0.1%). The fund is up +13.2% since the beginning of the year, outperforming its index by +5.9%.
The fund’s sector positioning was favourable and enabled it to weather well the difficult post-election backdrop. In particular, the overweight of industrials and real estate and the underweighting of consumer staples, consumer discretionary and healthcare, made a positive contribution in relative terms. But the strong performances of our financials (Swissquote, Talanx, Banco BPM) and cement stocks (Buzzi, Heidelberg, CRH) contrasted with the declines in some industrials (NKT, Nexans) and also certain semiconductors which were hit hard by the US decision to ban all trade with Chinese chipmakers. The portfolio reviews carried out in November were diversified, mainly increasing positions in finance. Among the exits were mainly stocks in the materials sector (chemicals and paper), as well as in industry and IT. Digital Stars Continental Europe is overweight in industrials and real estate, and underweight in healthcare, consumer discretionary, consumer staples and IT. Italy (first overweight) is still the fund’s top weight at 17.3%, ahead of Switzerland at 14.1% and Germany at 13.6%. With a 7.2% weight, France remains the largest country underweight.
Digital Stars Eurozone Acc achieved -0.3% in November, vs. +0.1% for the MSCI EMU NR. The fund is up +13.4% since the beginning of the year, outperforming its index by +5.4%.
The fund’s sector positioning was favourable: the overweighting of financials and the underweighting of technology and consumer staples practically offset the overweighting of small- and mid-cap stocks. The portfolio reviews carried out in November were marked by increased positions in the utilities and healthcare sectors. Among the outflows were mainly industrial and media stocks. Finance remains the fund’s main overweight, ahead of real estate, media, consumer discretionary and industrials. The fund is underweight in the consumer staples, utilities, materials and energy sectors. Germany represents the largest weighting at 22%, followed by Italy at 20.1% and France at 19.7%. Italy remains the most overweight country, and France the most underweight.
Digital Stars Europe Smaller Companies Acc ended November up +1.0%, vs. +1.2% for the MSCI Europe Small Cap NR. The fund is up +15.9% since the beginning of the year, outperforming its index by +10.0%.
The fund’s sector positioning was favourable: the overweighting of financials and the underweighting of technology and consumer discretionary virtually offset the overweighting of smaller stocks. The portfolio reviews carried out in November were marked by increased positions in materials and consumer discretionary. Among the outflows were mainly healthcare and industrial stocks. There was a net increase in exposure to the UK this month, bringing it back almost in line with the index. The portfolio is now mainly overweight in financials, healthcare and consumer staples, and underweight in consumer discretionary, real estate and technology. The UK remains the portfolio’s largest weighting at 29.1%, ahead of Sweden at 12.8% and Switzerland at 10.8%.
Digital Stars US Equities Acc USD ended November up +11.0%, outperforming both the MSCI USA NR at +6.2% and the MSCI USA Small Cap NR at +10.2%. The fund is up +36.5% since the beginning of the year, vs. +27.9% for the MSCI USA NR and +21.0% for the MSCI USA Small Cap NR.
The fund’s overweighting of small and mid-caps, as well as financial stocks, enabled it to benefit from the outcome of the US elections. In addition, strong earnings announcements from technology stocks such as AppLovin (+98% this month) enabled the fund to end November on a high note, outperforming its index by +4.8%, as well as the small and mid-cap segment. The fund remains overweighted in finance and industry. The most underweight sectors remain technology, media and energy.
