Investment Monthly Report
January 2024

07 February 2024

The macro environment continues to be favourable for equities (MSCI Europe NR +1.6%, MSCI USA NR +1.5% in January). Economic momentum is still picking up in all regions. Moreover, the central banks are still expected to complete their monetary pivot in the first half of 2024, despite Mr Powell’s less generous comments at the end of the month. In this context, interest rates rose in January, which did not help the small and mid cap segment in relative terms. Surprisingly, given the rising interest rates and climbing indices, it was the defensive Visibility stocks that stood out, while Value stocks underperformed. The start of the announcement period largely explains this phenomenon. In Europe, for example, ASML Holding and LVMH, two of the biggest names listed on the stock market, climbed by +17.1% and +5.5% respectively in January on the back of well-received quarterly results. Could this finally be the sign of a return to fundamentals, more favourable to stock-pickers? It is likely and bodes well for our active management approach.

Small and mid caps suffered from the relative pressure on interest rates during the month. However, this movement benefited all of our Value segment, in particular financial stocks, which are overweighted in our funds, via Italy in particular. In addition, our selection in the materials sector made a significant contribution to January’s performance, thanks in particular to cement companies (CRH PLC, Buzzi Spa). Against this backdrop, the Digital Stars funds ended the month slightly ahead of their indices. Digital Stars Europe Acc posted a monthly performance of +2.1% compared with +1.6% for the MSCI Europe NR. Digital Stars Continental Europe Acc ended January at +1.8% compared with +1.9% for the MSCI Europe ex UK NR. Digital Stars Eurozone Acc posted a monthly performance of +3.7% compared with +2.2% for the MSCI EMU NR.


The portfolio reviews carried out in January were diversified, increasing our positions in the healthcare, industry and IT sectors. Among the exits were mainly consumer discretionary, bank and energy stocks. The overweight of banking stocks in Digital Stars Europe is now at 3.3%.

Digital Stars Europe is overweight financials, real estate and industrials. The fund is underweight healthcare and consumer staples.

The UK is still the fund’s top weight at 19.8%, ahead of Italy at 14.3% (largest overweight) and Germany at 11.0%.


Digital Stars Europe Smaller Companies Acc ended up +0.8% in January, vs. -0.9% for the MSCI Europe Small Cap NR. Small and mid-caps suffered from the relative pressure on interest rates, but this movement benefited our entire Value segment, particularly our Italian banks. Our materials stocks made a significant contribution to January’s performance, as did our industrials.

The monthly portfolio reviews have strengthened our positions in the communication services, real estate and healthcare sectors. Sales occurred mainly in consumer discretionary, energy and finance.

The portfolio is now mainly overweight in consumer staples, materials and communication services, and underweight in finance, healthcare and IT.

The United Kingdom is the biggest country weight in the portfolio and weighs 17.3% (but remains the most largely underweight country), ahead of Sweden at 15.3% and Italy at 12.5% (2nd largest country overweight).


Digital Stars US Equities Acc USD was up +0.2% in January, vs. +1.5% for the MSCI USA NR and -3.5% for the MSCI USA Small Cap NR. Small and mid caps suffered from the relative tension on interest rates during the month, as well as from Mr Powell’s ‘hawkish’ speech on 31 January. Our underweight position in the communications services and information technology sectors did not pay off, nor did our selection within financial stocks. Some individual stocks in the IT and consumer sectors made a positive contribution to performance.

The latest monthly portfolio review mainly increased the positions in consumer discretionary, as well as in finance, real estate and media, and reduced mainly those in IT and industry sectors.

The portfolio is significantly overweight in industry, as well as in consumer discretionary and finance. The most underweight sectors are IT, media and pharmaceuticals.