intro Outperforming in all regions

Another week of growth for financial markets, which benefit from the growing prospect of a vaccine against Covid-19 but also from the resumption of negotiations on the vast American recovery plan. In contrast to previous weeks, volatility was somewhat reduced, as operators remain concerned about peaks in contamination, particularly in the United States, and new containment measures that are expected to have a significant impact on the economy.

November is a record month, particularly in Europe where index scores are dizzying. The CAC40 actually rose by nearly 20% over this period, as did the DAX and FTSE100. It is clear that the so-called "value" stocks have benefited the most from the recovery of the indices. This is why we have begun to reposition our portfolios towards more cyclical stocks, in line with the recent arbitrages made on our European selection, while making a point of selecting only solid and resilient stocks, without giving in to the sirens of stocks with strong rebound potential, justified by often deteriorated fundamentals and without visibility.

Let's come back to our portfolios, which this week outperformed their benchmark indices, partly thanks to the rebound in "covid-proof" stocks, the same stocks that enabled our portfolios to perform well in the first half of the year.

 

European Portfolio

The Europe portfolio grew by 2.80%, well ahead of the Stoxx Europe 600 NR and its 1.03% weekly gains. Our selection has thus progressed by 7.5% since the beginning of the year.

The portfolio's news was driven by arbitrage. Ahold Delhaize (+2.31% gross performance), Virbac (+31.68%), Ipsen (+14.43%) and Koné (+12.89%) have been replaced by Alfen (energy transition specialist), Prosus (internet), Signify (LED lighting) and Aurubis (Europe's leading copper producer). We are injecting a little more cyclicity into the selection and reducing our exposure to health.

HelloFresh (+13.4%) and BHG Group (+13.2%) are bouncing back, as buyers took advantage of last week's clearances to make cheap purchases. Alfen (+9.00%) is also making a strong entry into our portfolio, with a new annual high of EUR 67 (see chart). The Germans Zooplus (+6.7%), Flatex (+4.5%) and Stratec (+4.4%) also achieved a qualitative weekly sequence.

On the downside, Shop Apotheke (-6.9%) remains badly hit after the announcement of Amazon, which is launching an online pharmacy. In the same vein, Deutsche Börse (-1.9%) was flat, as defensive values were not particularly solicited, like the weekly runs of Iberdrola (+0.3%) and Sanofi (-0.05%).

New historical high for Alfen

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USA Portfolio

Our American selection has stabilized this week, with a 0.2% improvement in performance, a score to be highlighted with the S&P500 (-0.77%) and Dow Jones (-0.74%) declines.

Technology stocks have pulled the portfolio up, like Etsy's beautiful rebound (+12.12%), which erases a large part of its decline in recent weeks. We also have games specialist Netease (+6.0%), the semiconductor heavyweight Applied Materials (+5.8%) and the home builder D.R. Horton (+2.4%).

Meanwhile, traders took profits on stocks that had strongly lagged last week. Our insurers Cigna (-6.8%) and UnitedHealth (-5.9%) are paying the price. In the same way, risk appetite penalizes gold, just like gold companies. As such, Newmont is down 6.1%.

Netease bounces back

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Asian Portfolio

Our Asian selection is advancing 0.36% this week after suffering from vaccine announcements. Its benchmarks have varied trajectories: the Hang Seng remained in the green at 0.40%, while the Nikkei suffered a setback (-1.47%).

The transport and logistics company SITC International grew by 14.15%, boosted by the announcement of the free trade agreement between 15 Pacific countries, including China. Recent advances in vaccines should allow the transport sector to return to normal by the end of 2021. Nexon catches up on this weekly sequence and gains 7.83%. Its CEO plans to strengthen the group's mobile offer, as he believes that the improved processing power of smartphones should overshadow PC games in the long term. The Z Holdings search engine also rebounded (4.46%) after last week's big losses.

The two Australian gold mining specialists Saracen Minerals and Regis Resources fell back again, losing 8.1% and 5.87% respectively. The latest announcements on the vaccine front have chilled investors on the gold metal, as evidenced by the outflow of gold funds, which saw their largest outflow in history, at -4.1 billion dollars. However, Saracen Minerals shares remained largely profitable over the year as a whole. Finally, the healthcare sector continued to suffer, as evidenced by the weekly variations of Chugai Pharmaceutical (-4.24%) and Ansell (-3.76%).

SITC

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Towards a calmer end of the year?

Volatility has gone down a notch and December promises to be relatively calm. We are working to better position our US and Asian portfolios and are preparing margin trades along the same lines as those made for our European selection last week.

In the shorter term, portfolio news will be drained by Asia as CSPC Pharmaceutical and Xiaomi will unveil their quarterly results this week. Dividends are also on the agenda. S&P Global, The Scotts Miracle-Gro and Prosus will pay dividends to their shareholders.

 

Patrick Rejaunier
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