August update: Macro view remains unchanged

The Strategic Europe Quality Fund returned 1.27%* in August, outperforming its index by 2.71%. The largest contributor to alpha was the Consumer Staples sector, mostly driven by the Fund’s relative overweight to the sector as well as stock selection.

Monthly Fund Commentary
20 Sep 2019

The Strategic Europe Quality Fund returned 1.27%* in August, outperforming its index by 2.71%. The largest contributor to alpha was the Consumer Staples sector, mostly driven by the Fund’s relative overweight to the sector as well as stock selection.

The Fund’s relative overweight to the Health Care sector was also a significant contributor to alpha during the month. There were no noteworthy detractors over the period in terms of alpha. In August, the best performing sectors for the index were Consumer Staples, Utilities, and Health Care; while Energy, Financials and Information Technology were the worst performing sectors.

At a single stock level, the best performing stocks for the Fund were Novo Nordisk, Unilever and Nestlé. The only noteworthy detractor was SBM Offshore. During the month, the Fund sold its position in ABN Amro and initiated a position in Mowi.

The Strategic Global Quality Fund returned 1.91%** in August, outperforming its benchmark by 3.96%. Similar to the Strategic European Quality Fund, Consumer Staples was the largest contributor to alpha mostly driven by the Fund’s relative overweight to the sector. Stock selection for the Information Technology sector was also a significant contributor. There were no noteworthy detractors to performance. The best performing sectors for the index over the month were Utilities, Real Estate, and Consumer Staples; while Energy, Financials, and Materials were the worst performing sectors.

The best performing stocks for the Global Fund were Nomura Research, Shiseido, and Novo Nordisk, whilst there were no noteworthy detractors. The Fund made no changes to the portfolio composition during the month.
The Investment Adviser’s macro view has remained consistent this year, with all the data and developments confirming their cautious view of the world. The team believe that there is more volatility to come and therefore will continue to maintain their defensive portfolio positioning.

The views and statements contained herein are those of Lofoten Asset Management in their capacity as Investment Adviser to the funds as of 13/09/2019 and are based on internal research and modelling.