The UCITS' investment objective is to seek performance through exposure to equity markets, primarily in the Eurozone, by selecting, on a discretionary basis, securities from an investment scope comparable to the MSCI EMU index.
European markets have followed the ups and downs surrounding the adoption of tax reform in the United States: with the MSCI EMU losing -0.9% over the month, while its ex-euro zone counterpart gained +2.7%. The euro's continued rise, regaining its September highs, impacted the month end. The United Kingdom has distinguished itself, having reached an agreement with the European Union on its Brexit bill and the future of the border with Ireland. In contrast, Italy and Spain have been suffering from the return of political risk with, in case of the former, the resignation of the Italian prime minister on December 28, opening the prospect of a general election on March 4. In Catalonia, the elections have not clarified the situation, with the separatists retaining a majority of the seats but trailing Ciudadanos, which supports a Catalonia that remains in Spain. Meanwhile, in Germany negotiations are continuing on the formation of a coalition government between the CDU and the SPD. At the macro level, confidence surveys have surprised us with a yet another rise, with December's preliminary PMIs at 60.4 for the manufacturing sector (an historic record going back to mid-1997) and 56.5 for services (its highest since April 2011). Annual inflation was confirmed at 1.5% in November (against 1.4% in October), with underlying inflation at 0.9% (as in October). In sector terms, rising prices for oil and industrial metals pushed oil stocks and basic materials to the top of the rankings. At the other end of the spectrum, utilities were penalised by Innogy/RWE's rate hike and profit warning. During the month we sold Airbus, the portfolio's classic corporation: its fundamentals remain as convincing as ever, but the stock has reached our price target.
Share class (SC-EUR)
(1) The rating grades the funds on a scale from 1 to 7. This rating system is based on the average fluctuations of the net asset value over the past five years. It corresponds to the variation range of the portfolio upwards and downwards. If the net asset value is less than 5 years old, the rating is determined by other regulatory calculation methods. Historical data such as those used to calculate the rating may not be a reliable indication of the future risk profile. The current category is neither a guarantee nor an objective. Category 1 does not signify a risk-free investment.