The objective is to grow its net assets by selecting stocks that are listed primarily on the international equity markets, and to outperform the MSCI World index, over the recommended investment period.
Trade tensions continued to impact investor confidence and equity markets in June. While defensive sectors (utilities, real estate, consumer durables) and the energy sector outperformed, cyclicals were in decline. Within EdR Global Value, our investments in the commodities sector accordingly posted the worst performances, impacted by widespread fears of slowing global trade and falling demand. Automobile stocks (Renault, Volkswagen) and household appliances (Whirlpool) were penalised by concerns of additional costs related to steel supply, and possible difficulties in accessing final markets. Crude oil prices (WTI) climbed 10% over the month, given Opec's decision to put through a measured increase in production, with demand remaining sustained, and US reserves continuing to decline. Energy stocks cautiously welcomed the oil rebound and we remain invested throughout the value chain (from producers and service companies to equipment and infrastructure). We have strengthened our investments in the health sector through two US stocks: Celgene, is a biotech stock with a flagship product for the treatment of blood cancer and a pipeline of largely undervalued products in development. The other is CVS, which has a large network of pharmacies and medical prescription management sites. Its growth prospects are also being driven strongly by its deployment of clinics in its pharmacy network, as well as its intended merger with the healthcare mutual, Aetna. Based on this first semester, we expect to see a continuing out-performance by our Growth strategy at the expense its Value counterpart, with which it has now established a performance gap of almost 800 bps. While EdR Global Value has shown how to take advantage of the early rebound in energy-related stocks, there is still significant revaluation potential through other investments.
(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.