The objective is to grow its net assets by selecting stocks that are listed on the international equity markets, notably in the infrastructure sector, over the recommended minimum investment period.
International equity markets rose in March, raising year-to-date growth to 5% (MSCI ACWI in euros). The March PMI Flash indices have confirmed the positive trend in the world economy and industrial demand, especially in Europe. As was widely anticipated, the US Federal Reserve hiked its rates by 0.25%, but in particular Fed chair Janet Yellen's words were reassuring and helped to ease US long term bond rates. Overall, political risk remains significant, with the Trump administration suffering setbacks on healthcare reform. But the defeat of the populist PVV party in the Netherlands and the stability of opinion polls in France have reassured investors over the rise of populism in Europe. Markets accordingly remain in a positive rate environment for the infrastructure sectors. The fund generated a 2% performance in March, outperforming the general indices, and benefiting from our emerging markets exposure (especially on Mexico) as well as that in Europe. The best contributors to performance in March were Vinci, Eiffage and Enel. We have taken advantage of the solid performance posted since the beginning of the year to book profits on Vinci and Eiffage. Less positive comparables due to seasonal effects (after 2016's leap year) on highway and airport traffic, and climatic effects on construction in a colder winter could have a negative impact on Q1. Given their strong contribution to the French market (59% of sales for Vinci, and 80% for Eiffage), these companies could also see short selling pressure, according to the outcome of the presidential elections in France. Any such decision would be tactical, Vinci and Eiffage remain strong convictions over the long term. We also strengthened our positions on CSX Corp after Hunter Harrison was appointed as CEO, and in Airports of Thailand. The latter is expected to benefit from an influx of Chinese tourists following Beijing's measures against South Korea after news of its deployment of the THAAD anti-missile system. Meanwhile, we have sold AltaGas following its acquisition of WGL, which we reckon could trigger a contraction of multiples.
(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.