The fund's management aim, over a recommended investment period exceeding five years, is to grow its NAV through investments primarily made on the French equity markets.
The first round of the French presidential elections lifted the political risk premium weighing down on the market in France. Now the market can re-focus on the fundamentals. And they're looking good. Leading indicators from all the euro zone countries point to an acceleration of growth under way, backed up by a chain of quarterly earnings reports, and in particular, the organic growth apparent. The market is bargaining on a defeat for Marine Le Pen (lower risk premium), but not yet a victory for Emmanuel Macron. This in the sense that at this stage the market is not buying wholesale into either the dynamics of earnings growth, or the prospect of reform in France (privatisation, reduced labour costs, reduced business taxation and tax simplification when it comes to savings). The market can reasonably pause, particularly given the valuations reached, and wait for an exit upstream from doubts over US reflation and the necessary changes to the ECB's line namely less political risk and vigour in euro zone growth, which warrants an adjustment to the discourse on interest rate levels and/or an end to QE. What's more, the election is heightening market visibility in two steps: Rebalancing performance in favour of France and the euro zone on the earnings momentum behind market leaders, and also exploiting new opportunities for reform in France, which could in turn re-boot European integration. Dans ce contexte, quelques prises de bénéfices ont été prises sur des dossiers qui se sont bien revalorisés comme Tarkett, Airbus, Edenred, Ubisoft.
(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.