Tuesday, October 18
Over the past two years, we have highlighted that inflationary pressures will be stronger than expected due to structural production constraints, strong labor markets and supply chain issues stemming from the pandemic.
The military conflict between Russia and Ukraine has only accentuated the imbalances in the commodity markets. Food and energy prices have soared, exacerbating inflationary pressures. However, the conflict has also accelerated the revision of economic policies in order to reduce the region’s heavy dependence on Russian imports while advancing the process of energy transition.
The persistence of high inflation has led central banks in major developed markets to change their rhetoric and embark on an aggressive tightening path, cutting liquidity and raising interest rates, even to the detriment of economic growth. The policy response has been reactive and while investors expect the tightening cycle to continue, monetary decisions are unlikely to be synchronized, reflecting different regional market dynamics.
In a volatile market environment, marked by persistent inflation and restrictive monetary policies, we focus on investment opportunities in stocks whose valuations do not reflect their business potential. We select overlooked companies with strong fundamentals that can benefit from a rising interest rate environment, are gaining market share and have low leverage. On the other hand, we avoid overcrowded areas of the market and expensive names susceptible to further declines in valuations as the tightening cycle continues.
Our funds performed exceptionally well in this challenging environment, reflecting our disciplined approach to stock selection and risk management. Our fundamental investment process allows us to identify companies that can withstand or even profit from the current economic environment. The market outlook remains fragile, but we are very confident in our positioning and expect our portfolios to hold up and continue to generate alpha for investors.
We will host a conference call on October 18 at 11:00 CET (in English) and at 15:00 CET (in French) and we will be happy to share our point of view with you.
Reserved for professional investors
Registration for the conference in English par email
Registration for the conference in French par email