On this hectic day, it seems important to make a rational point on the equity markets and Trecento AM funds. The decision of the UK population to leave the European Union is wavering most of the world markets, including equity markets and currency markets. We had integrated this scenario into our investment strategy and preemptively reduced the equity exposure of the funds as well as the weights on the most volatile companies.
For our Trecento Santé fund, it is now a few months since we reduced our exposure (81% yesterday) to preserve the fund of uncertainties and volatility. This decrease in exposure combined with the fund’s defensive positioning has limited negative performance, which is (very) well above the healthcare sector. Even before today, Trecento Santé posted the best performance in its category since the beginning of the year (-4.8%).
Given the binary, unpredictable nature of the English vote and the many opportunities presented by the US market, the management team has recently increased its position on this market by reducing European exposure. Indeed, last night, 82% of our equity investments were in US dollars, which is positive with the depreciation of the euro. Our main positions are large-scale multinational healthcare companies with diversified products and services that are less sensitive to market movements. As a reminder, we do not buy unprofitable companies and our exposure to biotechnology is very low.
For our Trecento Entrepreneurs fund, we had reduced exposure to the most volatile sectors (particularly finance) to favor more defensive sectors (healthcare, consumer goods, technology). We also lowered the equity exposure of the fund (86% yesterday) and exposure in the UK for which we favored English multinationals benefiting from the current depreciation of the pound.
The European equity markets opened very sharply this morning. We did not inject movements at this stage but monitor entry points on quality values.
The whole team remains at your disposal for any clarifications.
The management team of Trecento AM.