as of end of April 2020Download
as of 30/04/2020
|1M||3M||YTD||1 Y||3Y p.a.||5Y p.a.||Since Inception|
|Internal comparison index||6.12%||-16.81%||-17.85%||-11.58%||-1.87%||-||5.89%|
In April, the European markets rebounded sharply (+6% for the MSCI Europe TR index) thanks to the first elements reflecting the gradual recovery in China (post-lockdown period) and the perspective of easing restrictions on people and business all around the globe.
In that environment, excluding Energy that was affected by the slump in oil prices, all sectors regained ground. The best performers were a mix of growth and cyclical industries such as Automobile (+14%), Travel & Leisure (+12%), Technology and Healthcare (+10%)
In this context, with a total return at around 8% over the month, the sub-fund amplified the whole European market’s rebound (when compared with the one achieved by the MSCI Europe TR) thanks to the strong recovery of the Pensions & Savings’ investment pillar and the lasting outperformance of Healthcare in 2020.
Reversing the trend of the previous weeks, the PENSION & SAVINGS pillar delivered the best return in April (at circa +13%) among the three investment pillars (Pensions & Savings, Healthcare and Consumers). In that situation, benefiting from its high correlation with financial markets’ movements, the Asset Management sub-segment emerged from this revival with Anima, Julius Baer and Amundi among the top performers (respectively up +32%, 15% and 13%). The other sub-segment, composed of Life Insurers and Reinsurers, was also supported by lower credit spreads (driven by central banks’ interventions) and / or reassuring results for the first quarter 2020, as illustrated by Scor and Legal & General (resp. up 28% and 15%).
Considered as relatively immune or even positively impacted by the covid19 outbreak, the HEALTHCARE pillar (up to c. 10% in April) continued to deliver robust performances. Q1 Results generally confirmed the resilient status of pharmaceutical groups’ activity. AstraZeneca and Ipsen were the top contributors (resp. up 18% and 44%), both posted profits that beat expectations thanks to positive stocking impact and good momentum in Oncology. The sub-segment of Medical Equipment & Services posted more mixed performances with Convatec / Siemens Healthineers on one side (up 18% and 12% thank to the essential status of their businesses and strong order books) and Sonova / Straumann on the other side (returns below +3%), hit by closures of stores and the postponement of elective procedures.
To a lesser extent, the CONSUMERS pillar also contributed positively to the monthly performance but contrary to the situation that prevailed in the latest weeks, cyclical and defensive industries displayed very similar returns. Regarding discretionary spending, hotels and luxury sub-segments posted single-digit returns (Richemont, LVMH at +4%, InterContinental Hotels Group at +5% and Burberry at +7%). In that segment, the small-cap companies such as Trigano and Technogym outperformed (up 16% and 12%). Regarding staple spending, the French players Danone and l’Oréal published decent results for the first quarter and their top management gave reassuring comments about the business resilience. Both were up 8% and 11%.
The most relevant contributors in April were as follows:
Over the period, our positions in Ipsen were reinforced after the French pharmaceutical group detailed reassuring numbers for its blockbuster Somatuline. Moreover, the momentum remains positive for that drug in Europe despite the launch of a generic version of its main competitor.
On the opposite, we reduced our holding in Lagardere (+29% over the month, supported by information about shareholders’ battle with the objective to change the governance of the media group) and totally sold our investments in Pernod Ricard (hurt by the current lockdown and future restrictions on bars and restaurants).
At the end of April, the respective weightings of Consumers, Healthcare and Pension & Savings stood at respectively 47%, 36% and 17%.
Ageing population is a structural growth theme supporting above average returns over time. Businesses within our investment pillars of Healthcare, Pension & Savings and Consumers are expected to grow faster than global GDP over the coming years and to show lower cyclicality. Examples include travel & leisure, asset management, oncology, incontinence, anti-ageing cosmetics, vitamins and dietary supplements.