Dear investor / future investor

We are / will be happy to count you among the investors of the PREDIA LONG EQUITY fund and we thank you for your trust.

If you wish to follow the evolution of the fund, we invite you to visit one of the following sites: Morningstar or Quantalys or Boursedirect. Simply enter in “search” the fund name PREDIA LONG EQUITY C (client) or I (Institutional)

You will be able to consult its net asset value (published every week) and compare its performance with that of other funds of the same category (under the heading “performance”).

A monthly newsletter will be published on the website of the management company RCUBE Asset Management as well as on our website.

Do not hesitate to contact our team for any further information.

Wishing you an excellent investment journey with us!

PREDIA LONG EQUITY

Our technology for your investment

 

  • MONTHLY LETTER OF PREDIA LONG EQUITY FUND (RCUBE AM) – June 2019

The month of June 2019 was marked by a strong rebound in the stock indexes erasing the severe correction of the month of May. The accommodating turn of the Central Banks explains the strong growth of the indices in spite of the signs of slowdown of the world economy with notably the announcement of a contraction of the activity of the manufacturing sector in China as in Japan in June.

Investors are now massively counting on a rate cut by the US Central Bank at its next meeting in late July. The other issue “burning” is of course that of trade relations between the United States and China. Between disappointment and hope, this file has continued to hold the planet finance.

Encouraging trade news at the end of the month also boosted stock market performance. Donald Trump announced during his meeting with Chinese President Xi Jinping at the G20 summit not to impose new customs duties on Chinese exports and resume trade negotiations. However, it is a truce and not peace in this conflict that has lasted for months and there is no doubt that the markets will evolve further in the coming months to the rhythm of new advances.

In this context, our model took advantage of this uptrend and recorded a positive performance in the month of June. He adapted his exposure to different sectors according to market opportunities. Thus, in the radius of satisfactions, we have almost cleared our latent depreciation on Kering which was losing nearly 11% at the end of last month. We also realized a nice capital gain on Cap Gémini, with a gain of more than 14%. The market horizon that seems to be lightening again may encourage investors to expose themselves again. However, the indices are also on the highs of the year and many managers could decide to secure their earnings especially after the big disappointment of the end of last year still present in the minds.

Today our model advocates exposure to equity markets around 60%.

  • MONTHLY LETTER OF PREDIA LONG EQUITY FUND (RCUBE AM) – May 2019

The month of May 2019 was marked by a sharp correction in equity markets, which recorded their worst monthly performance since the heavy debacle recorded in the fourth quarter of 2018. It can be said without a shadow of a doubt that the hardening of the trade war has been the determining factor for the markets. While everyone expected a trade agreement between China and the United States on the occasion of the G20 in Osaka, no one seems to anticipate it anymore. Beijing seems determined not to let it go and is about to send a list of American companies that will no longer be able to trade with Chinese companies.

Moreover, Donald Trump has decided to extend this war and carry it on several fronts with the implementation of customs sanctions against Mexico if the government does not stop the flow of migrants.

Moreover, politics is also back on the scene with the tug of war between Rome and Brussels over the Italian budget while Brussels is considering disciplinary sanctions against the country. Let’s not forget also that T. May will officially resign on June 7th.

In this context, we have held up relatively well (relative to the indexes) in the markets, because as indicated in our previous management letter, our model has reduced its exposure on the equity markets and has favored defensive or hedged securities. For example, we have been positioned since the end of April on the Newmont Mining stock, on which we realize a latent gain of 5.08%.

Conversely, on the side of disappointments, we realize an unrealized loss of 11% on Kering. The market horizon is now more complicated and the risk of violent movements is increasing which could encourage investors to be cautious. However, this sharp correction in May also created shopping opportunities that our model could seize.

  • MONTHLY LETTER OF PREDIA LONG EQUITY FUND (RCUBE AM) – April 2019

 April 2019 was marked by the kickoff of the publications of the first quarter results. At half way, the balance sheet seems rather positive, even if the profits of the companies of the S & P500 are still expected down of one year and for the first time since the 2nd quarter of 2016 when profits felt by 3.2%.

At the end of April, about half of the S & P 500 companies published their first quarter accounts and 77% of them outperformed in terms of earnings. Financials ones better performed while technology released contrasting numerals: lower than expectations for IBM, Intel and Alphabet but better than expected for Facebook, Amazon and Microsoft.Thus, the US stock indexes return to historic highs but also drive the market valuations to high levels. However, this month of April is also marked by a lack of volatility and volume.

Markets seem to be free-wheeling. The question is therefore whether the markets have the capacity to maintain their growth while the companies profit prospects are rather morose and the global economy is slowing down. The prolonged pause in the Fed rate hike and the trade agreement between the United States and China expected soon, remain supportive factors.

In this context, our model has slightly benefited from this uptrend and recorded a positive performance over the month. However, buying signals were more rare, which leads us to be less exposed on the stock markets. In the radius of satisfactions, we achieved this month, for example, several significant profits including Danaher, Mastercard, Fiat Chrysler, Pepsi or Lufthansa. On the side of disappointments, we are still positioned on the titles “Regeneron” and “Electronic Arts” on which we made to date the respective unrealized losses of about 10% and 6%.

  • MONTHLY LETTER OF PREDIA LONG EQUITY FUND (RCUBE AM) – March 2019

The month of March 2019 has closed a particularly flattering quarter.

On the other hand, despite the annotations on the global economy, materialised by the reversal of the yield curve in the United States, this month of March 2019 ends with a positive balance sheet for the European and American financial markets. The last few times that the speech was supported by the central bankers, but also by a trade agreement, after the resumption of negotiations between China and the United States. Thus, the New York Stock Exchange has posted its best quarterly performance for almost ten years.

PMI European very poor in March, redefine performance, then be less generous in the second quarter, they are also very cautious. the fear of global growth has been awakened and the word “recession” has come to light.

In this context, our model took advantage of this trend and recorded a positive performance on the month of March. Since March 22, he has entered in the “caution” mode. We will put the exhibition back as soon as it resumes its “risk on” mode.

In the radius of satisfaction, we sold this month “Campari” with a gain of just over 10%. In the US market, we are still positioned on the title “Danaher Corporation”, on which we realize to date a latent gain of about 25%. On the side of disappointments, we recorded a loss of more than 5% on “Infineon” as well as a loss of nearly 9% on “Wynn Resorts”.

  • MONTHLY LETTER OF PREDIA LONG EQUITY FUND (RCUBE AM) – February 2019

The rebound in the financial markets continued throughout February, fueled by a positive sentiment on the outcome of the talks between China and the United States and their trade relations. Indeed, Donald Trump has pushed back the deadline of March 1 and even said that China and the United States were very close to an agreement. In parallel, although the publications of companies are not always flamboyant, they nevertheless tend to dispel the fears that could be had over the year 2019. Moreover, the “minutes” of the Fed largely resumed the accommodating remarks of the last report of January 30, emphasizing that to mark a pause in the cycle of monetary tightening It was not a risky venture, and it had the added benefit of allowing time to assess the effects of the global economic slowdown and previous rate hikes on the US economy. Thus, the hopes of an agreement and the accommodating remarks of officials of the Federal Reserve have boosted equity markets in recent weeks. In this context, our model took advantage of this uptrend and adapted its exposure to different sectors according to market opportunities. Thus, in the range of satisfaction, we sold Kering, for example, with a gain of around 16%. to position ourselves on Adidas, which has since grown by almost 7%. In the US market, we are still positioned on the Danaher Corporation stock, on which we realize to date a latent higher-value of about 21%.

  • MONTHLY LETTER OF PREDIA LONG EQUITY FUND (RCUBE AM) – January 2019

The month of January was marked by a strong rebound in European and US stock market indices after a disastrous end of year 2018.

For example, the Dow Jones index closed the month of January above the 25,000 point mark for the first time since December 4th.

The markets have ignored signs of a slowdown in the world’s second-largest economy, despite the impact on the results of many companies that report difficulties because of the trade dispute between China and the United States for several months now.

In fact, investors have realized that there are good reasons to reach an agreement as the pursuit of Chinese growth at a good pace is a necessary condition for the global economy and the United States to continue growing.

In addition, the markets were also supported by the Federal Reserve, which announced the unsurprising continuation of its monetary policy but above all said that it would be patient with regard to possible additional increases due to economic and financial uncertainties. She also hinted that she could slow down her balance sheet.

Over the course of this month, our model regained confidence and gradually increased its exposure to equity markets by investing primarily in cyclical stocks such as Kering, Johnson & Johnson or Fiat before returning to the sector of technology with Netflix, Electronic Arts or Nvidia.

  • MONTHLY LETTER OF PREDIA LONG EQUITY FUND (RCUBE AM) – December 2018

Experiencing! The month of December saw very strong declines on the main world indices. The S & P-500, for example, has reported a decline of 9.18%, its biggest monthly drop since February 2009 and its worst month of December since 1931. The Dow, meanwhile, lost 8.66% over the month and the Nasdaq 9.48%.

The “traditional” end-of-year rally has this time given way to a real “purge” of the end of the year.

For the whole year, Wall Street recorded its largest decline since 2008.

These losses were mainly concentrated in the last three months of the year with the combination of Sino-US trade tensions, rising interest rates, slower growth in corporate profits, Brexit fears and shutdown, the closure of part of the federal administrations for lack of budget agreement.

The S & P lost 13.97% in the fourth quarter, the Dow 11.83% and the Nasdaq 17.54%.

In this context of extreme feverishness, we still managed to hold our own in December, with a loss of 5.4% (at 31/12), but it remains well below those registered by the main European and American indices. Indeed, our model has tended, as in the previous month, to realize faster its losses and profits integrating the factors of extreme nervousness and market volatility.

  • MONTHLY LETTER OF PREDIA LONG EQUITY FUND (RCUBE AM) – November  2018

The month of November was intense. Indeed, already in a particularly bad month of October, the markets have evolved in a context of anxiety at the pace of major events, with the key point of the crucial meeting planned between Donald Trump and his Chinese counterpart. margin of the G20 summit to try to find a trade agreement.

Mid-term elections in the United States, whose results corresponded to the scenario favored by the markets and bode well for a certain political balance in the United States until 2020, should have favored a renewed appetite for risky assets. .

But soon, fears around Apple and the demand in the technology sector grafted on more general concerns about trade, global growth and political risks in Europe have created a climate of mistrust. Hot topics such as Brexit and the Italian budget deficit are obstacles to risk taking in the markets.

In addition, the plunge in crude prices also weighed and highlighted signs of slowing global demand.

The respite came at the end of the month after remarks interpreted as accommodating of the president of the Fed who now estimates that US interest rates are now close to the “neutral” level, which does not stimulate or curb the economy.

In this context, our model performed rather well since we recorded a very small loss in November, around 1%. Indeed, after making changes in its sectoral exposure, it has tended to achieve faster profits including the markets remain extremely nervous.

  • MONTHLY LETTER OF PREDIA LONG EQUITY FUND (RCUBE AM) – October 2018

The month of October has been particularly difficult in the financial markets. Some indices have lost nearly 10%. This is the case, for example, of the American Nasdaq, whose performances have been insolent for a few years, and which has been severely corrected.

On the European side, the CAC40, for example, lost 7.28%, which currently ranks October 2018 among the 10% most unfavorable stock market since the index was created in 1987. The market sentiment has increased considerably during this month. Indeed, investors believe that the doubts relating to higher yields, the Italian budget, trade protectionism or corporate profits persist. All these points raise the volatility of the markets.

Moreover, this risk aversion has been further reinforced by the unwelcome results of the American giants, Alphabet and Amazon. In this context, which is particularly unfavorable for equity markets, we have logically recorded losses.

However, our model reacted during this month with significant adjustments. It first performed a sector rotation by disengaging technology stocks,  mostly affected , in favor of defensive stocks. It then gradually reduced its equity market exposure, pending consolidation and the next signs of recovery.

  • MONTHLY LETTER OF PREDIA LONG EQUITY FUND (RCUBE AM) – September 2018

The after summer is not synonymous with tranquility for investors and the month of September has kept all its promises. All geographical areas are affected.

Once again, trade tensions have been at the center of investors’ concerns. Indeed, the markets were punctuated during this month of September by the phases of hopes of appeasement between China and the United States and announcements of imposition of new tariffs fearing a worsening of the trade dispute.

Beyond trade issues, the US Federal Reserve unsurprisingly announced a quarter point rise in its main interest rate and left virtually unchanged its outlook about monetary policy developments, with sustained economic growth and historically low unemployment. This is the third rate hike decided by the Fed since the beginning of the year and the seventh in the last eight quarters.

On the other hand, in Europe, Italy’s risk of fiscal slippage has stopped the upward movement of European indices undertaken in recent sessions. Indeed, Giovanni Tria (Minister of Economy) administers a cold shower by presenting a deficit of 2.4% of GDP while it was expected to be below 2%. During this month, our model took gains on Adidas and Amazon achieving respective performances of 8.4% and 14.9%. We also recorded a loss of 7.2% on Expedia.

On our portfolio securities, in the radius of satisfactions, we are still positioned on Activision Blizzard and Illumina on which, we realize unrealized gains of 16.5% and 10% respectively. On the disappointments side, we record a latent loss on STM of 12%.

  • MONTHLY LETTER OF PREDIA LONG EQUITY FUND (RCUBE AM) – August 2018

The weeks pass while keeping the same thematic. The month of August was indeed once again marked by D.Trump’s interventions on international trade that constantly annihilate the hopes of a restoration of the upward dynamic in Europe and Asia. In contrast, American indices have sparkles, accumulating historical records. Investors are mainly focused on equities across the Atlantic, characterized by strong growth and values creation.
Wall Street was boosted at the end of the month by the announcement of an agreement between the United States and Mexico which should replace the North American Free Trade Agreement (Alena), before next opening of talks with Canada.

In the same vein, the chairman of the Federal Reserve, Jerome Powell delivered a speech deemed reassuring. It confirms the health of the US economy and the employment market. It confirms the scenario of a further rate hike by eliminating the risk of overheating from that of a marked acceleration of inflation.
During this month, our model gradually sold to Europe securities belonging to the banking and insurance sectors, affected in particular by the “Turkish crisis” but making profits. Thus, we sold Crédit Agricole, CNP and Scor.
Also on the positive side, we keep in the portfolio the Adidas security on which we realize a latent gain of 15%. Our model was also positioned at the beginning of the month in the United States, on Amazon and Netflix, which have since achieved respective performances of 10% and 6%.

  • MONTHLY LETTER OF PREDIA LONG EQUITY FUND (RCUBE AM) – July 2018

This month was marked by sharp tensions and multiple market upswings in which followed one another: fears of a large-scale commercial war, publication of results of the companies of the second quarter and meeting of the Fed.
Indeed, Donald Trump has raised the stakes and has increased pressure on its Chinese and European trading partners. An agreement has been announced with Europe, and the Chinese and American governments should accept the idea of returning to the path of negotiations in order to avoid an escalation of customs fees.
Investors’ attention was also focused on second-quarter earnings releases, which once again did not disappoint. S & P 500 companies are growing about 20% of their profits. However, Facebook’s, Intel’s, and Twitter’s disappointing claims have sparked renewed concern over tech stocks, raising questions about their growth prospects and high valuation levels that had been heavily weighted to the markets. these last years.
In the middle of the month, Fed Chairman Jerome Powell painted an optimistic picture of the US economy despite commercial uncertainties, relying on a robust labour market and inflation close to its goal. He reiterated that the central bank would gradually raise rates.
During this month, our model has gradually positioned itself in Europe on securities belonging to the banking and insurance sectors, which have been falling sharply since the beginning of the year, hoping to seize opportunities for a rebound. So we bought Crédit Agricole, CNP, Scor.
On the satisfaction side, we bought at the beginning of the month in the US, Thermo Fisher and O’Reilly Automotive, which have since achieved performances close to 10%. On the disappointment side, we are currently recording a loss on Kering of 6% following a disappointing earnings release.