Top Picks – Funds Selection – February 2023

We are showing here a selection of funds that might be of interest to you, either due to their recent outstanding performance, the attractive return potential or diversification benfit they may offer in the given market conditions.

Markets had a strong start to the year keeping investors on a on a roller coaster ride. The correlation between equities and bonds remained positive, like in 2022, but both asset classes rose significantly.
The markets narrative has shifted to favour a goldilocks scenario of economic soft landing and benign inflation in 2023.

Global equities, both in developed and emerging stock markets rose significantly in January amid optimism of less hawkish policy from Western central banks. China re-opening further lifted investors sentiment.

The prospect of less restrictive monetary policy and a weakening economy boosted demand for government bonds in January, including in emerging markets. The crash in corporate credit in 2022 created good entry points for investors, income and carry opportunities were supportive for both investment grade and high yield.

January was a very good vintage for actively managed funds in our OpenList.

They have added value in almost all asset classes and with a magnitude unseen for many months.

In Equities, funds tilted towards consumer-related stocks, IT and small caps posted the best outperformances. Hence, sector and thematic funds were among the highest alpha generators: Robeco Fintech (+520 bps*), Robeco Consumer Trends (+380 bps), GSAM Global Millennials (+250 bps), Thematics Safety (+170 bps) and Threadneedle Global Technology (+160 bps) to name a few.

Small caps were also among the best positive contributors, with Artemis US Smaller Companies (+100 bps) and Berenberg European Focus (+130 bps) being the best examples.

Chinese equities rallied over the month supporting funds with an overweight in this area such as Vontobel mtx Sustainable Asian Leaders ex Japan (+290 bps) and GemEquity (+190 bps).

With energy sector underperforming significantly last month, sustainable funds benefitted from significant tailwinds, Liontrust Sustainable Future Global Growth (+230 bps) and Janus Henderson Global Sustainable Equity (+60 bps) led the table.

In Fixed Income, some funds posted outstanding outperformances as well, such as Pimco Capital Securities (+520 bps) and Vontobel TwentyFour Strategic Income (+350 bps).

The fund selection was also very solid in emerging markets debt, an ongoing trend observed in the last few months. Unsurprisingly, Vontobel Emerging Market Debt (+230 bps) and Baring EM Local Debt (+60 bps) are again to be highlighted this month.

Finally, in the Alternative UCITs space, Prosper Stars & Stripes (+710 bps) was a noteworthy outperformer.

Performance figures in bracket are monthly alpha compared to respective funds’ benchmark, not absolute performance.

All the mentioned funds are exclusively extracted from our OpenList service, a fund selection list for use by Wealth Managers in Switzerland.

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