Focus on Echiquier Major SRI Growth Europe
Adrien Bommelaer, Co-Head of Growth Team & Fund Manager, Paul Merle, CIIA, Fund Manager of Echiquier Major SRI Growth Europe, La Financière de l’Échiquier (LFDE)
2025 was marked by intensified geopolitical tension and President Trump’s U-turns, especially on customs tariffs. In light of this, the strategy of Echiquier Major SRI Growth Europe, focused on large cap, high-quality European growth stocks, suffered from the sharp rotation into value stocks[1]. The underperformance of 2025 offers an attractive entry point, while two “growth” themes have emerged – European banks and defence – in which your fund has now taken positions.
Transactions based on the economic outlook
Confronted with the uncertainty generated by Trump’s unpredictable policies, we have strengthened the fund’s defensive profile by increasing the weighting of stocks such as L’Oréal, AstraZeneca and Allianz, and reduced our exposure to stocks sensitive to the weak dollar.
We have also cut our exposure to companies suffering the risk of AI-led disruption and have added to our holdings in companies that will benefit from the heralded enormous investment in data centres, such as ASML and Prosus, which owns 25% of Tencent and which we believe serves as an attractive vehicle for the AI theme in China.
Transactions based on fundamentals
The fund is now investing in the banking sector – Banco Santander et Intesa Sanpaolo – as a result of a paradigm shift. Restructured, and helped by the current deregulatory political climate, the sector is renewed with higher profit margins and enjoys favourable market conditions – high interest rates and a steepening yield curve – conducive to EPS growth. The sector is thus recording high RoTE and increasing net interest income, for reasonable valuations. Furthermore, sovereignty has become a growth theme, benefiting from high barriers to entry. Consequently, we have begun positions in Thales and Safran to take advantage of the increased defence spending of European countries seeking to strengthen their strategic autonomy.
Investment strategy
Our investment strategy is reflected in a portfolio that focuses on some thirty strongly held convictions. Our rigorous selection process favours high-quality growth companies that are leaders in their sector and enjoy pricing power[2] that allows them to maintain high margins and overcome cyclical fluctuations, in spite of customs tariffs.
Quality is an attractive factor in an uncertain world, and the underperformance of 2025 offers an entry point. We believe that there is huge upside potential for high-quality European growth stocks, especially as the “quality” names continue to trade at a discount in Europe in comparison to other regions of the world, and as the quality premium has returned to attractive levels, far off the highs of 2020 and 2024. Our positioning has been designed to face up to 2026, with a portfolio fully invested in quality stocks able to capture long-term value creation.
Disclaimers: The fund is mainly exposed to the risk of capital loss, equity risk, the risk associated with investing in small and mid-cap equities, and sustainability risk. Please read the regulatory documents available on our website www.lfde.com. Investors should be aware that certain units/shares may not be available for sale in their country. The information, data and opinions provided and the stocks and sectors mentioned are for information purposes only and do not represent an offer to buy or sell securities, investment advice or financial research. The opinions expressed reflect the views of the manager. LFDE shall not be held liable for these opinions. The decision to invest should not be based solely on the non-financial aspects of a fund and should take into account all other characteristics, in particular its risks, as described in its prospectus.
[1] Discounted
[2] Power to set prices