Update on... Echiquier World Equity Growth ǀ October 2025
David Ross, CFA, and Louis Bersin, CFA, Managers of the Echiquier World Equity Growth Fund, La Financière de l’Échiquier (LFDE)
International equity markets fell sharply in early 2025, following the introduction of tariffs by the new US administration. These announcements were followed by a period of relative calm, which allowed the markets to rebound. The near universal cut in interest rates by the world’s major central banks also contributed to the recovery. At this stage, international equity markets are up slightly, although performances in local currency have been largely undermined by the strength of the euro. Since the start of the year, the euro is up 13% against the dollar, reaching 1.17,[1] the level at which the currency was introduced on 1 January 1999. In this market environment, Echiquier World Equity Growth has generated a very slightly negative performance since the beginning of the year.[2]
PORTFOLIO ACTIVITY
Tactical operations
We took profits on our technology stocks during the market recovery phase. We note that a number of artificial intelligence-related stocks are now trading on high valuations and that the market is beginning to show signs of excess. The surge in Oracle’s order book, driven by a $300 billion order from OpenAI, calls for caution in our view, given OpenAI’s unprofitability and Oracle’s level of debt. We have also reduced our exposure to consumer staples by exiting Walmex and reducing our position on FEMSA due to uncertainty surrounding consumption in Mexico. The fund has rebalanced its positioning between defensive and cyclical stocks, increasing its weightings in the industrial and financial sectors.
Fundamentals
Following our return to the Chinese economy in June 2024, we increased our exposure to the country by bringing Alibaba back into the portfolio in early 2025. Alibaba is strengthening its leading position in e-commerce with the launch of its local delivery service (Quick Commerce), which had 300 million users four months after its launch.
In addition, the company is at the heart of the Chinese technology ecosystem, with 36% of the Chinese cloud market. We took advantage of market volatility at the beginning of the year to take positions on Eli Lilly, AstraZeneca and Clean Harbors. The first two of these companies are enjoying remarkable growth in the fields of obesity treatment and oncology, while the third is a leading player in the United States in the treatment of toxic waste. Among the stocks we sold, we closed our position on Alphabet, as the company faces a dilemma between monetising traditional search results and promoting AI-generated ones.
INVESTMENT STRATEGY
Echiquier World Equity Growth is a portfolio built on strong convictions, focused on around 20 international large caps. The management team believes that its best ideas offer the most robust investment opportunities over the long term. Consequently, the top 10 positions in the portfolio represent a combined weighting of more than 60%.[3] These companies, selected notably for their fundamental quality and resilient growth, are exposed to megatrends that are shaping the global economy. Currently, around half of the fund is invested in secular growth stocks, while the other half is a balanced combination of cyclical and defensive growth.