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Good news from Europe !

Echiquier Major : good news from Europe !

Questions to Frédéric Plisson and Jean-Charles Belvo, Echiquier Major managers



Echiquier Major invests in major European growth stocks that are leaders in their sector. The fund has started the year with a performance of +10 % since 1 January 2015 (annualised performance since its creation: +8.39%*). Frédéric Plisson and Jean-Charles Belvo, the fund’s managers discuss their strategy and their current investment ideas.

What are your forecasts for the European economy at the start of this year?

Europe has not yet truly emerged from either its economic stagnation or its political stalemate. However, recent developments suggest a return to positive growth for European companies, which could harbour welcome news in 2015.
-The ECB has announced a hitherto unseen programme to repurchase €60bn in debt per month out to September 2016 at least. This initiative helps distance deflationary risk, making the backdrop more beneficial to risk taking and the quest for yields.
The plunge in the euro against the dollar (-12% over 2014) makes investors more optimistic on the European economy.
The nosedive in oil prices (-46% over 2014, expressed in$) is also a support factor for European consumer spending.

These factors are favourable for a tactical catching up in European equities. How are they especially beneficial for major growth stocks?

-In a backdrop that remains troubled and fairly uncertain, investors are looking for stocks offering increased visibility, which is the case of companies that are leaders in their sector.
-The currency environment is very attractive for growth companies boasting healthy balance sheets and high international exposure.
-The plunge in commodities prices is positive for company cost structures and is especially beneficial to stocks that should make the most of the redistribution of purchasing power.   

What are your convictions at the start of this year?

-The high volatility underway since 2014 has provided an opportunity to take positions or strengthen lines in companies capable of delivering better-than-average results thanks to their leadership and the quality of their business model. This is the case of GRIFOLS, AMADEUS and FAURECIA, which are set to benefit in 2015 from the significant transformations undertaken since 2008.
-We have taken positions in stocks favoured by the decline in the euro/dollar exchange rate, such as DAIMLER and players in the luxury sector exposed to US consumer spending (HERMES and LUXOTTICA).
-We have undertaken strict arbitrage moves in the Swiss segment, which now accounts for 3% of the fund vs. 8.5% previously.
Our stance remains opportunist: the market is providing an opportunity to strengthen positions in attractive stocks that are temporarily suffering from the current context according to our analysis. This is the case of Spanish textiles group INDITEX.

How is Echiquier Major’s management philosophy evolving?

-We remain loyal to the two pillars of the Echiquier Major philosophy: being free to think the market differently, and following a long-term vision.
The SRI stance remains the guiding thread in our management since it helps better understand the management team and culture of each company, and to assess extra-financial risks. During recent months, the focus has been placed on an in-depth study of company governance.

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Echiquier Major presents the risk of capital loss. Its management is discretionary: there is a risk that the fund may not be invested at all times in the best-performing stocks. For further information on risks and costs levied by the UCITS, please consult the prospectus and the KID available on simple request.
* performances as of 11/02/2015. 3-year volatility: 12.08 08