The Fund's performance was negative for the month, underperforming its benchmark, which also declined.
The Fund was adversely affected by its exposure to the healthcare sector, particularly Novo Nordisk and Vertex, which faced a challenging month.
Similarly, more defensive stocks such as Colgate and Procter & Gamble also experienced declines this month.
Conversely, Hermès and SAP benefited from the buoyancy of the European markets this month and were among the top three contributors.
Our macroeconomic framework continues to advocate for a defensive approach to equity markets.
High valuations in the US leave little room for earnings disappointments in 2025, making it essential to focus on quality companies with strong profitability.
The healthcare sector has been impacted by the appointment of RF Kennedy Jr., but we believe the risks are exaggerated and remain highly confident in this sector despite two years of historical underperformance relative to the broader market.
Regarding Novo Nordisk, we had reduced our exposure in recent months but slightly increased it following the recent announcement. The recent decline in prices does not undermine our long-term thesis on GLP-1 and continues to underestimate the size of the total addressable market.
North America | 70.7 % |
Europe | 29.3 % |
Total % Equities | 100.0 % |
Market environment
Market momentum waned in December, partly due to the Federal Reserve's decision to cut interest rates by 0.25%, while signaling a slower pace of easing for the upcoming year.
This decision tempered investor expectations and led to profit-taking in equities, which also caused the dollar to rise.
From a sectoral perspective, the technology sector ended the year higher, buoyed by semiconductors, while more cyclical sectors such as energy and financials experienced sharp declines.
European markets ended the year on a positive note, despite a drop in its largest capitalization, Novo Nordisk, which disappointed investors following the announcement of results that fell short of expectations for its new experimental anti-obesity drug.
Emerging equity markets exhibited some regional disparities, with a sharp rise in China and declines in Korea and Latin America