Passion for Swiss equities

zMonthly ESG Fund 01/2023

Monthly report January 2023 of the zCapital Swiss ESG Fund (class A)

The fund increased by 5.7%. We slightly increased our holdings in Ypsomed and Roche, while taking profits on Meyer Burger. We also sold part of our holding in Geberit.

Global equity markets had a brilliant start to the new year. A further fall in inflation numbers was the key factor behind the optimism. This rekindled hopes for a less restrictive monetary policy from the Fed. Optimism was also fed by the mild winter in Europe, which led to a significant easing of energy prices and reduced the threat of power shortages. Additionally the earlier-than-expected ending of China's zero-Covid policy contributed to the buoyant sentiment.

The majority of market participants hope that US interest rates will be cut in the second half of the year. The Fed, however, is signalling that there won't be a rate reversal this year. Although the base effect means that inflation is likely to fall in the first half of the year, second-round effects are being underestimated, in our view. The fact that February is expected to kick off with a series of rate hikes is sure to give equity markets a reality check.

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