Monthly report September 2024 of the zCapital Swiss ESG Fund (class A)
The fund gained 0.3% in September. We added Huber + Suhner to the portfolio. We slightly reduced our exposure to Sika and Tecan, while increasing our positions in Novartis, U-Blox and Schindler.
Equity markets came under selling pressure in the first week of September. While the ECB cut interest rates for a second time, the US Fed kicked off the rate cutting cycle with a half percentage point move. Combined with the hint of two more possible rate cuts by the end of the year, this added further weight to the 'soft landing' scenario. Equity markets reacted positively. Interest rates were also cut by the SNB. Towards the end of the month, the Chinese party leadership gave the market a boost with the most comprehensive package of measures since the pandemic.
Economic data is coming in below expectations, company sentiment is subdued, and inflation is falling, thanks in part to lower oil prices. This is an ideal environment for lowering interest rates. As a result, large amounts of liquidity are being pumped into equity markets. Accordingly, markets in the US, Asia and Europe have gone into risk-on mode. For now, however, they have to deal with the US elections, which have so far received surprisingly little attention from the equity markets.
