Monthly report February 2023 of the zCapital Swiss Small & Mid Cap Fund (class A)

The Fund gained 1.4% in February (SPI Extra +1.5%). We bouhgt back a small position in Zur Rose once again. We increased our position in Temenos and continued to reduce our exposure to AMS Osram.

Investors were unimpressed by central bank rate hikes at the beginning of the month. The US labour market is proving extremely robust. The release of the minutes from the last Fed meeting also made it clear that market participants should be prepared for interest rates to stay "higher for longer". As a result, hopes of an imminent pivot by the central bank were dashed.

Apart from inflation, the labour shortage is the biggest challenge for companies. Wage pressures are therefore likely to persist. The SNB's monetary policy is far too expansionary relative to economic developments. We therefore expect the central bank to raise its policy rate several times this year. In this interest rate environment, equity markets have performed surprisingly well so far this year.