Monthly report May 2022 of the zCapital Swiss Small & Mid Cap Fund (class A)
The fund shed 3.2% in May (SPI Extra -3.8%). Roche bearer shares were added to our benchmark index SPI Extra. We have built up a position following the sharp slide in the share price. We also made additional purchases of Tecan, Straumann and Julius Bär. At the same time, we reduced our exposure to Sulzer, Ems Chemie and Valiant.
Equity markets embarked on a rollercoaster ride following the US Federal Reserve’s Meeting in May. US inflation continued to gain breadth, starting to hit consumer sentiment, with negative newsflow from multiple US retailers evidencing the impact of rising fuel and food prices. Against this backdrop, the global equity index recorded falling prices for seven weeks in a row before a technical countermovement set in towards the end of the month.
The fundamental situation on world markets has continued to deteriorate. We are therefore not surprised by the fact that profit warnings have been emanating from various sectors. Further forecast adjustments in the corporate sector ahead of the first-half numbers could put pressure on market sentiment. Investors will therefore require strong nerves in the coming period. While the countermovement could continue for some time, it is unlikely to be worth chasing after rising share prices, in our view.