Monthly report July 2022 of the zCapital Swiss Small & Mid Cap Fund (class A)
The fund was up 6.3% in July (SPI Extra +7.2%). We reduced our exposures in Sonova, Galenica, VAT Group, Swatch Group and Lindt & Sprüngli slightly, while buying Julius Bär on weakness.
Equity markets initially recovered somewhat from their weak performance in June, although the relentless rise in inflation numbers led to selling pressure. Both the ECB and the US central bank raised key interest rates in the fight against high inflation. Meanwhile, Europe’s energy crisis continues to become more acute. Global economic indicators likewise continued to deteriorate. Despite the adverse environment, equity markets embarked on a technical rebound from mid-month.
Nearly all firms have increased their inventories owing to worries about further supply disruption. That said, the tense situation in supply chains and logistics has eased slightly of late. Although order books remain full, we are seeing first signs of a fall in order momentum. The situation remains highly challenging overall.