Passion for Swiss equities

zMonthly SMC Fund 08/2022

Monthly report August 2022 of the zCapital Swiss Small & Mid Cap Fund (class A)

The fund shed 4.7% in August (SPI Extra -5.4%). We slightly scaled back positions in Barry Callebaut, Also, Straumann, Kühne+Nagel and Julius Bär, and we made small purchases in Galenica and Baloise.

The situation on the European inflation front remains fraught. Both the Bank of England and the ECB will be unable to avoid a significant hike in key interest rates. The speech given by Jerome Powell at the annual Jackson Hole Symposium provided a taste of what this could mean for equity markets. The Fed chair’s clear message that financial markets needed to adapt to more restrictive monetary policy sent the stock markets plummeting.

Europe’s energy crisis has now spread to Switzerland. Electricity costs are likely to become a real burden for many businesses. Developments on the wage front constitute another factor of uncertainty. Equity market volatility is likely to remain at a high level, amid thin trading volumes. We remain cautiously positioned.

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