Correction at the stock market—active funds stand the test of time

The correction at the stock markets in February 2018 clearly left its mark. In the universe of European stock funds, an outperformance of the actively managed products compared to the passive products is very noticeable. Mellinckrodt, Mainfirst Top European Ideas, and the Frankfurter Aktienfonds für Stiftungen have all done significantly better in this first correction after almost two years than the leading European indexes.

The worldwide decline of stock prices was particularly stark in China (-6.37%), Hongkong (-6.22%), and Germany (-5.72%) as of the end of February. Australian stocks recorded the smallest drop—with -0.37%, they fell even less in a one-month comparison than Mellinckrodt with -1.06%.

As of the end of February, 82% of our fund is invested in stocks. Taking the hedge positions into account, which amount to 14.2%, the stock net quota is at approximately two thirds (67.9%). This reflects the fact that our risk system has been changing its general assessment of the stock market since early February. We don’t expect an immediate, bigger stock crash. However, smooth sailing at the stock exchange, as of today, is over for now.

Read more about this topic in our current article on stocks What do you do when the stock exchange light turns yellow?

Changes in the larger stock positions occurred as we used the correction to replenish the long-term asset Lam Research, which we had significantly reduced in January to mitigate risk. Our company continues to have an excellent outlook, as does the entire sector.

With several purchases in the field “vacuum, semiconductors, robotics,” this topic has returned to first place in our fund. The increase of cash quota due to the overall change in risk has resulted in a decline of the share in the topic areas materials and advanced services. In these areas, different stock positions were reduced. As a result, these topics hold second and third place in the portfolio by share size. Reductions have been made in all other topic areas as well to increase the cash quota to the current total of 20%.