September was a positive month for equities despite ongoing political and growth concerns. We saw a reversal of August trends as real rates backed up, equities rose and gold posted its weakest month of the year. However, arguably the biggest event in the period was the style factor rotation out of growth and momentum towards value.
In politics, the US presidential impeachment inquiry and the UK Supreme Court verdict against UK Prime Minister Boris Johnson has added to the medley of macro challenges. Meanwhile, the back and forth in the trade tariff news flow shows no sign of abating. Central banks announced more monetary easing in response to inflation and economic worries amid increasing concerns that global labour markets and consumer data could soften. Elsewhere in Europe, recent economic data within the Euro zone points to a gloomy outlook. Turning to equity markets, Financials, Oils and Basic Resources led sector performance.
For the L&G European Trust, the fund disappointingly reported a negative return of -0.5%. Both stock selection and sector allocation were small negatives. This was most acute within selection in Consumer Services and Industrials, alongside the drag from our underweight in Financials. Individually, Delivery Hero, Adyen, Ubisoft and Remy Cointreau were the biggest detriments, predominantly led by the rotation out of growth names. On the flipside, we saw positive contributions from Varta, Umicore and Shop Apotheke Europe. On activity, we introduced new positions in Puma and Teamviewer. Daimler and HelloFresh were both sold.