FUNDS | MTD | 2026 | 12 months | 3 years Accum. |
Altex Momentum | +1.26% | +4.35% | +10.70% | 41.26% |
Altex Quality | +6.70% | +28.93% | +37.51% | 88.48% |
Altex Growth | +3.99% | +28.24% | +39.98% | 55.49% |
Altex Tactical | +2.40% | +4.50% | +15.88% | N/A |
June was a good month for our funds, especially for Altex Quality and Altex Growth, that posted returns of +6.70% and +3.99%, respectively. Altex Momentum, with the returns of the different blocks varying widely, rose +1.26%. Altex Tactical gained +2.40%, thanks to our efficient management of the volatility spike of June 5 to 10.
The Altex DIPS hedge made a negative contribution during the month: from -0.34% to -1.42%, depending on the fund.
The USD appreciated by +2.04% against the EUR. The hedging strategy remained flat for the month.
Markets:
On June 17, the U.S. and Iran signed a Memorandum of Understanding, which included the commitment to reopen the Strait of Hormuz. The oil market had already anticipated the easing of tensions, and prices fell for most of the month.
On June 18, the Federal Reserve held its first meeting (FOMC) chaired by Kevin Warsh, at which interest rates were kept unchanged, and two important messages were sent: first, that inflation would fall to 2%, and second, that any further measures are delayed until the five working groups the Chairman has established to review how the Fed analyzes markets and how its objectives are addressed release their findings.
The Chairman asked these groups to examine in greater depth:
- Communications: he wishes to lower the Fed’s forward guidance and to reduce the use of communications as a means for managing expectations,
- Balance sheet: he aims to reduce the volume of financial assets held by the Fed,
- Quality and timeliness of the data used in the Fed’s measurements: much of the data is already outdated by the time it is used,
- Employment and productivity: how AI can significantly transform the labor market,
- Inflation measurement, causes, and transmission mechanisms: updating economic models.
Gold and silver prices plummeted dragged by lower inflation, reduced geopolitical risk, and a slightly more restrictive policy, and bonds remained low due to sales, or less-than-expected buys, from the Federal Reserve.
Volatility continued in the technology and semiconductor sectors, with sentiment swinging between fear and euphoria from week to week. Markets began to worry about excess investments in AI and punished the largest companies, while rewarding chips and memory providers. Mega-caps then began to announce plans to produce their own chips to lower costs and alleviate manufacturers’ bottlenecks, which brought about a momentum shift in the first weeks of July.
In June, indices had already begun to show signs of momentum fatigue, and resistance to further gains, dragged by the underlying stocks’ varying performances.
Nasdaq 100: -0.19%, S&P 500: -1.07%, Dow Jones Industrial Average: +2.52%, and Eurostoxx 50: +4.59%.
Small-cap companies significantly outperformed large-cap companies: S&P Top 50: -4.7% vs. S&P 600: +7.3%.
The sectors with the largest gains were Home Builders (+12.7%), Semiconductors (+9.5%), and Regional Banks (+8.2%). The biggest loser was Gold Miners, down -15.7%. Oil & Gas Exploration and Communications also weighed on the indices, falling -7.2% and -5.5%, respectively.
The Defensive and small-cap factors were the best performers: High Dividend and Low Vol. were up +5.2% and +3.9%, respectively. Small-Cap Growth and Small-Cap Value rose +3.6% and +3.8%, respectively. On the downside, Big-Cap Growth lagged behind, falling -2.8%.
Europe, India, and Japan rose by +2.8%, +1.7%, and +0.9%, respectively. Brazil and China fell by -3% and -9%.
The price of Brent crude fell by -20%, and gold and silver fell by -11.7% and -22.2%.
Outlook & Positioning:
Although from a macroeconomic and geopolitical point of view, markets are recovering, valuations continue to be highly polarized, driven by the massive investments in AI and related hardware. High demand is not sufficiently covered by the supply, making prices skyrocket, which increases the risk for companies that are investing in CAPEX. The current supply production levels will eventually lead to a surplus, while software development continues to boost productivity and resource efficiency. This environment has led to a considerable increase in volatility, fueled by the concentration in indices and the cyclicality of the most overvalued assets.
Our base-case scenario is one of high growth and moderate inflation, with strong volatility in the semiconductor, memory, and data center construction sectors. Although there are also substantial developments in the biotechnology and healthcare sectors, they are often distorted by fiscal policy. As space infrastructure begins to compete head-to-head with terrestrial communications infrastructure following SpaceX’s IPO, the space sector will also converge with the telecoms sector.
In our latest rebalancing, we reduced our exposure to materials, mining, and metals. We slightly increased our exposure to technology, while cutting back on our remaining overexposure to industrials. The healthcare sector has been gaining weight, particularly biotechnology and niche companies. We continue to show a strong correlation with the momentum factor, which performed very well in June but corrected at the beginning of July. We hold a long exposure to the USD and are fairly active in index hedges (Altex DIPS). With the exhaustion of index momentum, the likelihood of falls has increased, and we have held short positions relatively frequently. The contribution from hedges remains negative, MTD and YTD, but it will recover if there is a deeper crisis.