Monthly report of our funds as at 31 October 2024.

Our funds performed well in a tough month for both equities and bonds.

Funds:

Altex Momentum +1.44% and Altex Quality +0.83% in a month in which all indices ended negative in local currency (S&P 500 -0.99%, Nasdaq 100 -0.85%, Eurostoxx 50 -3.46%).

Altex P. Growth dropped -0.43% (better than US Mid Cap Growth -1.24% and Russell 2000 Growth -1.25%).

Altex Tactical, weighed down by the sell-off in volatility futures, -3.06% (VIX up +38.5% in the month due to the closeness of the elections).

Overall, our equities outperformed indices, derivatives hedging subtracted and the USD added. The latter appreciated more than 2 figures (+2.32% USD vs EUR).

Markets:

Stock indices were down dragged by US election uncertainty, higher volatility, and the sharp correction of US 10-year bonds in the second half of October, while the USD rises on the back of the increased likelihood of Trump’s victory.

By share size, smaller stocks fell more than larger ones. By factors, Value fared worse than Growth.

The earnings season progressed positively, beating forecasts, although with very disparate results in terms of price trends due to companies’ expectations announcements. Of the Top 7, only Nvidia, Alphabet and Amazon closed the month positive.

In fixed income, the rise in the yield of the US 10-year bond (price decline) is notable. In Altex Momentum, we realized profits in time to avoid the fall and we no longer have exposure to this asset.

Outlook:

At the time of writing, the outcome of the US elections is already known. Trump’s resounding victory allows us to anticipate good performance of risk assets and possible excesses in valuations, that will be corrected down the line. Trump’s election is positive for US stock markets, GDP growth, and employment. Inflation risk and global imbalances will increase due to tariffs on China and Europe, and we can expect higher volatility in currencies and emerging countries given the peculiar diplomacy with which Trump approaches international negotiations. It might be over speculating, but Trump might try –as promised– to end the wars in Ukraine and Israel soon. Since the cessation of hostilities implies concessions, political and media turbulence in the regions involved is warranted.

This environment is very favorable for our funds and strategies. Thanks to our investment processes and the use of our DIPS hedging system, we can capitalize on gains in bull markets and protect during major downturns, regardless of the cause. A volatile environment with sufficiently long uptrends and downtrends will also allow us to generate returns on short positions and to outperform indices, which offer considerably less security now than they did two years ago. The over-concentration of the stock market in the 7 major companies is not sustainable over time, and it is to be expected that in the next few years mid and small cap companies will catch up. We are already positioned for this scenario, that will be heightened by the “Trump effect”.