February 2024 – S&P 500 above 5000 points

Monthly report of our funds as of February 29, 2024




12 months

5 years

Altex Momentum





Altex Quality





Altex Prudent Growth





Altex Tactical





February was a strongly bullish month for stock market indices: MSCI World in EUR +4.51%, Nasdaq 100 +5.29%, S&P 500 +5.17% and Eurostoxx 50 +4.93%. We captured all the upside in our equity funds (Momentum, Quality and Prudent Growth) with an average appreciation of 5.17% and minimal impact from hedging strategies. In our volatility fund, Altex Tactical, the gain was of +2.20%.

The key in February was inflation’s resistance to drop (CPI USA +3.1% vs 2.9% expected), which made central banks cautious about the future rate cuts markets expect. Continued higher rates translate into rising long-term rates and falling bond prices. However, unlike 2022, this time bonds are falling, and stock market are rising, as they should. This inverse relationship between bonds and stock markets reinforces economic conditions normalisation. Since economy and employment are strong, central bank policies remain moderately tight. While inflation is still central bank’s main focus, governments are looking elsewhere. The US federal government faces an election year, meaning they will be expansionary, and spending will increase, while more promises will be made. In Europe, growth in the North continues to stagnate while the South enjoys the sweet end of the cycle forgetting the time is right for saving and making investments to improve industrial competitiveness to minimize the impact of future recessions. Governments now seem more concerned about inflation than growth, so once again two contrary forces are operating on stock markets: expansionary governments vs. restrictive central banks.

With little clarity in the macro arena, we are focusing on the performance of those factors that are driving markets. In February, top contributions came from medium and small companies in the growth (+9.57% medium growth, +8.03% small growth) factor, followed by the momentum (JMOM +7.82%) factor, and the large growth companies (IWF +6.63%) and the quality (JQUA +5.09%) factors. Lagging behind are the value factor (+3.57% large caps, +3.28% small caps) and the low volatility factor (1.41%). The expansionary cycle factors (Momentum, Quality and Growth) continue to dominate.

Our current positioning is clearly bullish, with adequate protection to avoid significant falls. Large companies’ performance prompted a sharp rise in indices; medium and small companies still have a lot of catching up to do. In fixed income, we have been increasing our exposure, while keeping in mind that equities are still the main driver for returns. We expect this month to be a weaker, with some corrections that will allow us to increase exposure, since we started March with surplus cash both in the Funds’ portfolios and in the managed accounts that have increased exposure.

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