January 2024 – Large companies drive S&P 500 to all-time highs

Monthly report of our funds as of January 31, 2024





12 months

5 years (cumulative)

Altex Momentum 





Altex Quality 





Altex Prudent Growth 





Altex Tactical








January continued the bullish inertia with which 2023 ended. The MSCI World ends at +2.85% in EUR; S&P 500: 1.59%; Nasdaq 100: 1.85%; and Eurostoxx 50: 2.81%. 


By company size, much better performance of large vs. small stocks (Top 50 S&P +2.92% vs. S&P Small Caps -4.09%). 


By factor, Momentum (JMOM +3.23%), Quality (JQUA +2.63%) and Growth Big Caps (IWF +2.44%) once again stood out. Low Vol Equities (SPLV +0.73%) and Value Big Caps (IWD +0.06%) performed modestly. Small companies were negative in both Growth (IWO -3.11%) and Value (IWN -4.63%).


The main catalyst for this dispersion of returns is the tension generated by the slight rebound in US inflation on 11 January (3.4% y/y vs. 3.2% expected). This triggered a spike in implied bond yields and a market correction that was most pronounced in US regional banks and smaller companies in general.


Good news in semiconductors, communication, and technology, overall. Demand-side momentum in cloud and artificial intelligence has boosted the valuations of companies such as Nvidia, Microsoft and Meta, pushing up other smaller companies that benefit from the expansionary cycle of in the larger sectors. Much weaker performance in sectors such as energy, metals, utilities, and retail. The higher interest rates are affecting companies such as Tesla, which despite its technological bias, obtains most of its revenue from car sales (a product usually purchased with financing).


On the macroeconomic front, Central Banks are cautious about future interest rate cuts. They will not lower rates until inflation is well under control (barring an unexpected crisis – even if it is not stated openly). No recession is in sight in the short term, less probable in election year in the US, that always triggers increased public spending. This scenario lengthens the end of the current cycle and delays downturns until probably 2025, although markets are discounting them from mid-2024 onwards.


Our quantitative analysis also suggests a promising scenario going forward, with several indicators pointing to a bullish year even though a short-term correction is expected between mid-February and the end of March. This will be a good entry point to increase risk in portfolios.


In our funds, the biggest gains were captured in Altex Momentum +3.96% and Altex Quality +4.91%, both of which have a higher large company weighting. Altex Prudent Growth follows with +1.18% slightly dragged by medium-sized companies that are lagging behind despite their high potential. Altex Tactical ends January almost flat, -0.16%, after the increase in volatility this month. Hedging strategies have hardly been activated, with positive results on the S&P 500 and slightly negative on the Nasdaq 100.


We kept our risk levels unchanged at the start of February and a high exposure to USD, as it continues to be bullish. Nonetheless, all is ready and in place to add protection to the portfolios if market conditions change.


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