For the second month in a row, Europe's main equity indices stood out, confirming an ever-widening gap with their American counterparts. In Asia, Chinese equity markets performed spectacularly, buoyed by artificial intelligence, renewed optimism and prospects for economic recovery. The month was marked by the geopolitical scene and Trump's intervention in a stormy attempt to negotiate peace between Ukraine and Russia. On the domestic front, while US economic indicators did not reach worrying levels, they did give rise to fears of a consumer slump. These statistics will be particularly closely watched in the coming weeks, against the backdrop of the implementation of tariff barriers. As for the ECB, the next rate cut is fully integrated, while the landing debate remains open. In China, the politburo announced its intention to stabilize the real estate market and the Chinese stock market, a message confirming the authorities' pivot to turn around the economy. At the same time, Xi Jinping held talks with the main leaders of the Chinese tech industry, sending out a positive signal about the sector.
In this environment, the primary market picked up with $6.8 billion. The non-dilutive convertible bond proposed by the Vinci Group was subscribed. The proposed valuation, coupled with the prospect of a rebound in the underlying share price, justified such an investment on a 2030 maturity. The portfolio also participated in the issue of the Tencent 2030 exchangeable bond proposed by Goldman Sachs, enabling the portfolio to sell its position on the 2027 issue and regain better convexity. On the secondary front, Akamai, Dexcom, Bechtle and Evonik were reinforced. Profits were taken on Spotify, Alibaba, Shift4, Rapid7 and Zillow. The portfolio welcomed new signings Shopify and Affirm.
Over the month of February, the fund posted a performance of 0.88% versus 0.4% for its benchmark index, the Refinitiv Global Focus Hedged CB (EUR). Convertible bond valuations were mixed over the month. With already high levels, the valuation of US convertible bonds retraced slightly. European convertibles remained stable, while Asian convertibles rose by around 50 basis points to reach their theoretical value. The rise in equity market volatility is benefiting the asset class, which offers diversified, less volatile exposure. The level of carry and the anticipation of a rebound in the SMID segment are two important catalysts for the coming months. The fund has a balanced positioning, with a delta of 58% and a current yield of 1.1%.