Geopolitics continued to dominate the news this month. Hopes of a ceasefire or even a peace agreement between Russia and Ukraine fueled the rise in European markets, despite the approaching date of the tariffs announced by the US administration. Good results from European companies - particularly banks once again - also contributed to market appreciation. The EURO STOXX 50 NR index climbed 3.5%, and bond indices were all in the green, helped by the combined fall in yields and spreads. On credit in particular: investment grade +0.6%, high yield +1.0%.

Eurose continues to benefit from this momentum. The fund grew by 1.89% over the month, and has reached 3.7% since the beginning of the year.

Equities made a very positive contribution over the month, with BNP Paribas, Société Générale and Thales the main contributors. During the month, the fund initiated two new positions with the entry into its portfolio of the Spanish real estate group Colonial and the Dutch delivery company Just Eat Takeaway. Colonial, with a dividend yield of 4.8%, is an office property specialist with a strong presence in Barcelona, Madrid and Paris, thanks to the merger with Société Foncière Lyonnaise. Just Eat Takeaway is the subject of a takeover bid by Prosus, already present in the delivery sector with Delivery Hero. Exclusive Networks and Neoen are included in the offer. In view of the sharp rise in European markets since the start of the year, which has automatically increased the weight of equities, the fund has reduced several positions in order to manage its risk. The following positions have been reduced: Coface, Crédit Agricole, Eutelsat, Orange, Publicis, Sanofi, Saint-Gobain, Société Générale, Thales and TotalEnergies. At the end of February, the fund's net equity exposure stood at 23.6%.

Within the bond portfolio, RCI Banque repaid its subordinated bond early, as expected, and certain lines were reduced or sold off due to their high valuation: Nexi 2029, ZF 2029, Alstom (hybrid), ams-OSRAM 2029 and Air Lease 2030, for example. In response to the study of a potential capital increase by Verallia's largest shareholder (the Brazilian BWGI), which could trigger an early redemption clause, exposure to the issuer was reduced following a sharp rise in bonds. Management is taking an opportunistic approach, participating in Vinci's primary convertible issue, which is in high demand. Also on the primary market, some issuers offer premiums to be captured: Barry Callebaut, world leader in chocolate products, which needs to issue to cope with the sharp rise in cocoa prices; Ford Motor Credit (the American carmaker's financing division), and the Tier 2 subordinated bonds of Spanish banks CaixaBank and BBVA. In a similar vein, short bank bonds (Banco BPM 2027, Santander 2027, etc.) were replaced by longer ones: BNP 2032 or Svenska Handelsbanken 2031. Finally, the Italian inflation-indexed bond 2036 has been reinforced. Portfolio sensitivity increased slightly over the month, ending at 2.8.

The extra-financial characteristics of the portfolio show a responsibility performance of 4.9 and a sustainable transition exposure of 85.57%.

Developments on the equity markets seem to invalidate the notion of American exceptionalism introduced after the strong performance of indices across the Atlantic. The Trump administration's announcements and measures - concrete or otherwise - are currently a real source of instability, perhaps even more so for US economic agents, whether consumers or businesses. In this rather chaotic environment, the positioning of the fund's equity and bond components seems to us to offer a certain degree of serenity, with significant exposure to European defense, over 70% investment grade on the bond component, a controlled duration and a comfortable yield of 3.2%.