With an increase of +12.74% (share class V), the NESTOR Europ4 fund rose substantially in the fourth quarter. In 2019, the overall performance of +37.45% is well above the benchmark MSCI Europe index (+22.84%). In contrast, volatility (1 year) was 10.68, below the benchmark index (11.89).
After we reported a breather in the third quarter, numerous stocks made a strong start in the final quarter. Kering, Moncler, Amplifon, Amadeus Fire, Cewe, Jumbo, Mutuionline and even the new acquisition Vidrala reached new all-time highs.
The NESTOR Europa fund thus achieved an exceptionally good result in 2019. The liquidity built up in autumn 2018 was fully invested again at the beginning of the year after the interest rate situation had experienced a complete turnaround and the economic situation had also become less dramatic. Our extensive selection of European companies, with which we supplement the portfolio in certain situations, proved to be an advantage. Thus, "bombed-out" cyclical companies such as Dürr or Biesse made gratifying performance contributions.
The position in the world's leading hearing aid specialist Amplifon, which was patiently built up during the previous year's sellout, also proved to be a direct hit. In any case, our "value builders" in 2019 fulfilled expectations of being able to achieve excellent results even in a mixed economic environment.
Construction suppliers and lifestyle defy economic worries
Building suppliers Steico, Balco, Nordic Waterproof, Sto and H + H International also developed very positively in operational terms, with only Rockwool falling short of expectations in 2019. In the lifestyle sector Adidas, Kering, Fenix Outdoor and Moncler were convincing. In this sector, the performance of New Wave was disappointing. However, since the economic situation is convincing and the valuation still promises room for improvement, the Swedes continue to enjoy our fullest confidence. We had classified these two sectors as particularly resistant to general economic trends in 2019.
Tinexta from Italy was sold, as we had surprisingly identified a number of weaknesses in its operations. However, the investment was very successful and had almost doubled. The French manufacturer of safety clothing, Delta Plus, was newly included in the NESTOR Europa fund in autumn with an initial position.
The position in Ökoworld AG was also significantly expanded (see below).
Germany's share falls to a low point
In 2019, Germany's share in NESTOR Europa fell to 25.01%, its lowest level since we took over the fund mandate in July 2005. On the one hand, we have systematically expanded our selection in recent years, especially in Lombardy and Scandinavia, and on the other hand, unfortunately, we no longer find as many attractive candidates with an above-average risk/reward profile in Germany as in the past. The first small positions in Poland (Ambra) and Russia (Novatek, Sberbank) performed well.
Ökoworld AG basks in the glow of favourable regulation
Although we are not a supporter of the current eco-socialism, we believe that a sustainable investment philosophy makes perfect sense. A pioneer in this respect is Ökoworld AG from Hilden, which has been exclusively dedicated to this topic for years. The company has succeeded in launching several products that now offer both good performance and sustainable volumes. In addition to the "Ökoworld Ökovision Classic" (fund volume approx. € 1.218 billion), which grew enormously in fund volume in 2019, the "Ökoworld Rock'n Roll" (€ 120 million), the "Ökoworld Klima" (€ 150 million) and the "Ökoworld Growing Markets 2.0" (€ 131 million) should also have excellent sales opportunities. In addition, the company repeatedly succeeds in acquiring high-performance sales partners. As we have identified many parameters at Ökoworld AG that we use as a basis for our "value builders", we have strongly expanded our positions in the fourth quarter during a period of weakness in the share price. It should also be noted that regulatory support in the area of sustainability is only likely to be fully developed over the next few years. Although the company's reporting often has to be carefully analysed due to special factors, the company can be said to have a fundamentally shareholder-friendly orientation. This is supported by the good dividend policy and sensible equity management due to share buybacks. We are confident that the company will continue its current successful course in the coming years. The collection of performance-based fees in good years (including 2019) should provide additional income.
Outlook
Lev nu, dö sen - Live now, die later
"Lev nu, dö sen" (live now, die later) is the title of a recent Swedish pop song. The risky and reckless monetary policy of the ECB, on the back of the "little man", could hardly be better described. This leaves the investor with few options to escape the creeping expropriation of purchasing power. Investments in superior business models are one of them.
As we continue to find outstanding business models at attractive prices on the stock market, we remain fully invested and, from today's perspective, expect few changes in the portfolio in the first quarter. Inflows are currently invested immediately, preferably in phases of political tension.
Given the general starting position (low interest rates, stable economy), risk premiums could tend to fall further and drive the stock markets. Since there is still a lot of money parked on the sidelines, we consider further price rises in the first quarter to be plausible from this perspective as well.