Skip to main content

Monthly Report 10/2022

By November 5, 2022March 13th, 2023No Comments

Dear Friends and Investors,

The KEN European Growth Champions Fund gained 3 66 in the month of October, with the long book contributing 10 55 and the short book costing 6 08 The average net exposure was 42 05.

Overall, the market environment was strong, and the losers of the year suddenly became the winners of the month This made active stock picking and exposure management all the more essential, and at times we took opportunities to increase the fund’s exposure significantly With a view to the next six months, there are no longer many fundamental signs for growth especially in cyclical sectors Rather it seems that many companies are becoming more cautious when giving guidance on 2023 Our top picks currently include Baywa Jungheinrich and Zalando, all three of which spurred the performance of the long book Baywa and Jungheinrich both raised their guidance for 2022 in October Baywa was one of the few stocks to profit from several trends simultaneously strong demand and price inflation for renewables, construction materials and agricultural commodities As the largest distributor for the solar industry in Europe, Baywa can also draw on its own solar capacity in production and operations and is aiming for 3 GW by 2025 Likewise, Jungheinrich also upgraded its guidance, and in a bear market rally as the one we saw in October, stocks like Jungheinrich make significant gains, climbing by 20 48 for the month The stock had fallen by 50 year to date, presenting a good opportunity for bargain hunters to build up a position from a discounted price Zalando boasts a solid balance sheet and generates positive cash flows, and its peers are having difficulty keeping pace The company had fallen by over 70 year to date, and here too we saw ample opportunity to buy and profit from a price recovery We have hedged the sector risk in the short book Unlike in previous months, the short book was unable in October to make a positive contribution to performance However, we believe we are strategically well positioned for the persistently volatile market environment.