BMC Global Select November 2024

The performance of BMC Global Select in November was 5.92%, which was 0.71 percentage points short of the benchmark index. November was a good month for equities with the election of Donald Trump as US president.

The shares that performed the best during the month were Watsco, Progressive, and Kinsale. Those that performed the weakest were HCA, SIKA, and Ferrari.

In the middle of November, we attended ASML's capital markets day in Veldhoven, in the Netherlands. Our key takeaway from the CMD was that ASML remains the leader in machines for semiconductor manufacture. ASML believes total revenues in the global semiconductor business will be one trillion US dollars in 2030, which suggests average growth of 9% a year from 2024. The next key area for semiconductor manufacture investment is memory (DRAM) for AI chips. ASML is now delivering the most advanced EUV machines for memory chip manufacturers like SK Hynix and Micron. During November, we also visited an equity conference in Chicago and met a large number of exciting companies that we will look into further. 

The other company we want to highlight this time around is US insurer Progressive. In its latest quarterly report, the company announced that premium deposits had risen 25% y/y and that it now has more than four million insurance policies in force. This has led to net profits for Progressive rising by more than 100% y/y. 

Key market events and trends (what has influenced performance most?)

The US S&P 500 index rose by almost 4% on the day it became clear that Donald Trump will be the next US president. Between November 5 and the end of the month, the S&P 500 was up by more than 6%, making the 'Trump effect' on the US stock market clear. The market generally considers Donald Trump's corporate politics as more company-friendly for US firms than those of sitting president Joe Biden. Donald Trump has been elected partly on his pledge to cut taxes, but also on his desire to impose trade tariffs on everything imported into the US. This benefits domestic US companies but puts all those selling goods into the US at a disadvantage. Donald Trump pursues an inflationary fiscal policy that has led the 10-year bond yield to rise sharply, as the market expects somewhat higher inflation with him as president. Among his elections promises, Trump is expected to cut taxes, undertake the largest mass deportation of illegal immigrants in US history, and 'repatriate' jobs from China, among others, to the US. We believe the hefty tariffs Donald Trump plans to impose will drive up prices of goods and services in the US. He has long said he wants to 'Make America Great Again,' and he is likely to succeed with this in the short term (perhaps with an even larger budget deficit as a result), but it remains to be seen what the long-term economic effects of these policies will be.

It will also be interesting to following the games between Fed chairman Jerome Powell and Donald Trump. Jerome Powell wants to cut the policy rate in a careful and controlled manner to avoid setbacks in monetary policy, while Donald Trump wants to push pedal to the metal and spur as high growth as possible to create job opportunities. Our sense is that they are one another's opposite, pulling in different directions in how they think the US economy should be governed and what interest rates should be.

Regardless of who is president, the US equity market usually rises over their term of office. We are thus optimistic that BMC Global Select will continue to increase in value during the coming four years with Donald Trump as president.

Portfolio changes

During November, we made a change to our global fund, selling HDFC Bank, one of our Indian bank holdings. The reason was that HDFC acquired a mortgage bank that has not performed as positively as we would have liked when it comes to net interest income.

The fund's positioning—our market expectations

At the most recent update, BMC Global Select had an expected aggregated profit growth of 15.9%, contributing to the fund's future returns. Our Champions are ready for the next US president and our carefully selected companies will continue to earn money during his term. 

We thank you for your continued faith in us in investing your capital.

* MSCI All Country World NTR $ in EUR