Fund Update : R-co Conviction Equity Value Euro — March 2026

Equity markets performed unevenly in a highly volatile February, marked on the one hand by rising international tensions, but also by multiple fears related to AI. This environment weighed on the US market (S&P down 0.9%)¹, where macroeconomic data was mixed (fourth-quarter 2025 GDP lower than expected at +1.4%, but unemployment rate down to 4.3%)¹. The MSCI World rose +1.5%, helped in particular by the eurozone, which outperformed at +3.5% in a diversification strategy¹. Gold continued to benefit from its status as a safe haven, rising +7.9%¹.  

In the eurozone, the narrative of potential disruption from AI played a central role in the dispersion of sector performance. The new acronym “HALO” – Heavy Asset Low Obsolescence – highlighted the sectors that investors considered least susceptible to disruption: telecoms (+18.7%), food distribution (+17.8%) and real estate (+13.1%)¹. Conversely, media fell by -7.7% and banks (-2.4%)¹ also appeared to be under threat in the eyes of the market. It should be noted that while the technology sector ended the month flat, there was considerable dispersion according to this same analysis. Hardware players were favored, such as STMicro (+19.2%), while software and IT services companies were heavily penalized (Dassault Système -20.1%, CapGemini -18.5%)¹.  

In terms of management style, the Value style² (+3.9%), driven by Telecoms and Energy (12.4%), outperformed the market by 45 basis points and the Growth style³ by 60 basis points¹. The valuation premium of Growth relative to Value remained at 72% over the month¹. We remain optimistic that this premium, which began normalizing three years ago, will continue to do so given i) the high interest rate environment, which is set to persist, and ii) the revival of the European economy, which appears to be on the horizon despite the tense geopolitical context and should benefit the financial and industrial sectors.  

The R-co Conviction Equity Value Euro fund underperformed the market, rising by +1.8%⁴. This underperformance was mainly due to our overexposure to the banking sector. From a stock selection perspective, the market's perception of “AI losers” cost us dearly through our positions in Capgemini and Wolters Kluwer (-13.7%). In the automotive sector, Stellantis' (-16.3%) profit warning led to a sudden correction in the stock⁴. 

During the month, we built a new position in Heidelberger Materials. The German group suffered from rumors of the European Commission easing carbon quotas. Although we believe the Commission is now taking a more pragmatic approach, we think that it will only partially back down on its climate ambitions. We also initiated a position in the real estate group Unibail-Rodamco due to the quality of its portfolio and the still significant discount on commercial real estate at a time when real assets appear to be regaining their appeal. We also made a few intra-sector arbitrage trades, particularly in telecommunications, selling part of our KPN position to strengthen Deutsche Telekom.  

Europe and the eurozone in particular are once again becoming genuine sources of diversification in the equity markets, which is also reflected in the fundraising figures. Less concentrated than the United States, it combines still relatively attractive valuations with natural hedging in the event of a decline in the dollar. In 2026, the combination of infrastructure plans in Germany and European rearmament could transform already solid resilience into a more sustainable recovery. This remains our central scenario despite the current geopolitical turmoil. Our portfolio remains positioned to capture this momentum and support this phase of revitalization.