The Equitile Global Equity Fund (Ireland-domiciled ICAV) follows the same strategy and principles as the UK domiciled Equitile Resilience Fund. 

Equitile Global Equity Fund

Latest Overview - October 2022  (Print version: GBP Class, USD Class, EUR Class, NOK Class)

Overall, equity markets recovered their composure in October, albeit with considerable dispersion of returns. This was particularly the case within the U.S. mega caps where, for example, Amazon, Alphabet, Meta and Microsoft fell 9%, 6%, 31% and 2% respectively, while Apple bucked the trend with a 9% gain. You are invested in Apple, Alphabet and Microsoft.

From a macroeconomic perspective, we are unconcerned around the weakness in Meta, which we attribute to malinvestment in their Metaverse project and an updated privacy policy from Apple’s IOS. On the other hand, as a bellwether of consumer spending, the weakness in Amazon is more concerning. During the year, U.S. mortgage rates have risen from 3% to 7%. These higher borrowing costs, on top of higher food and energy costs, look to be setting up conditions for a sharp consumer slowdown in coming months.

For this reason, we believe, the Federal Reserve, and other central banks will soon be forced to pivot back toward looser monetary policy. We expect this will, in turn, help equity markets and other risk assets begin to recover. That said, we are concerned by the pace and degree of interest rates tightening already implemented by central banks. Even if this year’s rate hikes were to be quickly reversed, households and corporations may still choose to reduce their borrowing in fear of future interest rate shocks. The 2022 interest rate shock is now in the historic record and as a result risk models, both implicit and explicit, will be pushing households, corporations and perhaps governments to reduce borrowing levels for years to come.

During October we have again been relatively busy shifting the composition of your portfolio. We have further increased your investment in the energy companies which now forms your largest sector exposure. These new investments have been funded by further reducing your exposure to technology companies, particularly those involved in the semiconductor industry.