February was another strong month for equities market. The MSCI World Index was up 4.3%* for the month and the NASDAQ Index was up 6.2%*; the rally was driven by the technology sector once again with the Artificial Intelligence (AI) darling, Nvidia, seeing its share price increasing by 28.6% for the month of February. The fund underperformed the benchmark, as it was only up 1.4% because of our exposure in long-term US bonds which declined during the month.
All returns are in USD
In terms of fund, the underlying names performed well with the best performers being Ferrari which was up 22.8%, Idexx Laboratories (+11.7%) and Crowdstrike Holdings (+10.82%). Ferrari reported strong Q4 FY23 earnings, beating market expectations, as their strong performance was driven by higher volumes and product mix. They’ve seen an uptick in personalisation of their cars, which allowed them to set higher prices offsetting inflation which they expect to continue through the supply chain. Personalisation accounted for 19% of their revenue for FY23. Furthermore, the order book on their current models is until 2025 and they expect to launch their first fully electric vehicle in the last quarter of this year.
U.S. inflation data came out higher than market consensus estimates. Inflation was 3.1% year-on-year, lower than the previous reading of 3.4% but higher than the expected reading of 2.9%. Their unemployment rate remained flat at 3.7% for three consecutive months. In terms of bond prices, the iShares 20+ Treasury Bond ETF (TLT US Equity) declined by 2.3% because of the market pricing in the Fed rate cuts to happen further out during the year resulting in negative performance of the bond.
Overall, February reflected the ongoing optimism in the equities market, particularly in technology sectors. The economic landscape presented a mixed picture, with higher-than-expected inflation and positive job growth, contributing to the dynamics influencing market movements.