Coeli Global Select (now BMC Global Select) January 2024

Two factors spurred the stock market: higher profits from companies exposed to global technology and US infrastructure, and expectations for coming reductions to interest rates. The latter left the stock market reasonably forgiving toward companies reporting lower profits, because if shares aren’t bought now, when should they be bought? Overall, these two factors meant stock markets around the globe had a good start to 2024.

The best contributors to returns in January were semiconductor companies NVIDIA and ASML, as well as US hospital operator HCA. On the other side of the coin were the mixed bag of SIKA, HDFC Ltd, and Sterling Infrastructure. Of the three, it was only HDFC whose company results were the key reason for its share price movement, with the Indian bank posting somewhat poorer margins than expected.

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

So far, last year’s trends have continued into 2024. In particular, we see much to suggest that inflation, and thus interest rates, will continue downward, leading to increased consumer strength in the second half of the year. Another compelling observation is that the oil price has been relatively unaffected by the rising geopolitical tensions, something we see as partly stemming from the enormous investments into renewable energy at present.

Looking at the futures market, the market view is that the Federal Funds Target Rate will be around 4.0% in January 2025. If the market is correct, that means six cuts of 0.25 percentage points in 2024.

Portfolio changes

We made no changes to our portfolio during the month.

The fund’s positioning—our market expectations

Coeli Global Select continues to ascend, reaching new all-time highs, which pleases us immensely as it means all our unitholders have earned money on their investments, regardless of when they have invested. Reporting season has recently kicked off and so far, 2024 seems to have all the ingredients to be another great year. As usual, there will be rough patches, but the fund is packed full of the World’s Finest Companies and we are ready to face whatever comes our way.