5.06.2023 Alpine Select Ltd.: Monthly Update May
Alpine Select has published the monthly update May 2023.
Klick here to download the monthly report.
Alpine Select hat den Monatsbericht Mai 2023 publiziert (nur in Englisch).
Klicken Sie hier um den Bericht einzusehen.
It was like ‘Groundhog Day’, this time May 2023. The US Congres-sional debt ceiling debates had the markets, the media, and the public concerned about the ability of the US to pay its bills on time. Meanwhile an agreement passed the Senate, one day after it passed the House of Representatives and once signed into law by President Joe Biden, it will allow the federal government to borrow money until after the next presidential election in November 2024.
An often-referred interest rate environment ‘Higher for longer’ is currently being priced in by the market, expecting one final rise by the FED in July (and no significant rate cuts later in 2023). This forecast differs from the significantly lower interest rates towards 2024 which were expected at the beginning of the year.
Yet, US indices did well in May: S&P 500 +0.2%, Nasdaq +5.8% (thanks to magnificent seven). Meanwhile the Euro Stoxx 50 declined -1.9% and due to weakness in Swiss heavyweights Nestlé and Novartis the SMI detracted -3.2%.
Observing the divergence in market breath, the US leading indices are dominated by a small group of large cap companies. These ‘magnificent seven’ (Apple, Microsoft, Amazon, Nvidia, Alphabet, Meta and Tesla) are up double-digits YTD and are carrying the markets on their shoulders. As applaudable as such individual performances are, the breath of the public equity market shrunk, and most individual stocks are in negative territory year to date – which is not a comforting signal.
We remain disciplined in holding 23.9% net cash.
Our position in Temenos is holding up nicely and first signs of further activist shareholder engagement were shed during the month as Petrus Advisors announced a 3.42% stake in the company.
The Idorsia convertibles (CB) are priced somewhat inefficiently. We took the opportunity to swap from the short- to the longer-dated CB with maturity 2026 enhancing our expected yield. We remain positive that a solid solution for their cash situation will be found shortly.
About Alpine Select
Alpine Select Ltd is an investment company domiciled in Zug and has been listed on the SIX Swiss Exchange since 1998. The company offers shareholders the key benefit of investing into a global diversified and CHF hedged alternative investment portfolio. The portfolio exposure is actively being risk adjusted to current market sentiment and outlook. The investment style is value oriented and the investments are selected based on the company’s target return of 6-8% p.a. above CHF risk free rate. Alpine Select maintains an active and constructive dialogue with management and board of directors of its portfolio companies in the best interest of its shareholders. Alpine Select does not charge any management or performance fees.