Q3 2024: Powerful half-year results generate positive returns
Well-received half year figures combined with positive macro-economic news made for a nice third quarter in the stock market. Investors in the Sustainable Dividends Value Fund achieved a return of 4.2%. This marks the fourth quarter in a row with a positive result, and a total return of over 20% was achieved in those four quarters. The central banks of Europe and the United States have now actually taken the first steps, and the long-awaited interest rate cut is a reality. Both consumers and businesses will benefit, fuelling economic growth. At the same time, lower interest rates will contribute to analysts assigning a higher present value to companies’ future cash flows. This means price targets could go up in the coming quarters. In particular, stocks whose cash flows are further into the future – such as companies active in the energy transition – will benefit. Small and mid-caps, which have lagged sharply behind the stock market in recent years, may also show price recovery as a result of the fall in interest rates. Keeping in mind the prospects of a further interest rate fall in the coming quarters, investors will look for lagging and sometimes severely undervalued stocks. Our small and mid-caps are good examples of this. The valuation of our portfolio is well below that of the market, and we expect to benefit from this in the coming period.
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The fund
Sustainable Dividends offers an investment fund that invests in a well-diversified portfolio of European companies at the forefront of the sustainability transition. Our focus is on a disciplined investment process, while applying both qualitative and quantitative financial criteria.