Sicav de Cristal 2022

Value Square |Posted 6 October 2022 by Patrick Millecam
De Kristallenfondsen van 2022

Foreword: Dealing with risk and uncertainty

It is a real challenge in these times to present awards for the best performing funds of the past year. The end of the lockdown in late 2021 was a prerequisite for the economy's recovery. But analysts adjusted their growth forecasts downward when a new wave of contagion emerged. Portfolios were then switched from growth stocks to value stocks. But Russia's invasion of Ukraine in February was a gamechanger. The rise in energy prices came on top of the rise in commodity prices. There were also bottlenecks in supply chains in a fairly tight labor market. From then on, there was no more temporary inflation. 

Inflation, rising interest rates and falling markets are factors that fund managers had to deal with between July 1, 2021 and June 30, 2022. While the winning stock funds were able to keep themselves straight with positive returns during this period, the bond funds were in the red. These categories reward the funds that were able to limit the damage. A year ago, optimism prevailed among fund managers. Today there is recession, inflation that has not yet peaked and more interest rate hikes by central banks. The economic and financial environment for managers will remain challenging in the coming months. It is now growth and inflation expectations that are driving the markets. In such an environment, managers can only build scenarios with different scenarios and hope they make the right choices. 

Classification and methodology

La Libre and De Standaard's Crystal Funds are awarded in the fall based on one year's performance as of June 30. In the current context and due to uncertain geopolitical conditions, inflation and rising interest rates, it seems increasingly difficult to choose among the very (too?) large number of financial products on the market. Investors still too often rely solely on fund performance. Today, La Libre and De Standaard are presenting awards based on returns between July 1, 2021 and June 30, 2022. 

This award highlights the best funds in each category based on their performance. These Crystal Funds focus on ten categories of funds: beveks investing in Belgian equities, beveks investing in global equities, European equities, U.S. equities, small & mid caps, beveks in corporate bonds and beveks in government bonds. This is followed by the three awards for defensive, neutral and dynamic patrimonial investment funds. 

The rankings are prepared by the company Symex and under its responsibility. They are provided for informational purposes only. The editors of La libre and Le Standaard chose a simple methodology. The funds are ranked within each category according to their -clean‖ performance, without taking into account their volatility. 

This performance is calculated based on the one-year performance from July 1, 2021 to June 30, 2022, which is weighted 75%. In addition to this performance, the three-year performance evolution is weighted at 25%. Only funds offered to the general public (retail) in Belgium with no minimum entry fee can be included in this ranking. For each nominated and winning fund, this was confirmed by the fund publishers. This is the responsibility of the authors and not the editors of the two publications. 

However, it should be remembered that performance should not be the only criterion to be taken into account when choosing an investment fund. Past performance does not guarantee future performance. This cannot be repeated enough! Therefore, these rankings are published for informational purposes only. Under no circumstances should these awards and nominations be considered investment advice. 

Remember that asset management is not a sprint, but a marathon that must be evaluated over time and the long term. Investment horizons and goals must be considered. Before investing, it is always advisable to obtain information and review the KIID (key investor information document), which is specific to each fund and informs the investor about the fund's risk level, costs, investment universe and performance. Documents with information to supplement this award presentation. 

Isabelle De Laminne

The winners speak: Patrick Millecam (Partner - Senior Portfolio Manager)

What factors explain the good performance of your fund during this period? 

The Belgian market is indeed rather a market of small and medium-sized companies. We have screened the portfolio to see if each company is reasonably armed against the challenges that affect all companies (sharp cost increases due to inflation of many raw materials, rising energy prices, component shortages, tight labor market, the automatic wage indexation in Belgium). We paid particular attention to pricing power in portfolio composition to prefer those companies with strong pricing power. We also had a relatively large cash position at the beginning of 2022, so we were less affected by the correction in equity markets. 

The portfolio stocks that delivered the strongest returns over the period July 2021 - June 2022 are Aliaxis (+54.2%), Euronav (+51.3%), Van de Velde (+45.2%), Resilux (bid, +40.4%), D'Ieteren (+38.7%), Sipef (+37.9%) and EVS (+31.2%). Of all Belgian equity funds, we have the lowest percentage of Bel20 equities. We therefore have the highest "active share" of all funds that have been in existence for at least 5 years. We are fairly benchmark agnostic. We choose those stocks with the best risk-adjusted upside potential. 

The Brussels Stock Exchange is a small market, but it contains nuggets

For the second consecutive year, the Value Square Fund – Equity Belgium C Cap won Sicav de Cristal in the category of Belgian equity funds. A small market, the Brussels Stock Exchange has significant attractions. Focused on small caps, it can take a place in a portfolio as diversification. “The Belgian market is indeed more of a market for small and medium-sized companies. There are only 107 Belgian companies with a market capitalization above 25 million euros. If we use the definitions of Euronext, there are 42 mid caps on Euronext Brussels and 22 small caps. In other words, 60% of the number of Belgian companies listed on the stock exchange (with a market value of at least 25 million euros) are small and mid caps. large caps, over one billion euros, represent 40% of the number of companies, but 93% of the total market capitalization”, recognizes Patrick Millecam, manager of the Value Square Fund – Equity Belgium.

In this context, how do you manage a fund in such a narrow market? The manager admits making his choices outside the Bel 20 index by following a policy of active management and pure stock picking. Each company is then screened. In a context of high inflation, it is above all a matter of detecting those with strong pricing power, i.e. companies that can pass on increases in costs, energy or raw materials.

In certain market situations, it is also appropriate to be able to hold cash on hold and then be able to seize attractive opportunities. But what can be the added value of such a fund compared to broader funds such as those invested in European equities or global equities? “The added value for clients and shareholders of Value Square Fund Equity Belgium lies in the strong monitoring of all Belgian equities. Every year Value Square carries out a major study on the creation of fundamental value of all Belgian companies listed in We therefore believe that clients are entitled to truly active management and good performance,” adds Patrick Millecam.

This market taken in isolation is quite discreet, but it does contain a few nuggets. For Belgian investors, certain listed companies are sometimes linked to personal experiences. By investing in this type of company, we can say that we are a little owner. “Listed companies are relatively more prominent in the media than unlisted companies. So you can follow these companies better, you can taste their products or use their products and services. Investing in what you know is stock market wisdom well known. It also allows you to have better peace of mind. This is an important feature for an investor to avoid the panic that makes him sell or buy at the wrong time. can therefore achieve a better return in the long term. And besides, there are only a few companies that depend solely on the Belgian economy. With a Belgian equity fund, you can also profit from the development economy in the rest of the world (Europe, the United States and Asia), “says Patrick Millecam. It is true that Belgium is a small country with an international outlook. Our small Stock Exchange therefore has advantages that the winner in the category of funds invested in this market took advantage of.


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