In a context of a fragmented global cycle, R-co Valor asserts its identity more than ever: agile, opportunistic management unconstrained by any benchmark.
For Charles-Edouard Bilbault, International Equity Manager at Rothschild & Co Asset Management and co-manager of the R-co Valor fund, the American dynamic reveals a two-speed market. “The American consumer is splitting in two: affluent households continue to spend, but middle- and lower-income groups are under pressure because inflation remains higher than their income growth and interest rates are still elevated.”
This heterogeneity prompts the fund to remain cautious. Created more than 30 years ago, R-co Valor remains a distinctive object: no benchmark index, equity exposure that can fluctuate between 0 per cent and 100 per cent, and complete freedom in portfolio construction. “It is a carte-blanche management style, based primarily on conviction and an understanding of the macroeconomic cycle,” Charles-Edouard Bilbault notes.
With equity exposure of around 73 per cent, slightly on the prudent side, the fund maintains a significant liquidity pocket to act swiftly when markets dislocate.
China perfectly illustrates this pragmatic approach. “In China, we prioritise sectors at the heart of Beijing’s strategic industrial plan far more than domestic consumption, which remains lacklustre,” the manager explains. This has led to a reallocation towards strategic holdings such as CATL, the global leader in batteries, and Xiaomi, now a heavyweight in electric vehicles. “Xiaomi is no longer just a smartphone manufacturer; the group has become a major player in electric mobility in China.”
In early April, during the Liberation Day period, R-co Valor carried out several waves of purchases to exploit excessive volatility, particularly in commodities when some stocks “were trading at their 2008 multiples”. At the same time, the fund reduced its risk level at the start of the summer while reinforcing contrarian pockets such as healthcare.
Another strong conviction: gold. Over the past two years, the historic inverse correlation between real rates and the yellow metal has broken down. “Central banks in emerging countries are sharply reducing their purchases of US dollars in favour of gold. This marks a deep structural shift,” highlights Charles-Edouard Bilbault. Mining supply remains under pressure: “New projects are scarce, slower to emerge and far more expensive.”
The fund’s performance is thus built on a balance between profitable tech, commodities, emerging markets and industrials. A few idiosyncratic events affecting certain companies have not altered its trajectory. For the manager, the essential element lies in the long term: “Over three to five years, our strength is taking risk again when the market no longer believes in it.”
More than ever, R-co Valor embraces its identity: a concentrated, free, deeply active fund convinced that “agility is a source of sustainable performance.”
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