Bottom Fishing French Equities
The announcement made last June 9, 2024 triggerred a sell off in the French stock market. $FRA40 dropped 8.5% from highs and few ETFs like the iShares MSCI France ETF fell 9.3%. It also affected European ETFs like iShares Core MSCI Europe dropped 5.1%.
Our infrastructure bets was not spared with $FGR.PA (Eiffage SA) descended 20% and $DG.PA (Vinci S.A) plunge 17% from highs. It might be due to perception that their highways and energy projects will be affected by changes in some policies.
Is it wise trying to pick a bottom? Well it remains to be seen as the elections will not be over until first week of July.
Impact to Portfolio
We experienced a drawdown (drop from the peak value) close to 3.7% which is still not our maximum in the 3 year period. As mentioned in my previous post we used 6% of our cash position to cushion the impact of these political factors but we have limits on the position size as part of risk management.
We will be willing to wait for the recovery of these stocks given the good valuations and dividends.
Happy Investing!... Show More
