We have a portfolio management approach that seeks to find companies that grow in the long-term. These stocks are less sensitive to economic and macroeconomic fluctuations. Of course, they do have some sensitivity. But if you, for example, take diabetes medications, it doesn't really matter whether Harris or Trump is president.

We haven't made any major portfolio changes. A little bit, because you always need fresh blood. When growth at a company slows down, we exit. What we saw after the US elections is that companies with particularly strong US exposure, like Schneider Electric, performed well.

Novo Nordisk did not disappoint in our view. They have delivered more than 24% organic growth every quarter for two years in a row. That's very good. The guidance was confirmed.

The first market reaction was a 7% increase. However, after a comment about 2025 was made during the conference call, it dropped by 6%. In the end, the stock closed higher. The volatility is extremely high at the moment.

We look at the results and listen carefully to how the management is investing long-term. With a stock like Novo Nordisk, which is not cheap and where everyone has high expectations, we, as long-term investors, fundamentally see no reason to say we need to exit now. We have been invested for almost 20 years and are still satisfied with the investment.

With the latest generation of GLP-1 medications, it’s also about how strong the positive side effects on cardiovascular and kidney problems are. These are conditions often associated with diabetes, and we see Novo Nordisk having an advantage over Eli Lilly. More competitors will certainly enter this market, which will lead to price drops – we expect GLP-1 medications to decrease in price by 10 to 15% per year to become a mass-market product. The insulin market did not work any differently. But for the next five years, we see the duopoly of Eli Lilly and Novo Nordisk’s medications as well-secured.

ASML has adjusted its guidance for 2025. Consensus expectations were very high. We were a little surprised that the stock lost 15% after that. It looks to us like TSMC is gaining more and more dominance in the foundry market, leaving Intel and Samsung behind. The question for ASML now is how quickly TSMC will switch to the latest generation of machines, especially the so-called EUV and High-NA machines.

With rapidly growing companies, there is always the risk that investors extrapolate overly ambitious growth rates. For our compounder companies, we expect high single-digit growth in earnings per share (EPS) each year. Compounders like Novo Nordisk have delivered around 16-17% EPS growth over the past 18 years, since we began holding them. Nevertheless, it’s important to stay vigilant and, if valuations become too high, take some money off the table.

That’s true. Also the US is much more domestic-oriented. It's not an export nation. Europe is different in that respect. We have very strong export exposure. If Trump’s mercantilism fully takes hold and tariffs are imposed, that’s more of a Achilles' heel for Europe.

The Republicans hold power in the Senate and the House of Representatives. In simple terms, this means Trump can push through much more now than he could eight years ago, provided his party stands behind him. But we don’t have any exporters in our portfolio, like car manufacturers, who could be hit first by tariffs. What Trump wants is for companies that sell products in the US to also produce them in the US. We’re well-positioned for that, but Europe is somewhat vulnerable in terms of trade flows.

The luxury goods market has grown strongly, driven by the Chinese middle class. That has been the main growth driver. Burberry recently had to accept losses, Hermès continues to grow double digits, and Louis Vuitton is stagnating at the moment. At the beginning of last year, we decided to take profits in individual stocks because they had already risen very strongly between 2019 and 2023. That pace couldn’t continue. But we were somewhat surprised at how quickly everything slowed down. The Chinese market is currently where things are most problematic. However, if you have companies in the luxury sector that cater to the top of the wealth pyramid, like Hermès or Ferrari, you’re relatively safe.

Of course, these stimulus programs are initially a relief. The stock market reacted positively because it was completely oversold. At Comgest, however, we focus on long-term structural trends, not short-term economic programs. It’s too early to say whether this is the turning point.

We try to reflect long-term megatrends with our stocks that provide tailwinds for long-term profit growth. Right now, we are particularly excited about Schneider Electric. It’s a company that has completely repositioned itself over the past 20 years through acquisitions. Schneider Electric is a complete provider for energy management and industrial automation. It supports companies in decarbonizing large industrial plants and infrastructure. It offers everything, including software, hardware, and consulting expertise, that such companies need on their decarbonization journey. It also handles the complex infrastructure of hyperscalers, a very dynamically growing market. Schneider has an operating profitability of 16% and is currently growing organically by 8%.

Over the past three years, those have been Novo Nordisk and, to a lesser extent, ASML. We’ve already talked about the short-term problems. Ultimately, these are companies that have provided significant performance contributions over three, five, or ten years. We remain positive on Novo Nordisk, as diabetes and obesity have become widespread diseases. Another company that has performed well is the database provider Reed Elsevier (listed as RELX Group).

SAP had long-standing problems. Under McDermott's leadership, there were numerous acquisitions. Many promises were made but ultimately not fulfilled. The cloud transition didn’t work. Initially, they wanted to do it with their own infrastructure before deciding to work with the big American players. The current German management has successfully tackled many issues. We’re getting good feedback from the integrators who actually work with the software. The cloud transition will drive growth for the next four or five years.

These large-cap global market leaders have extremely strong regional diversification. Schneider Electric is a good example, as it is benefiting from the construction of hyperscalers in the US, while also maintaining a strong presence in Europe and Asia. We also have a few stocks in the mid-cap portfolio that benefit from diversification, but one must look for them specifically. It obviously helps if companies are present in growth markets. But if a company relies too heavily on the European consumer market, it is simply difficult at the moment. The larger operational leverage, combined with often weak revenue development, leads to bigger profit disappointments for these small- and mid-caps. However, when the environment is strong, they usually grow much faster.

We don’t expect anything. We didn’t have any expectations for the former coalition before either. You could say political markets have short legs. In any case, these are not the factors that should derail a long-term growing quality company.

As I just mentioned, the growth trend with hyperscalers will continue for the next three to four years. But this has nothing to do with Trump, but rather with the fact that we are in the age of artificial intelligence, and software is moving to the cloud. This trend will not be influenced by Trump. We are positioning ourselves in a way that we won't be strongly impacted by trade policies. With Trump’s policies, we’ll have to see what is actually implemented.

In the US, there will certainly be some reshoring of industry. This might also affect some German automakers. However, we are not invested in that sector. Although the brands in Germany are very strong, the automotive industry is a tough business. Some companies will likely take steps to satisfy Trump. What we have in our portfolio is Dassault Systèmes, the world leader in software for building cars and airplanes. The company shows that the regional diversification concept works well for computer-related industries. While US and European automakers are currently under pressure, the Chinese are also building their cars with Dassault's system software, and the business is performing very well. This is also a good example of how to navigate geopolitical turbulence effectively.

Wolfgang Fickus joined Comgest in September 2012 as Product Specialist and Investor Relations Manager. Fickus began his career in 1995 at Paribas Asset Management Paris as a fund manager for European equities. In 2000, he moved to WestLB, where he worked as an analyst for European technology stocks before taking over the leadership of the mid- and small-cap research team in 2005.