Sustained geopolitical events continued to influence markets in June. Tensions over Iran's nuclear program, culminating in a 12-day "blitzkrieg", caused volatility in oil prices and financial markets. Once this event had been digested, the indices resumed their upward march. Still close to its recent highs, the EURO STOXX 50 NR ended slightly down (-1.1%). Rising interest rates are affecting bond markets, but the sharp drop in spreads is enabling credit indices to advance: +0.3% for investment grade, +0.4% for high yield.

DNCA Invest Eurose continued its good momentum over the month (0.14%) to reach 5.98% since the beginning of the year.

Equities made a positive contribution over the month, thanks in particular to the technology sector (BE Semiconducteurs Industries and STMicroelectronics) and TotalEnergies. Over the course of the month, the fund continued to strengthen international stocks Commerzbank, CTP, Intesa Sanpaolo and wienerberger, as well as Covestro among those under offer. Conversely, the fund has reduced its weight on French stocks BNP Paribas, Bouygues, Orange, Saint-Gobain and Société Générale, while Crédit Agricole has been removed from the selection. Following these adjustments and increased hedging (3.4%), the fund's net exposure to equities (excluding the carry) stood at 21.4% at the end of June.

Within the bond portfolio, the cash position has been bolstered by significant falls. A portion is invested in the primary market - which is over-abundant and sometimes offers no premium. New issuers include Spanish water treatment specialist FCC Aqualia, Polish bank mbank, Hyundai Capital America, the Korean carmaker's American financing subsidiary, Spanish waste treatment specialist Urbaser, and a convertible of French company Legrand. Other issuers have been reinforced, including Paprec, Clariane, Seb and Webuild. The automotive sector is benefiting from a wide-open market, and still offers a premium to be captured; we are investing in issues by ZF, Volkswagen Bank, Stellantis and CA Auto Bank. Caixabank, Cajamar and Greek bank Eurobank complete the picture. Following the publication of a coordinated investigation into certain practices at Worldline, we decided to reduce our positions, already limited to 0.2%, on the company's long bonds. The real estate sector, which is poorly represented in the portfolio, is strengthened with the entry of the French retail property company Carmila and LEG in the German residential sector. Finally, profits were taken on the ERG 2030 and Euronext (convertible) 2032 lines, which were sold.

The portfolio's net sensitivity was once again increased, by 20bp to reach 3.34 at the end of the month.

The portfolio's extra-financial characteristics show a responsibility performance of 4.86 and a sustainable transition exposure of 83.66%.

In the face of even more highly-valued markets, the strategy remains unchanged: we are continuing to reduce the portfolio's risk through a number of moves: lower net exposure to equities (-1pt), less exposure to high-yield bonds (including the opening of a short position on the index), an increase in bond duration, and an increase in government bonds and cash. The fund is ready to increase its riskier exposures in the event of a return to volatility, in markets which currently seem to us to have too little regard for the valuation of risks.