Portfolio manager comments — Q2 2025
Fund performance was positive during the second quarter, rising by just over 9% in SEK.
The quarter began on a weak note following Trump’s so-called “Liberation Day” on April 2, when a series of new tariffs were announced. This created concern about global trade and increased the risk of an economic slowdown. However, by mid-year, much of this had been reversed, and the fund performed well.
For the first time in many years, the fund is slightly behind its benchmark index year-to-date after fees. This is primarily due to an underweight in four large defensive stocks—Orkla, Telenor, Gjensidige and DNB—which together returned around 30% during the period, compared to approximately 10% for the rest of the index. The strong performance of these companies can be attributed to their relatively stable business models in a market marked by high volatility, geopolitical uncertainty, tariff threats, and sharp downward revisions in earnings expectations for cyclical sectors.
It is a common strategy in the fund to reduce defensive holdings to free up capital for other investments, as these equities typically have low or negative correlation with the rest of the portfolio. This usually contributes to outperformance, but what is unusual this year is that these defensive stocks have performed very strongly—and simultaneously—at a much higher rate than the market overall.
Aside from these four equities, the fund has performed strongly, both in absolute and relative terms. All other sectors posted positive returns, and several holdings made significant contributions. Notable among them were Norwegian, Crayon/SoftwareOne and Link Mobility. The fund also participated in the IPO of Sentia, which has since risen by over 25%, contributing positively to results.
The fund’s overall positioning remained largely unchanged during the period, although some profit-taking occurred in strong performers toward the end. With liquid positions, we have maintained the fund’s beta and thus the flexibility to quickly adjust exposure as market conditions change. The fund’s strategy remains intact.