Portfolio manager comments — Q2 2025
Fund performance was positive during the second quarter, rising by just over 15% in SEK – approximately 3.5 percentage points better than the benchmark index*.
The quarter began turbulently after the US announced new tariffs against several countries, including the EU and the UK. However, the market gradually recovered as hopes for upcoming trade agreements and signals of interest rate cuts in Europe emerged. We continued to see inflows into the European equity market, partly due to recently announced stimulus packages from the EU and Germany, and partly due to ongoing geopolitical uncertainty. During the period, small caps rebounded and outperformed large caps as a group.
Among the fund’s top contributors were holdings such as Uniphar, Vusion Group, Asmodee, Atalaya Mining, Volex, Heijmans, Persimmon, Diploma and Erste Group Bank. On the negative side, companies such as Innoscripta, Redcare, Boozt, Bakkafrost, and Strix Group weighed on returns.
We invested in new holdings including Rightmove, Thule, Tomra, Camurus, Amplifon, Diasorin, Innoscripta, Robertet, and Genmab. These purchases were primarily financed through the sale of Fortnox, which received a takeover bid at the end of Q1, as well as IP Group, Securitas, Team Internet Group, Valmet, and Fabasoft.
We note that European small caps have started to gain ground against large caps after an unusually long period of relative underperformance. From a historical valuation perspective, we believe European small caps appear more attractive than larger companies.
The EU’s increased focus on reducing regulation and promoting growth and investment is, in our view, a positive development for the region. We also believe that smaller companies are better positioned to implement AI solutions more quickly than larger firms.
The fund’s cautious macroeconomic outlook is supported by the thematic drivers among our holdings, which help drive likely earnings growth for the portfolio even if the economy remains weak.
*Solactive ISS ESG Screened Europe Small Cap Index