Newsletter Equity Funds 31/8 2023
Market development
- Concerns about China’s economy intensified with a weak import figure and deepening property crisis. As a measure, the country’s central bank lowered the key interest rate on short- and medium-term loans during the month.
- At the same time, China’s problems have a positive aspect as deflation in the “world’s factory” can ease inflation abroad.
- US long-term interest rates reached new heights as Fed members expressed themselves in terms of there being some way to go.
- At the same time, the central banking conference in Jackson Hole offered quotes for both hawks and doves, with a cautiously positive stock market reaction as a result.
- A super-strong report from Nvidia (holding in Simplicity Green Impact) testified that the demand for AI-related hardware has already increased dramatically.
Simplicity Norden
Development
The fund sidestept during another month with scattered developments among Nordic stocks. Novo Nordisk soared after positive study results for the obesity drug Wegovy that showed positive effects also on heart failure. The fund’s bank holdings continued to perform well, just like last month. This time it was Ringkjöbing Landbobank and Sydbank that reported stronger figures than expected.
Larger portfolio changes
The portfolio was relatively stable during the month. Divestments of Genmab and TietoEvry gave way to increased weight in Kone and Novo Nordisk.
Returns as of 2023.08.31
- 0.0%
- 0.1%
- 6.0%
- 3.9%
Monthly report
Simplicity Sverige
Development
The fund fell, but at the same time held up well during a weak month for Swedish equities. Just like last month, the fund’s banks were among the top holdings, as both Nordea and Swedbank rose slightly. Consumer companies AAK and Axfood also cushioned the fall in line with their stable character.
Larger portfolio changes
Several larger holdings got the foot during the month, including the material companies Hexpol and SSAB. Hexagon and Loomis were also divested. Increases were mainly made in industrial companies such as ABB, Epiroc and Assa Abloy.
Returns as of 2023.08.31
- -2.7%
- -2.2%
- 5.4%
- 3.4%
Monthly report
Simplicity Småbolag Sverige
Development
The fund declined with the market during a weak month for Swedish small caps. Among the sectors, there were few exceptions to the decline, but the fund’s staples companies rose slightly, driven by AAK, Axfood and Scandi Standard. The holdings Hemnet and Munters, both among the stock exchange’s better shares this year, continued to perform well after an increased target price for Hemnet and indications of continued high demand for Munters.
Larger portfolio changes
Technology companies and materials companies decreased in the portfolio and industrial and consumer companies increased. Reductions were made in Hexpol, SSAB and NCAB Group, while positions in Husqvarna, SKF and Axfood increased.
Returns as of 2023.08.31
- -4.7%
- -9.1%
- -9.8%
- -6.5%
Monthly report
Simplicity Småbolag Global
Development
The fund rose 1.8 % despite a market with low positive returns. E.L.F. Beauty released yet another report that far exceeded expectations. The skincare and cosmetics company is gaining market share on a regular basis. Over the past 18 quarters, the company has had an average annual growth of over 20%. The fund’s US installation companies, such as Comfort Systems USA, Emcor and MYR Group, rose with stable demand in the back despite the slowing economy.
Larger portfolio changes
In the portfolio, producers of technical equipment decreased slightly, mainly due to the exit of CTS Corp. Boise Cascade, a producer of wooden building materials, was bought during the month. The fund now has 11 holdings linked to materials or the construction industry.
Returns as of 2023.08.31
- 1.8%
- 8.6%
- 10.6%
- 12.5%
Monthly report
Simplicity Fastigheter
Development
Eastnine was the fund’s biggest joy during a generally quite tough month for equities in general. The company, which owns properties in the Baltics and Poland, completed the sale of its holding in a Russian fashion company during the month. The fund’s largest holding, Balder, also rose in August. The market seems to like that the company’s CEO and founder Erik Selin opened up for a future split of the business.
Larger portfolio changes
The portfolio was stable during the month with the biggest change being that the weight in SBB decreased further to about 0.8%.
Returns as of 2023.08.31
- -2.5%
- 12.1%
- -16.5%
- -10.1%
Monthly report
Simplicity Green Impact
Development
The scattered returns among holdings continued in August. Array Technologies, producer of solar trackers, reported earnings and sales well above expectations and rose the most in the fund during the month. The company was an exception among companies linked to renewable energy, which generally had difficulty living up to expectations this year. The fact that the fund has had a relatively limited exposure to this type of company (about 9% of the fund at month-end) shows the advantage of having a broader sustainability portfolio.
Larger portfolio changes
Impax Asset Management and Bakkafrost were among the holdings that had to leave the portfolio during the month, while purchases were mainly made broadly in existing holdings. Nvidia remains the fund’s largest holding.
Returns as of 2023.08.31
- 0.1%
- 6.3%
- 6.8%
- 17.3%
Monthly report
Our Equity Funds
Simplicity
Fastigheter
Simplicity Fastigheter invests in listed companies that own, manage, and build various types of real estate in the Nordic region.
Simplicity
Palma
Our first actively managed mixed fund aims to achieve as high a risk-adjusted return as possible.
Simplicity
Green Impact
A global equity fund investing in companies that contribute to a sustainable development. The fund is classified as dark green (Article 9) under the EU Sustainable Finance Disclosure Regulation (SFDR).
Simplicity
Sverige
After several successful years managing Simplicity Norden we launched Simplicity Sverige, which only invests in stocks listed on the Stockholm Stock Exchange.
Simplicity
Småbolag Sverige
Simplicity Småbolag Sverige focuses on Swedish small-cap stocks. An investment fund for those who believe in the power of Swedish innovation and entrepreneurial spirit, which is anything but “Lagom”.
Simplicity
Norden
Simplicity Norden was launched in 2002 when Simplicity was founded. It has since then outperformed its benchmark index and was awarded with the prize as the best nordic equity fund at the Morningstar Fund Awards 2019.
Simplicity
Småbolag Global
Global diversification and higher expected returns for small- to mid cap equities. Simplicity Småbolag Global is our offering to investors seeking investments in small- to mid cap companies globally.