Newsletter Equity Funds 30/9 2023
Market development
- The month was bloated with monetary policy developments. As expected, the Riksbank hiked by 25 basis points to 4.0%. The ECB somewhat surprisingly raised by 25 basis points to 4.5%, but at the same time, members seem to expect the peak to be reached now… Again… The Fed used the opposite tactic, leaving the policy rate unchanged but making more hawkish comments. High for a long time is the new mantra generally for central banks. However, Japan is going its own way, leaving the interest rate unchanged at -0.1%, despite inflation excluding food and energy of 4.3%.
- The latest round of inflation figures once again showed that price increases are stubborn but that the pace is pointing downwards. In Sweden, the figure for core inflation in August stood at 7.2%.
- The yield on US 10-year Treasuries rose to a new high since before the financial crisis.
- Oil prices continued to rise sharply in September after OPEC’s output cut, acting as a rock in the shoe for central banks and the economic development. Brent hit the highest level since November 2022.
Simplicity Norden
Development
The fund withstood the stock market fall well, with a clearly smaller decline than for the Nordic market. The rising interest rates and the central banks’ announcement that interest rates may remain high for longer than previously thought caused several of the fund’s bank shares to rise. Handelsbanken rose by as much as 7% and Swedbank had an increase of 4%.
Larger portfolio changes
The main change in the portfolio was that the weight of the banking sector increased further, partly due to better performance.
Returns as of 2023.09.30
- -1.0%
- -2.4%
- 15.6%
- 2.8%
Monthly report
Simplicity Sverige
Development
The fund fell, but at the same time withstood the decline well during a weak month for Swedish equities. Just as in the past two months, the fund’s banks were among the top holdings, as Handelsbanken, SEB and Swedbank rose on a falling stock market. Volvo and Industrivärden also cushioned the fall with gains.
Larger portfolio changes
The portfolio was stable during the month, but the weight decreased slightly in industrial companies from a high level, mainly in ABB.
Returns as of 2023.09.30
- -0.4%
- -3.9%
- 13.7%
- 3.0%
Monthly report
Simplicity Småbolag Sverige
Development
The fund withstood the fall better than the market. The fund management has been highly selective among real estate companies and has underweighted the sector, which again declined amid rising interest rates. Skanska was the fund’s best holding during the month with an increase of 12%. The construction company received several orders in the US, where investments in infrastructure are high. Munters also continued upwards. According to the CEO of the climate control company, they are growing fast in data center solutions, especially in the United States.
Larger portfolio changes
The fund’s portfolio was relatively stable during the month. Positions were reduced in Scandic Hotels and Addtech to make room for increased weight in Axfood.
Returns as of 2023.09.30
- -2.5%
- -10.2%
- -0.2%
- -8.8%
Monthly report
Simplicity Småbolag Global
Development
The fund fell but at the same time beat its benchmark index. Belden, the fund’s largest holding, rose after buy recommendations from both UBS and Goldman Sachs. The holding Sprouts Farmers Market also rose. The company’s stable operation as a niche grocery store chain is appreciated more and more by the market, especially as the general economic conditions are deteriorating.
Larger portfolio changes
The portfolio was stable during the month. In the portfolio, the weight increased slightly in cyclical consumer companies such as Sprouts Farmers Market and Frontdoor Inc.
Returns as of 2023.09.30
- -4.3%
- 3.3%
- 13.7%
- 7.6%
Monthly report
Simplicity Fastigheter
Development
Real estate shares declined amid rising interest rates. At the same time, the fund’s construction-related holdings dampened the fall, partly through gains for JM and Peab. The development was also positive for SBB as the company continued to increase its liquidity, mainly through a deal where part of EduCo is sold and SBB’s internal lending to EduCo decreases.
Larger portfolio changes
The portfolio was stable during the month, with the biggest change being that the weight in Platzer decreased by half a percent to 3.8%.
Returns as of 2023.09.30
- -6.3%
- 1.5%
- -1.7%
- -15.7%
Monthly report
Simplicity Green Impact
Development
The fund declined with the global stock markets and especially renewable energy companies were valued down with the deteriorating stock market sentiment. However, there were several bright spots among the holdings. Jabil, a U.S. contract manufacturer of technical equipment, rallied after releasing a quarterly report well above expectations. Encore Wire, a manufacturer of copper cable, also performed strongly with wind at its back from lower copper prices.
Larger portfolio changes
During the month, the weight in renewable energy companies decreased, partly due to the exit of Eneti and Shoals Technologies. Microsoft was weighted up and is now the fund’s largest holding.
Returns as of 2023.09.30
- -7.5%
- 8.2%
- 5.3%
- 8.4%
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.