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Investor: one of the major contributors to the fund’s positive performance

Risk assets were strong in June. On the equities side, both IT and energy companies did well, with the latter benefitting from rising oil prices. Long-term interest rates fell slightly and credit spreads narrowed further to pre-financial crisis levels. Consequently, the fund also rose.

Investment companies are not normally fund managers’ favourite shares. The explanation probably lies in the fact that investment companies and funds often have the same purpose, to create a good return through equity investments. Fund managers are worried about making themselves redundant by buying investment companies, which then instead make the stock selections.

This fund, on the other hand, has chosen to look at investment companies with a different set of eyes, not least because they have long been traded at large discounts due to fears that their power ambitions could take precedence over the effort to create the best return. As these companies have realised large surplus values and revealed major portfolio values, the discounts have fallen for several years and several today trade at premiums.

Investor has long been one of the fund’s core holdings, and its discount has fallen from the 30 percent level to today’s 10 percent over a few years. As a result, the holding has been one of the major contributors to the fund’s positive performance. Note also that one point of owning a company with a discount to net assets is that the dividend is not discounted. In June, the fund decreased slightly in Investor due to the lower discount. However, the combination of a good underlying portfolio and a continued discount means that Investor will probably remain one of the fund’s most important holdings in the future.

The fund increased its holding in Holmen. Forest products shares have generally seen worse performance in recent months after a strong start to the year. This seems to be steered by the price of pulp, but other commodity-related shares have also had a tough time. The market’s short-term focus on the pulp price is contributing to increased and unnecessary volatility in the share, given that the majority of Holmen’s value consists of relatively stable forest and power assets. But this also means opportunities to adjust the size of the holding in order to create extra returns. We can also reflect on the potential value of Holmen’s investments in wind power on its own land, given the great interest in wind power company OX2 when it was listed the other week.

The fund has also invested in two special purpose acquisition vehicles (SPACs). In simple terms, a SPAC is listed on a stock exchange with a cash war chest to seek out interesting acquisitions in selected industries, giving the acquired company a “shortcut” to the market. These investments make up a small proportion of the fund and should primarily be seen as an opportunity to gain cost-effective exposure to slightly smaller companies. APAC will primarily try to find interesting investments in the technology, consumer or industrial sectors. TBD30 focuses on business services in data and/or finance.

 

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Strategifond A

Carnegie Strategifond is also available in the following share class: G (pays dividends each quarter). Carnegie Strategifond is a total return fund investing in Nordic securities with attractive yield, both...

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