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This material is marketing communication
Before making any final investment decisions, please read the prospectus, its Annual Report, and the KID of the relevant Sub-Fund here
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Print
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First of all, we would like to wish all our unitholders a very Happy New Year.
The development of Coeli Global Select's NAV in December was -5.85%, beating our benchmark index by 1,64 percentage points. The negative return during 2022 were primarily owing to multiples contraction (lower P/Es) and earnings revisions in the companies we own in the global fund. It is worth noting that the second worst performer saw increased revenues and profits during the year, but the lower P/E multiples on account of rising interest rates have had a greater impact on share prices. Movements in the US 10-year interest rate have been enormous, moving from 1.51% to 3.87% – equivalent to an increase of 156%! Overall, we believe the Fed is nearing the peak of its increases, which will have a positive effect on the global fund during 2023.
The strongest performers of the month were Danske Bank, WDP, and Estée Lauder. The weakest during the month were Beijer Ref, Autonation, and Apple.
Although Adobe didn't reach the top three, it deserves a mention in this month's newsletter after it reported revenue growth of 12% y/y. This prompted a pleasing share price increase in connection with the report. Estée Lauder was among the top three as the market now expects more Chinese travelers following the easing of coronavirus restrictions in China. Beijer Ref was among our worst performers following the company's announcement of its acquisition of US-based Heritage Distribution. The share price saw quite a strong negative reaction, as the market was not happy to read in the press release about the acquisition being financed with a sizable upcoming rights issue. Going into the Q4 reporting season, we have high expectations for our companies' reports and anticipate decent share price movements as a result.
Key market events and trends (what has influenced performance most?)
During December, the Fed raised its Fed Funds rate by 0.5%. Over the year, the Fed has increased rates seven times, from 0.25% at the start of 2022 to 4.5% by year-end. Four of these have been three-quarters raises of 0.75% each. The Fed has been resolute in its efforts to combat rising inflation by raising the short-term interest rate. Unemployment statistics from the US now show that interest rate hikes are beginning to take effect in the labor market. US private homes housing data is also dropping and the number of newly produced houses is shrinking. Sweden is showing the same signals, with housing construction having decreased quite sharply over the fall due to rising interest rates.
Comparing the inflation cycles in Sweden and the US, we see the latter ahead of Sweden in these decreases. This means the US will be done raising short-term interest rates before Sweden. It also means the US will lower its policy rate before Sweden starts its reductions.
China, the world's second-largest economy, has now begun easing its coronavirus travel restrictions. We will see more Chinese travelers again, both within China and elsewhere in the world. This will be both good and bad. It is positive that China ends its lockdowns, thus boosting business. However, the number of coronavirus cases will increase as the infection spreads more easily when people travel.
Changes in the portfolio
During the month, we made no changes to Coeli Global Select.
The fund's positioning - our market expectations
Our fund has a good mixture of Champions, with stable earnings growth, Special Situations, with large expected share price movements. Our growth stocks will benefit from long-term interest rates stabilizing and not rising further. Meanwhile, our Special Situations will be aided by eventual improvements in the economy. We believe 2023 will be a thrilling year that will hopefully bring robust returns for unitholders.
News
We have started a new global small cap fund, called Coeli Global Small Cap Select. All you need to do is sign up for our newsletter, where we will provide a link to access a list of the Small Cap Select's holdings.
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Coeli Global Select
| Performance in Share Class Currency | Mth | YTD | 3 yrs | Since incep |
| Coeli Global Select - R EUR | -5.85% | -22.66% | 15.61% | 100.52% |
| Benchmark | -7.49% | -13.22% | 17.94% | 90.28% |
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Andreas Brock, CFA
Portfolio Manager Coeli Global Select
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Henrik Milton
Portfolio Manager Coeli Global Select
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Fund Overview
| Inception Date | 2014-11-28 |
| Management Fee | 1.4 % |
| Performance Fee | Yes, 10% |
| Risk category | 6 of 7 |
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Top Holdings (%)
| HCA HEALTHCARE INC | 4,3% |
| S&P GLOBAL SHS | 4,3% |
| L OREAL | 4,1% |
| ADOBE INC | 4,0% |
| MICROSOFT CORP. | 4,0% |
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DISCLAIMER. This is a marketing communication.
Before making any final investment decisions, please refer to the prospectus of Coeli SICAV I, its Annual Report, and the KID of the relevant Sub-Fund. Relevant information documents are available in English at coeli.com. A summary of investor rights will be available at
https://coeli.com/regulatory-information-coeli-asset-management-ab/.
Past performance is not a guarantee of future returns. The price of the investment may go up or down and an investor may not get back the amount originally invested.
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