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Return to Fund page
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February was a good month for the equities market up until 19 February. When it became clear that the corona virus had started to spread in Europe the market began to retreat. The drop in the index was equivalent to the levels seen in autumn 2008. During February, the fund’s value declined by 8,4 percent, which was 1.05 percentage points worse than the benchmark.
The biggest profit contributors during February were a mixed bag of companies: Nvidia, Vestas Wind Systems, Adobe, Sterling Construction, and Nordea. Good quarterly reports boosted both Nvidia and Vestas on their respective reporting days. The holdings with the worst return this month were HCA Healthcare, adidas, Martin Marietta, AAK, and Apple. What made Apple weak was its exposure to China; the same goes for adidas, which sells much apparel in China. Overall, it is the general sell-off that has reduced the value of our holdings, due to the market uncertainty generated by the corona virus.
Moreover, at the start of February we were in San Francisco and had many interesting meetings with tech companies such as Microsoft, Adobe, Intel, Teamviewer, Twitter, Visa, and Mercadolibre. You can read our latest blog post covering
Adobe here (in Swedish).
Key market events and trends affecting performance
When we wrote about the corona virus last month the market did not believe that Europe and the US would be affected to any great extent. But as of now, they have been and it will lead to after-shocks for the global economy. China has closed factories and shopping centres and this will hurt the country’s growth, even if some has started to open again. Listed companies’ turnover and profits will shrink temporarily as a result. The companies producing and selling physical products are most likely to be hit the hardest. As an example, our holding in Apple has been affected by the virus, while our German real estate holding Vonovia probably won’t be impacted at all.
To stimulate economies and ease the impact, several central banks have lowered interest rates; both the US Fed and the Bank of Canada have reduced key rates by 0.5 percent. Low interest rates lubricate economies and stock markets. Low rates also make it cheaper to borrow, which favours our US construction holding Martin Marietta, for example. Moreover, low rates also allow the equity markets to continue climbing when discount rates for valuations have come down. On the other hand, the market uncertainty of course persists.
Portfolio changes
Before the drop in the markets in mid-February, we trimmed our weightings in several global tech companies and bought HCA Healthcare, an American medical facilities company. We believed that certain tech valuations were challenging, making the defensive HCA, trading at 11.5x profit, a good addition to our portfolio. We also bought Nordea ahead of the report and made a quick profit after the share price rose more than 5 percent on the reporting day. We have sold off Vestas from our special situations part of the fund, also giving us a good return.
The fund’s positioning
Despite the unsettled stock markets, we have never had as good a portfolio as we hold today. Despite the corona virus impact, we have a long-term positive outlook on the market. We will continue to take advantage of good investment opportunities as they arise to keep on creating solid returns for our fund holders.
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Coeli Global Select I-EUR
| Performance in Share Class Currency | 1 Mth | YTD | 3 yrs* | Since incep* |
| Coeli Global Select - I EUR | -8.44% | -6.76% | 23.01% | 67.12% |
| Benchmark | -7.39% | -7.21% | 18.00% | 49.71% |
* the historic performance before 2018-06-30 is an estimated performance based on the R EUR share class adjusted for
the different Investment Management fee. It shall be noted that the adjusted historical performance can differ from the real
outcome and therefore shall only be seen as an indicator.
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Andreas Brock, CFA
Portfolio Manager Coeli Global Select
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Henrik Milton
Portfolio Manager Coeli Global Select
[/et_pb_text][et_pb_text admin_label="Fund Overview" _builder_version="3.0.89" background_layout="light" custom_margin="||20px|" module_class="gen-trustee-single-table"]
Fund Overview
| Inception Date | 2014-11-28 |
| Management Fee | 1.4 % |
| Performance Fee | Yes, 10% |
| Risk category | 5 of 7 |
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Top Holdings (%)
| GLOBAL PAYMENTS INC | 4.4% |
| MICROSOFT CORP. | 4.4% |
| SIKA LTD | 4.3% |
| THERMO FISHER SCIENTIFIC INC | 4.2% |
| ADIDAS AG | 4.1% |
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DISCLAIMER. The information provided here does not constitute professional financial advice. 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. The key investor information document (KIID) and prospectus are available at
www.coeli.se.
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