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This material is marketing communication
Before making any final investment decisions, please read the prospectus, its Annual Report, and the KIID of the relevant Sub-Fund here
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Print
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Some months go by fast, the days flying past, and others prove so eventful they feel like an entire quarter. January fell into this second category. The market worried one day about Putin’s judo manoeuvres and the thousands of troops he was amassing on the Ukrainian border and the next about the US Federal Reserve and the coming interest rate hikes. Numerous concerns over a short period. And so markets across the world fell, taking funds down with them.
During the month, our fund was down 7.82 percent, which was 4.32 percentage points worse than our benchmark. Looking at the ten stocks that performed well for us during January—including Renault and Vonovia—we can see that several of them performed poorly last year. On the other hand, among the stocks that did poorly during January were companies of the highest quality, such as Zoetis and SIKA. It is apparent that the stock market turmoil is focused on one theme: sell off everything that did well in 2021 and buy last year’s underperformers. We are also glad that some of our stocks that underperformed during 2021 are now going well. We suggest it is no longer the wisest of ideas to sell your best performers. We have come to the conclusion that quite a large element of panic and short-sightedness prompted the stock market worries during January.
Our suspicion that the market might trough when Microsoft reported on 25 January was proven correct. Often, when stock market giants such as Microsoft, Apple and other Big Techs have reported, they have also bought back their own shares, which has a tendency to support the overall stock market performance. We also saw many solid reports, and if there’s one thing the market always likes, it’s growing profits. We hope that the rest of the year proves calmer on the stock market than January.
Key market events and trends (what has performance most?)
The very big picture doesn’t feature Putin or by how much the Fed will lift interest rates in March, but rather what will happen now that we have left behind us “World Zero”—our term for the zero inflation, zero interest rates, and zero political leadership we in the western world have found ourselves in since 2009. In World Zero, consumers, companies, politicians have been able to borrow money without limit at no cost, buy whichever stocks or companies they want without consequence, and have not needed to think further ahead than the next year. That is now at an end. Inflation (primarily in the US) is here, money will cost again, and both company business models and countries’ politicians will now be put to the test, not only by higher inflation but also by competition. This is a new reality that suits us well since it makes it especially important in the future to select winners. Our fund is full of these.
Portfolio changes
During December, we made a few changes to the fund, selling off TSMC and Intel. We sold the former owing to the geopolitical risk associated with owning a Taiwanese company, and we saw a good price at which to exit the latter in mid-January following our growing doubts about this Special Situations investment. In their place, we invested in a new Special Situations stock in the US, namely Texas-based Sterling Construction (STRL). STRL is growing rapidly both organically and via acquisitions, and we value it at around 9x P/E for 2022, which is at least 30 percent below what it should trade at.
The fund's positioning - our market expectations
In the coming months, we will upgrade our holdings further to create an even more competitive fund that continues to deliver good long-term returns to our unitholders.
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Coeli Global Select
| Performance in Share Class Currency | Mth | YTD | 3 yrs | Since incep |
| Coeli Global Select - R EUR | -7.82% | -7.82% | 71.08% | 139.63% |
| Benchmark | -3.50% | -3.50% | 56.92% | 111.60% |
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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 (%)
| MICROSOFT CORP. | 4.7% |
| MASTERCARD INC. SHS-A- | 4.7% |
| APPLE INC | 4.4% |
| UNITEDHEALTH GROUP INC | 4.3% |
| HCA HEALTHCARE INC | 4.3% |
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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 KIID 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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