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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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The performance of Coeli Global Select was 2.05% during July, falling 0.77 percentage points short of our benchmark index. This year so far, Coeli Global Select is up by more than 23%, demonstrating the strength of our companies. As we have written previously, companies like the ones we own reward investors when the market switches its focus from macro and instead looks at what companies actually deliver.
The strongest performers during July were Adobe, MSCI, and Alphabet. Those with the weakest performance during the month were HCA Healthcare and Martin Marietta. The reporting season basically brought no surprises, as nearly all our companies reported just as we had anticipated. Worth highlighting, however, is that companies like MSCI and Alphabet, which the market was somewhat skeptical about, saw their share prices rise when their reports were released. Companies that have been in favor with the market, such as Martin Marietta, saw falling share prices when their reports "only" surpassed market expectations to a certain extent. Overall, this has been a generally quiet reporting season.
Key market events and trends (what has influenced performance most?)
Despite inflation in the US dropping to below 3%, the Federal Reserve chose to increase interest rates in July by a "quarter" (0.25 percentage points) to 5.5%. Fed chair Jerome Powell remains determined to push inflation down to the target of 2%. The key policy rate of 5.5% is at its highest since 2001, when it peaked at 6.5%.
In Sweden, inflation refuses to budge and remains high, sitting at more than 9% on the latest reading. Among the factors keeping it elevated is that we import inflation through the weak krona. Goods and services in dollars and euros, for example, become more expensive when the currency is weak. And we can also see temporary price spikes, such as when global star Beyoncé made an appearance in Stockholm and traveling fans temporarily drove up hotel prices in the city. Hotel prices and restaurant bills are among the 12 components used when calculating inflation each month. Over time, we will also reduce inflation in Sweden, but this will take longer than in the US, for example.
For the time being, Swedish construction and real estate companies will suffer from the high interest rates, with large declines in the share prices of those listed. The classic proverb "Every cloud has a silver lining" can come to pass though, as we believe stock prices will rise when interest rates come down. Among our Special Situations, we have taken advantage of the downturns, such as investing in Swedish real estate company Balder, which trades well below its book value.
One country that has now started reducing interest rates is Brazil. At the beginning of August, its central bank lowered the SELIC rate (repo rate) by 0.5 percentage points. Lower interest rates are likely to have a particularly positive impact on Pagseguro, our fund's Brazilian holding, over the coming 12 months.
Portfolio changes
We made no changes to our portfolio during July.
The fund's positioning—our market expectations
As owners of some of the world's finest companies, we still have a positive outlook for the rest of 2023. Granted, there are some dark clouds relating to macro, but as soon as the market suspects the central banks have concluded raising interest rates and as inflation continues downwards, high-quality companies will be rewarded by the equity markets with the valuations they actually deserve.
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Coeli Global Select
| Performance in Share Class Currency | Mth | YTD | 3 yrs | Since incep |
| Coeli Global Select - R EUR | 2.05% | 23.07% | 39.00% | 146.77% |
| Benchmark | 2.82% | 14.93% | 44.20% | 118.69% |
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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 | 4 of 7 |
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Top Holdings (%)
| MASTERCARD INC | 4,5% |
| UNITEDHEALTH GROUP | 4,4% |
| ADOBE INC | 4,4% |
| MARTIN MARIETTA MATERIALS INC | 4,2% |
| MSCI INC | 4,2% |
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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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