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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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10.95% a year (after fees) since the start of 2014—that's what the fund and its collection of the world's finest companies have yielded so far on average. Alongside you, our unitholders, we have seen many events over these years—interest rate hikes, Covid-19, the invasion of Ukraine, and various other woes—but by focusing on investments in quality companies with compelling tailwinds, we have ridden these storms. Focusing on this last month of June, we can see the fund was up by 2.79%, falling 0.30 pp short of our benchmark index, while it is up 20.60% since the start of the year, beating the benchmark by 8.83 pp.
The stocks that performed the most positively during June were Autonation, Adobe, and Martin Marietta. Beyond extremely talented management teams, they are also all bolstered by the US economy still ticking away despite the interest rate hikes. At the other end of the scale, Sweden's Beijer Ref and Fortnox fell back somewhat in June, having both been solid performers until that point in the year. Beijer Ref was hit by negative sentiment after EQT divested shares, and Fortnox appears to have been impacted by general uncertainty concerning the Swedish economy. We maintain our positive view on both these companies in the long term, though.
Key market events and trends (what has influenced performance most?)
During June, the Fed paused its rate hikes for the first time in more than a year. At the time of writing, the US Fed Funds rate sits at 5.25%. In general, the Fed's rate strategy is working, and inflation has fallen back to around 4% annually. The higher Fed Funds rate hasn't discouraged the equity market, and so far, we've seen a good year on the stock markets, with large gains overall. In Sweden, the Riksbank continues to hike, however, pushing interest rates to 3.75% at its latest meeting. We are still some way from the levels in the US, but those with variable mortgages are starting to feel the bite. Both the US and Sweden use policy rates as a tool to render borrowed money more expensive and thus reduce demand in the economy. And it works: the monthly cost of a variable rate mortgage has in fact become a few hundred percent higher compared with a year ago. These high interest costs "take away" money that would otherwise be used for consumption, savings, etc. The central banks of both the US and Sweden have a goal they are determined to stick to: getting inflation down to 2%. We believe the US will reach this before Sweden, since the US doesn't suffer from Sweden's issue of a weak currency. Unfortunately, the Swedish krona remains in the doldrums versus the US dollar, the euro, and the British pound, feeding into imported inflation and creating a headache for the Riksbank.
We are looking at a partly divided world economy. The US, the world's largest economy, continues to do well and we see signs that house building might pick up again there, despite the high level of interest rates. The country and its well-run companies are something special when it comes to creating economic value.
In Europe, we can see that interest rate hikes are beginning to bite for sensitive industries like construction, and we expect this to be reflected in the interim reports that will start coming from next week. China is complex—consumer spending is showing signs of picking up again, but the real estate sector seems weighed down by the long period of over-investment. That China hasn't really taken off again is one of the reasons for the subdued oil price.
Portfolio changes
During the month, we bought Watsco, the US's leading distributor of air conditioning, heating, and refrigeration equipment, and related parts and accessories. We have owned this well-run and profitable company before, and we must now confess, we never should have sold it. Hindsight is a glorious thing, but we are now back as owners of a company that has built up an outstanding distribution business with solid growth in a segment with a long-term underlying sustainability trend that favors Watsco.
The fund's positioning—our market expectations
It is now high summer in Sweden, but it is also reporting season and thus one of the most fun times of the year for fund managers. Feel free to follow our blog and LinkedIn page, where we will be sharing some of the highlights from the reports.
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Coeli Global Select
| Performance in Share Class Currency | Mth | YTD | 3 yrs | Since incep |
| Coeli Global Select - R EUR | 2.79% | 20.60% | 41.14% | 141.82% |
| Benchmark | 3.09% | 11.77% | 40.79% | 112.69% |
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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 (%)
| MARTIN MARIETTA MATERIALS | 4,5% |
| S&P GLOBAL INC | 4,4% |
| MASTERCARD INC | 4,3% |
| ADOBE INC | 4,1% |
| AUTONATION INC | 4,1% |
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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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