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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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October was a strong month for the equity markets, despite new peaks in US 10-year bond rates, which are now above 4%. Coeli Global Select's NAV for October was 4.62%, which was 0.37 percentage points short of our benchmark index.
The strongest performers of the month were HCA Healthcare, Beijer Ref, and Mastercard. The weakest during the month were Siegfried Holding, Amazon, and L'Oréal.
Amazon and Apple issued important reports in October. Amazon's was not appreciated by the market, after the company booked elevated costs in relation to revenues and cut guidance for both Q4 and FY 2022. By contrast, Apple released a stellar report, exceeding market expectations. The company booked record sales for certain products and markets. Beijer Ref was among the winners during October, issuing a solid report that also surpassed market expectations. Revenues were up 37.7%, of which 18.6% was organic growth.
Key market events and trends (what has influenced performance most?)
October saw less focus on macro figures than usual. US unemployment remained at a low level (3.7%) and inflation (8.2%) has not shrunk noticeably. The only positive with the latest inflation figure from the US was that it hadn't increased. We expect the Fed sees an end to the rate increase cycle and there won't be many more interest rate hikes. What interest rate hikes have succeeded with - also in the view of the Fed chair - is to slow down the housing market and house prices.
We are now in the midst of the Q3 reporting season, which has, overall, seen decent figures from industrial companies, while those with direct sales to consumers have reported weaker numbers. The robust US dollar has hurt US companies' revenues from other markets. International sales are worth less to them when the US dollar is so strong. Global growth is also impacted by China reopening its markets after extended Covid-19 lockdowns. For the world to return to "normal volumes" requires China to be unhindered in both buying and selling goods with the outside world.
Portfolio changes
During the month, we made a change within our Special Situations holdings. We bought Danske Bank owing to its low valuation. This has been the result of the bank awaiting the fine from the Department of Justice (DoJ) in the wake of the money-laundering case in the Baltics that was uncovered in 2018. The market has expected this to be in the region of DKK 30bn, but the fine was instead set at DKK 14bn. Before the announcement, Danske Bank was valued at a Price/Book of 0.5x. We believe the bank should trade at a P/B closer to 1.0x, in line with Handelsbanken and Swedbank, which suggests a potential upside of 50-100% since we bought in.
The fund's positioning - our market expectations
Right now, we have a particularly exciting portfolio of many intriguing Special Situations cases (SocGen, Danske Bank, Sterling Infrastructure, Titan Machinery, and more) that look set for good times ahead. Among our Champions (S&P Global, NVIDIA, SIKA, Amazon, and more) are some firecrackers that can offer excellent returns. Remember, the best stock transactions are made in the worst of times.
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 | 4.62% | -18.91% | 30.72% | 110.79% |
| Benchmark | 4.99% | -9.18% | 29.93% | 99.14% |
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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 | 4,8% |
| UNITEDHEALTH GROUP INC | 4,7% |
| MASTERCARD INC - A | 4,6% |
| MARTIN MARIETTA MATERIALS | 4,6% |
| MSCI INC | 4,5% |
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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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