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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 return for Coeli Global Small Cap Select in August was -3.24%, falling 1.26 percentage points short of our benchmark index. Small caps continue to develop well, but they haven't managed to catch the attention of the equity markets, which continue to value larger caps more highly.
The strongest performers of the month were Modine Manufacturing, Sterling Infrastructure, and Qualys. Those that saw the weakest performance were Napco Security Technology, Hexatronic, and Staar Surgical.
The performances of both the best and the worst were driven by quarterly reports. We saw healthy reports from Modine Manufacturing, Sterling Infrastructure, and Qualys, all of which saw decent growth and surpassed market expectations. Napco Security Technology, Hexatronic, and Staar Surgical all failed to live up to expectations and their share prices dropped on reporting day. Napco Security Technology's share price decline stemmed from a report burdened by a revaluation of its inventory, contributing to the share's poor performance.
This month, we shine the spotlight on Sterling Infrastructure, a Texas-based construction company whose share price has shot up more than 140%, making it by far the fund's best contributor. Among other things, Sterling makes cement foundations for all factories now being built, especially in the southern states of the US. We keep in regular contact with management and have visited its Houston headquarters on a number of occasions. It is thrilling for us as investors to be part of Sterling's journey from an unknown Texan construction company to a firm now expanding across the US and making efforts to become better recognized and more sustainable. We are undertaking an analysis trip to Silicon Valley in early September to meet many exciting software and semiconductor companies.
Key market events and trends (what has influenced performance most?)
The light is growing at the end of the tunnel following all the interest rate hikes, and the question now is whether the central banks have finished these and plan instead to start pondering cuts. The US economy remains formidable, however, which suggests interest rate cuts may lie some way off, but we believe the worst of the boom is probably over. In the world's largest economy, many Chinese real estate companies are struggling with financing issues and an inability to sell enough new apartments. What is interesting here is that the western stock markets are almost wholly unaffected by the Chinese real estate and construction firms' difficulties. However, the real estate sector's problems are a global phenomenon. At the time of writing, we are in San Francisco, where we can see many office spaces that would typically be rented out sitting empty.
Portfolio changes
During the month, we made four changes to our small cap fund. We bought Elmos Semiconductor, Eurogroup Lamination, and LiveChat, and we sold Clearfield. All these new holdings are Champions. Germany's Elmos Semiconductor and Italy's Eurogroup Lamination are bolstered by the boom we've seen in electric car manufacturing. Both are sub-suppliers to the largest electric car manufacturers. Poland's LiveChat sells different types of customer-chat software (brief messages to help customers navigate a website, for example). It has also launched its own product, ChatBot, which operates with the help of AI. LiveChat is a super and profitable company, with clients mostly in the US and Europe.
The fund's positioning—our market expectations
We believe we have built an attractive global small cap fund with both excellent entrepreneurially driven Champions stocks and cheap Special Situations. Our holdings in the fund have estimated profit growth exceeding 19% between 2023 and 2024. Aggregated growth in revenues in our companies over the same period is estimated at more than 12%. We see these high numbers as particularly appealing in a world where many countries are fighting to expand their GDP to avoid a recession.
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Coeli Global Select
| Performance in Share Class Currency | Mth | YTD | 3 yrs | Since incep |
| Coeli Global Select - R EUR | 17,50% | -10.20% | 45.98% | 133.44% |
| Benchmark | 9.98% | -4.65% | 39.47% | 109.07% |
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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 | 2022-03-28 |
| Management Fee | 1.4 % |
| Performance Fee | Yes, 10% |
| Risk category | 4 of 7 |
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Top Holdings (%)
| MODINE MFG | 4,3% |
| QUALYS INC | 4,2% |
| MEDPACE HOLDINGS | 4,0% |
| ASBURY AUTOMOTIVE GROUP | 4,0% |
| ARGAN | 3,3% |
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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 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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