The Chelonia Select fund rose by 2.03 percent in December. Over the past full year, the fund gained 16.20 percent, according to a monthly report.
The main positive contributors during the month were long positions in Hoist, Saab, and Securitas.
Net equity market exposure averaged below 40 percent. If the fund's holdings had performed in line with the Swedish stock index SIXRX, the return would have been around 5 percent. According to the manager, the difference is explained by stock selection.
The fund's long positions generated an average unweighted return including dividends of 24 percent during 2025. The corresponding figure for the fund's short positions was 7 percent.
Small-cap stocks, toward which the fund has a bias on the long side, as a group performed significantly weaker than the large-cap index. The difference during the year amounted to about 10 percentage points, depending on which indices are compared.
The fund's largest positions showed mixed results, with Essity, the fund's fourth largest holding, falling by 8 percent.
During the year, the US stock market, as measured by the S&P 500, rose by 16 percent. At the same time, the fund was net short on US equities. Against this backdrop, the fund's outcome was better than expected, according to the manager.
A contributing factor was that the fund was long bank stocks and short real estate stocks. Several small and mid-sized holdings also contributed positively. ISS, Saab, Hanza, Attendo, Alphabet, and a number of bank stocks all delivered returns including dividends of over 50 percent during 2025.
The manager also highlighted the absence of major losses in the fund's largest holdings, both on the long and short side, throughout the year. The relatively low risk against the equity market is also seen as providing some protection in the event of future market downturns.
Looking ahead to 2026, the manager states they are cautiously optimistic, expecting that some larger holdings may achieve higher valuations. At the same time, there are short positions where valuations are considered stretched. No major changes to the fund are planned, with continued focus on keeping market risk low and identifying valuation discrepancies through so-called pair trades.
SAAB AB is a world leader in the design, manufacturing and marketing of defense and security systems and equipment for military, space and civil sectors. Net sales break down by family of products and services as follows:
- electronic defense systems (33.3%): radars, sensors, submarine and terrestrial airborne surveillance systems;
- aeronautical systems (26.1%): military aircraft, combat aircraft, avionics, etc.;
- armament equipment and systems (22.5%): military equipment, missile systems, weapon systems, ammunition, armed forces identification systems, camouflage systems, etc. The group also provides security and defense solutions (combat systems, training, simulation, security and communication solutions, air and sea traffic management systems, etc.);
- naval systems (12.9%): submarines, combat ships, underwater mine detection systems, etc.;
- support services (4.2%): provision of services in the areas of systems development, integration and security, information security, communications, technical information, logistics, etc., and technological consulting in the fields of aviation, defense, telecommunications, etc.;
- other (1%).
Net sales are distributed geographically as follows: Sweden (41%), Europe (24.8%), North America (9.6%), Asia (8.4%), Latin America (7.1%), Australia (5.3%), Africa (0.3%) and other (3.5%).
