The Lancelot Stabil fund declined by 1.8 percent in March, underperforming its benchmark index which rose 0.2 percent. Since the turn of the year, the fund has shed 1.0 percent, trailing the index's 0.5 percent gain. This is according to a monthly report from fund manager Martin Axell.

The manager initially notes that March was characterized by geopolitical unrest in the Middle East and high volatility across financial markets.

A sharp rise in oil prices, linked to the conflict in Iran, prompted investors to sell off both equities and bonds. The Stockholm Stock Exchange fell 7.6 percent during the month, while global equities retreated 1.4 percent in Swedish krona terms. The Swedish krona simultaneously weakened against the dollar, which cushioned the decline in global assets for Swedish investors.

The fund's equity portfolio returned -3.7 percent, with Japanese and Norwegian stocks performing best, while Swedish and Swiss holdings weighed on results.

Among individual holdings, KDDI Corp, Amazon, and Gjensidige Forsikring were the top contributors, while Atlas Copco, Assa Abloy, and Volvo showed the weakest performance.

"Rising oil prices heightened investor inflation expectations, causing both short-term and long-term market rates to rise during the month. Consequently, the yield in Lancelot Stabil's fixed-income portfolio increased to 5.3 percent from 4.8 percent the previous month. However, the fixed-income portfolio returned -0.9 percent during the month, though it remains up 0.8 percent year-to-date," Axell writes.

Several portfolio adjustments were implemented during the month. Exposure to Swedish industrials such as Atlas Copco, Assa Abloy, and Autoliv was increased following price pullbacks, and the position in Astra Zeneca was expanded. The fund also initiated a new position in Norwegian insurer Gjensidige Forsikring, funded by the sale of Billerud.

At month-end, 72 percent of the fund's assets were allocated to high-credit-quality fixed-income instruments, while 28 percent consisted of equities. The strategy aims to combine low risk with long-term return potential amid continued market uncertainty.

"Overall, the fund is well-positioned to continue generating attractive risk-adjusted returns, with the equity portfolio's 2026 P/E ratio at 17.8 and expected earnings growth of 12.1 percent, while the bond portfolio offers a running yield of 5.2 percent," Axell concludes.

The fund's largest issuers were Nordea (5.5 percent), followed by Neptunia and Swedish government bonds with weightings of 4.9 and 4.2 percent, respectively. The largest equity holdings were Astra Zeneca (1.3 percent), followed by Assa Abloy, Atlas Copco, and Autoliv, each weighted at 1.2 percent.

Lancelot Stabil, %March, 2026
Fund MTD, percentage change-1.8
Index MTD, percentage change0.2
Fund YTD, percentage change-1.0
Index YTD, percentage change0.5