The month was characterized by a significant spike in geopolitical uncertainty, as escalation in the Middle East triggered an initial wave of risk aversion across markets. Cyclical and economically sensitive sectors underperformed, while defense and energy-related stocks showed strength.
Historically, this type of market reaction tends to stabilize after the initial shock; however, the forward outlook remains contingent on the duration of the conflict.
Against this backdrop, the fund implemented portfolio adjustments, leveraging the broad-based downturn to selectively increase exposure to high-quality cyclical companies that have seen sharp recent declines. Positions were bolstered in Atlas Copco, Boliden, Epiroc, and Hexagon, as the managers believe their fundamentals remain intact despite downward valuation adjustments.
During the month, small-cap stocks exhibited relative strength compared to large caps, providing a positive contribution to the fund's performance. This aligns with the view that small caps, following a prolonged period of underperformance, possess significant recovery potential as risk appetite returns.
The primary contributors for the month included Alcadon, Dynavox, and Sdiptech, while Atlas Copco, Epiroc, and Valmet weighed on performance.
Within the fund's sustainability themes, Climate and Environment performed most strongly during the month, with an average portfolio weight of 3 percent. Weaker performance was noted within the Innovative and Sustainable Solutions theme, which represents approximately 33 percent of the fund's holdings.
At month-end, the fund's largest holdings were Atlas Copco at 9.55 percent, followed by Vestum and Valmet with weightings of 7.52 and 5.09 percent, respectively.
In terms of sector exposure, Industrials accounted for 50.4 percent of the allocation, followed by Healthcare and Materials at 15.1 and 10.0 percent, respectively.
Geographically, Sweden represented 84.8 percent of the allocation, followed by Finland and Norway at 7.4 and 5.1 percent.
| Norron Sustainable Equity, % | March, 2026 |
| Fund MoM, change in percent | -6.86 |
| Fund YTD, change in percent | -4.44 |
