By way of introduction, the managers note that 2024 was another positive stock market year, with gains of 8.7 percent for the Stockholm Stock Exchange and 16.9 percent for the world index. The US stock market was driven by the tech sector and a strong dollar, while Europe's stock markets were more subdued.
The managers highlight that valuation differences between the US and Europe have opened up opportunities for more acquisitions of European companies. For 2025, good earnings growth and record dividend levels are expected, with small and mid-cap valuations particularly attractive.
Despite the positive outlook, geopolitical tensions remain a significant threat to markets. However, global economic growth is expected to remain stable at around 3% annually over 2025 to 2026, supported by lower inflation, rising real wages and falling interest rates.
The US economy exceeded expectations in the third quarter of 2024, with GDP growth of 3.1%. The services sector showed strength, while the labor market is expected to be slightly weaker in 2025.
Managers point out that Europe's economic growth is low, with continued weakness in manufacturing. Germany's economic indicators are pointing downwards, but stable labor markets and interest rate cuts are expected to contribute to a gradual improvement.
The Fund notes that the Swedish economy is showing weakness but with positive signs, with manufacturing indicating growth and household consumption expected to be boosted by expansionary fiscal policy and falling interest rates.
The interest rate market is characterized by adjusted expectations of cuts. The Fed, ECB and Riksbank cut interest rates in December. The Fed is signaling a more neutral stance, while the ECB and Riksbank may continue with further cuts through 2025.
The managers point out that Pandora, Paradox and Kitron contributed most positively to the fund's performance during the month. Meanwhile, Proact, Dustin and Husqvarna were the weakest performers.
The fund increased its holdings in Alleima, Revolution Race, Scandic Hotels, Storytel and Svedbergs during the month, while positions in Bravida, Byggmax, Inwido, New Wave, Pandora, Securitas and Thule were reduced.
At the end of the month, the fund's equity exposure amounted to 99 percent.
The Fund's largest holdings at the end of the month were Itab, Valmet and Revolution Race with portfolio weights of 4.9, 4.4 and 4.3 percent respectively.
Kavaljer Quality Focus, % | December, 2024 |
Fund MM, % change | 0,32 |
Full year fund, % change | 10,09 |