A strong April
Following a turbulent first quarter, the global equity markets hit new highs during the month of April.
SKAGEN Global: Strong recovery in global equities as volatility falls; portfolio upside remains attractive at 27%
- Microsoft was the largest contributor, boosted by strong performance across all divisions and continued growth from the US technology giant's cloud segment. Capgemini was the next best performer with the French multinational seeing increased demand for its consulting services from trends in digitalisation.
- 3M was the largest detractor following a slight lowering of revenue guidance by the US conglomerate. Autoliv was the next weakest performer as the Swedish automotive safety supplier marginally undershot market expectations for quarterly organic growth and operating margin.
- Mastercard joined the portfolio as we expect the financial services multinational to benefit from the structural global shift from cash to electronic payments. We took advantage of strong share price performance to exit Hyundai Motor and sold out of Columbia Property Trust as the US REIT's cash flow profile no longer meets our high requirements.
- Despite the strong performance of global equities during the month, the portfolio remains attractively valued with the top 35 positions offering 27% upside*.
SKAGEN Kon-Tiki: Auto producers' strength offsets Russian weakness to drive solid absolute and relative gains
- Hyundai Motor was the strongest performer, boosted by activist investor Elliott taking a stake in the Korean company and demanding improvements to capital allocation and governance. Mahindra & Mahindra was the next largest contributor with the Indian auto manufacturer benefiting from recovering domestic rural demand to deliver solid sales.
- Indonesian Indosat was the largest detractor following weak first quarter results which were impacted by stronger competition for its telecom services. Aeroflot was the next largest drag on performance with the Russian flag-carrier hurt by a depreciation of the rouble following further sanctions and a higher oil price.
- No companies joined the portfolio but we exited from three holdings: Eczacibasi Yatirim as the Turkish investment company reached our share price target; Gree Electric Appliances following the Chinese appliance company suspending its dividend; and Bolloré where the ongoing corruption investigation into the French logistics company's Chairman and key owner has raised ESG concerns.
- The portfolio currently contains 45 holdings, with the largest 35 – where we calculate weighted upside of 36%* – representing 90% of the fund's assets.
SKAGEN Focus: Korean détente and oil price recovery drive strong absolute and relative gains
- Hanil Cement was the top performer with the Korean cement producer boosted by optimism for new construction opportunities following the historic meeting of North and South Korean leaders. US shale gas producer Whiting Petroleum was the next largest contributor, buoyed by a rising oil price.
- Gold Fields was the weakest performer with the South Africa-based gold miner announcing disappointing production figures for its domestic reserve following labour issues and restructuring initiatives. Brazilian meat producer JBS was the next largest drag on performance despite improving fundamental performance across all business lines.
- No new companies joined the fund but we exited from Danish brewing company Carlsberg.
SKAGEN Insight: Strong absolute and relative performance as Ericsson shows signs of recovery
- Ericsson was the top performer, lifted by solid quarterly results that many investors interpreted as the long-awaited turning point for the Swedish telecom giant. Teikoku Sen-I Co. was the next largest contributor with the Japanese fire safety company's recent AGM shining a light on shareholder issues.
- Armstrong Flooring was the largest detractor despite performing in line with our expectations as the US company seeks to turnaround sales and profitability. GEA Group was the next weakest performer with the CEO and CFO now stepping down from the German engineering company; we believe this leadership change is a key step to rebuilding investor trust.
* Potential upside based on internal price targets over a two-year investment horizon.
All contribution figures are based on NOK returns at the fund level.
Historical returns are no guarantee for future returns. Future returns will depend, inter alia, on market developments, the fund manager's skill, the fund's risk profile and subscription and management fees. The return may become negative as a result of negative price developments.