Equity Market February 2023

Management comments – February 2023 

Two steps forward, one step back! Equity markets started the month on the same track as January with continued gains and better sentiment. Many companies forecast continued growth at the time of their report releases, and PMI in the U.S. managed to climb above the expansion mark. Even Fed Chairman Powell and ECB President Lagarde were more bipartisan than usual about the inflation outlook at the start of the month. Then cold winds came in the form of continued high US inflation, especially in the service sector, which also risks being held up by the strong labor market. Fed members made new hawkish comments, as did ECB members, who later also noted that inflation in Europe remained at high levels and interest rates in the market rose as a result. The development was the same in Sweden, where the Riksbank, as expected, raised its key interest rate by 50 basis points and aired its dissatisfaction with the weak development of the krona, which caused the currency to strengthen.

The development in the fixed income markets meant a tough month for interest rate sensitive stocks such as real estate, while banks developed positively. Simplicity Norden and Simplicity Sverige rose by 1.7% and 1.3% respectively, largely thanks to high weight in banks such as Nordea, Swedbank, Danske Bank, SEB, DNB and Sydbank, all of which rose by more than 5% during the month. The latter is also one of the largest holdings in Simplicity Småbolag Global, which also benefited from overweight in the banking sector. Comfort Systems USA, also a large holding in the fund, rose by over 20% after the installation company in HVAC, electrical and mechanical engineering released another great report. Goldwin, a Japanese manufacturer of functional clothing for skiing and sports, also rose for a similar reason.

The continued strong retail sales in the US could be seen in the quarterly report for Loomis, a holding in Simplicity Norden, Simplicity Sverige and Simplicity Småbolag Sverige. The company increased sales and earnings last quarter and had an organic growth of 11.8%. The stock jumped 9%. The IT group Addnode is also found in all three home market funds. The share rose sharply in February when the company reported new sales and earnings records in the fourth quarter, while demand was good in several customer segments.

However, this month’s skyrocket stock was found in Simplicity Green Impact. South Korea’s Ecopro, which develops technologies and materials for renewable energy, batteries and air purification, among others, rose by over 130% during the month after the company reported continued strong growth at the end of January. To meet the demand, the company plans to expand its production of lithium hydroxide to double capacity by the second half of the year.

Share of the month 

This autumn and winter, many people realized that a heat pump for the house would be great.  After all, it is both economical and good for the environment.  Nibe has  known  this for 40 years.  The small company from Markaryd is no longer that small after several years of high growth that has culminated with the energy crisis. During the month, the company reported a sales growth of 39% for the fourth quarter and sales for the year passed SEK 40 billion for the first time.  However, growth appetite is still big as they aim to double sales once again by 2026 Nibe is one of the holdings in Simplicity Norden, Simplicity Sverige and Simplicity Green Impact. 

Performance of the funds 

Simplicity Norden rose by 1.7% and Simplicity Sverige by 1.3%. Simplicity Småbolag Sverige rose by 0.7% while Simplicity Fastigheter and Simplicity Green Impact fell by 6.6% and 1.9%, respectively. Simplicity Småbolag Global performed best with an increase of 2.1%. 

Simplicity Norden

  •  1,7%
  • 5,8%
  • 3,9%
  • 4,9%
Current Monthly Report

Simplicity Sverige

  •  1,3%
  • 6,5%
  • 3,5%
  • 7,9%
Current Monthly Report

Simplicity Småbolag Sverige

  •  0,7%
  • 5,7%
  •  -8,8%
  • 6,8%
Current Monthly Report

Simplicity Småbolag Global

  • 2,1%
  • 3,7%
  • 5,9%
  • 7%
Current Mothly Report

Simplicity Fastigheter

  • -6,6%
  • 3 months  6,3%
  • 12 months  -29,8%
  • YTD  3,5%
Current Monthly Report

Simplicity Green Impact

  • -1,9%
  • 3 months  0,2%
  • 12 months  N/A%
  • YTD  6,2%
Current Monthly Report
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