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October was the fund's strongest month since March, with a return of 6.6 %. The result was driven by strong defense industry reports that beat expectations. As of October 31, the fund has delivered a return of 27.76 % and also got off to a good start in November. Likely there was a bit of a pricing in Republican victory which would be positive for the stock market as a whole and no tax increases, that phenomenon continued after the election. A Trump administration is also expected to have increased demands on European NATO allies and their defense investments in order for them to take greater responsibility for Europe's own security. The European structural defense theme is made clear by quarterly reports from Rheinmetall, Leonardo and the Kongsberg group that are growing in incoming orders and improving margins.
Among the companies with the most development, American companies in intelligence services and cyber security stand out together with European defense companies. Traditional US defense companies stand out on the downside with Huntington Ingalls down sharply on a weak report.
Highest and lowest development during the month
| Highest development | Lowest development | ||
| INVISIO | 16,02 % | Huntington Ingalls Industries | -30,04 % |
| Leidos Holdings | 12,37 % | Lockheed Martin Corp | -6,59 % |
| Booz Allen Hamilton Holding Corp | 11,61 % | International Business Machines Corp | -6,50 % |
| KONGSBERG GROUP | 10,95 % | Microsoft Corp | -5,56 % |
| LEONARDO | 9,74 % | Northrop Grumman Corp | -3,61 % |
Market development
During the month, we invested in two new companies, Invisio and MilDef, as we see great growth potential within Swedish defense companies. Saab remains one of our largest investments and delivered a strong Q3 report with a profit of SEK 966 million, an increase of 48 % from the previous quarter. Saab also reiterated its expectation of organic growth of 15-20 % in 2024, with even stronger earnings improvements. MilDef and Invisio did not meet expectations in terms of earnings, but showed record high order books, which points to strong earnings going forward. Invisio reported an order book of SEK 867 million where 80 % of the orders will be delivered within the next twelve months. The market received these reports positively and the companies were among our best performing holdings in October.
In the US, our investments in intelligence and cyber security continue to develop strongly. These companies benefit from increased demand from government contracts and an increased awareness of national security. We have gradually increased our position in these companies during the autumn. Booz Allen Hamilton reported a quarter of 18 % revenue growth and raised its 2025 forecast to expected revenue growth of 11-13 %. Similar improvements were seen at CACI and Leidos, which both beat expectations and raised their forward forecasts, leading to gains of 5-10 % on the day of the report.