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The fund owns the companies that other funds do not own and seeks capital for trending companies
At the end of August, the NAV price for the fund’s Class A shares stood at 109.74. During the month, Class A shares rose by 1.47 %, representing a return of -4.77 % since the start of the year. Over a rolling twelve-month period, the return stands at -5.74 %, with a standard deviation of less than 13%.
The fund systematically tracks the trend in the smallest companies on the stock exchange and uses dynamic risk control to quickly reduce exposure or take profits when the trend turns downwards.
August brought a cool market but more corporate surprises
During August, many listed companies reported, and several surprised on both the upside and the downside. The volatility in micro-caps remains greater than historically, which makes classic stock picking particularly challenging. Micro-caps are often followed by few or no analysts, meaning less external analysis, fewer estimates and fewer data points to compare with. At the same time, an individual piece of news or a change in the company's development can rapidly alter the entire investment case. This underlines the importance of a systematic management strategy, where objective signals from the market's price performance, momentum and risk characteristics are given greater weight than traditional, fundamental stock picking. Our assessment is that a rule-based and disciplined process can create better conditions for systematically capturing market movements, rather than relying on individual stock selections and subjective assessments.
The fund rose by 1.47%; the large-cap index, the OMX Large Cap, rose by 1.80 % during the month, the OMX Mid Cap rose by 3.12 %, whilst the OMX Small Cap fell by 1.11 %.
The performance of the Small Cap index continues to be heavily influenced by Sivers Semiconductors, even though the impact is smaller than before. The company's market value has decreased sharply, but the share still holds a significant weighting in the OMX Small Cap index.
The large weighting relative to other companies means that the index's performance does not fully reflect the performance of the many other companies included in the index.
Among the companies on the Stockholm main list whose Q2 reports resulted in the strongest positive share price performance were Ferronordic, Oncopeptides, Yubico, Karnov and BTS.
On the downside were Smart Eye, Sivers Semiconductors, Tobii, Verve Group, Sanion, New Wave and RaySearch, amongst others.
Smart Eye was likely one of the month's biggest disappointments. The share fell sharply despite clear revenue growth, as performance did not live up to the market's high expectations.
The development illustrates how difficult it can be to predict individual small-cap share price reactions solely based on the companies' fundamental performance. Even high growth figures can be insufficient if expectations are already set high.
The performance of the fund and companies during August
The fund performed positively and better than the OMX Small Cap Index during the month, with industrial companies performing best, followed by medtech and biotech companies.
During the month, the fund was overweight in nine of the ten best-performing holdings in the portfolio.
Best performing companies in the portfolio during the month, market value and portfolio weight as of 31 August.
| Name | August yield | Weight | Market value |
| FERRONORDIC | 33,43% | 1,39% | 1453 SEK |
| Wästbygg Gruppen B | 26,61% | 1,59% | SEK 468m |
| Hansa Biopharma | 21,88% | 2,16% | SEK 4,693 million |
| BALCO GROUP | 21,71% | 0,54% | 426msek |
| INTRUM | 21,55% | 1,12% | SEK 13bn |
Worst companies in the portfolio during the month, market value and portfolio weight as of 31st August.
| Name | August yield | Weight % | Market value |
| CATENA MEDIA | -25,00% | 0,45% | 209 million SEK |
| TOBII | -22,19% | 0,46% | SEK 254m |
| SMART EYE | -17,79% | 1,10% | 2,195m SEK |
| ENAD GLOBAL 7 | -16,46% | 0,95% | 1,403mSEK |
| RAILCARE GROUP | -14,74% | 0,85% | 721msek |
The fund's investments are systematically guided by a quantitative model that analyses a number of factors to identify shares with strong and sustainable positive trends.
Did you know that? Shares that have performed strongly over the past 3–12 months have historically had a tendency to continue to perform strongly during the subsequent period as well. The phenomenon is called momentum the momentum effect is one of the most well-studied anomalies in financial research.
Source: Jegadeesh & Titman (1993), “Returns to Buying Winners and Selling Losers: Implications for Stock Market Efficiency”, The Journal of Finance.
A fund strategy that differs from other funds
The fund's goal is to achieve good risk-adjusted returns, offer equity exposure to companies that few other funds own, and to weather downturns well through equal weighting and even sector exposure.
The fund's holdings are relatively equally weighted over time. Historically, the strategy of equally weighting a broad equity portfolio has resulted in higher risk-adjusted returns compared to market-value-weighted broad portfolios. This outperformance can be attributed to the strategy's ability to better handle downturns, unlike value-weighted portfolios that are often heavily concentrated in individual stocks. The strategy is based on trend-following investments when the fund receives capital, focusing on companies that exhibit low volatility and a clear positive trend.
Finserve Micro Cap invests primarily in companies listed on the regulated market. Over time, the portfolio consists of more than 100 companies listed primarily on the OMX Small Cap and OMX Mid Cap lists. Over time, the companies in the portfolio have an average company value of approximately SEK 2.5-3.5 billion. This value is significantly lower than the average among competitors' micro cap and small company funds.
Thanks to regular equal weighting, the trend strategy and the fact that the fund is one of the few fund owners in many of the companies, the fund has a low correlation with traditional micro cap and small company funds.