EN 
SE 
The month of May was characterized by a broad strong development both in shares as well as the transaction leg, where Exelity closes the month at +5.3% after fees. Exelity is thus +13.8% for the year, with the fund now showing seven consecutive months of positive returns since I took over management last fall. Over the past 20 months, the fund has only had three negative return months, with the largest single month decline being -1.6%.
As mentioned, the fund is +13.8% for the year, which compares to the First North Index which is +1.1%, while the OMX Small Cap PI is +9.5%. We note that the risk-on sentiment is back after the first interest rate cut in a long time from the Riksbank, where we remain optimistic that the gap between small companies and large companies will close again in the coming year.
During May we saw a broad development in the listed portfolio which increased by 6.3% during the month. Several of the fund's core holdings such as Smart Eye, Paxman, BPC Instruments and FreeTrailer rose 10% or more during the month. It is noteworthy that no holding constituted more than 10% of the fund's NAV, and thus the rise was broad among the portfolio companies. Despite an average equity exposure of only 47% since January 2023, the fund has returned 44% after fees during the same period, beating all indices.
One reason why Exelity parries the declines well is the transaction leg, which generates continued good returns regardless of the market climate. The transaction leg continues to pick up at a steady pace and contributed 1% for the month, with loans and guarantees now showing only 5 out of 31 negative return months since inception, with the largest month of decline being recorded at -0.3%. The transaction leg continues to form a stable foundation in Exelity, and is expected to continue contributing approx. 1% to NAV in the coming months.
Within guarantees and loans, May was a somewhat quieter month, where no new guarantees were signed. This as the warranty season enters the low season as the summer approaches, where the company generally does not tend to want its subscription period during the summer months.
In total, loans now make up approximately 25% of Exelity, and it bears mentioning that the loan portfolio consists of listed companies where all companies are listed on the Swedish stock exchange. Exelity has continued to have zero loan defaults since inception, where we continue to reserve for potential losses.
We note that Exelity's quantitative modeling for loans and guarantees continues to create strong value for the fund's shareholders, and is a main reason for the fund's strong development in transactions.