February: the reports from the tech companies as expected strong

We saw a sharp turn in the market during February where the whole rise supported by good reports disappeared in the fear of higher interest rates in the latter part of the month. The reports from the tech companies were, as expected, strong during the quarter, but we did see a mixed development for share prices despite most beating the consensus.

The rising long-term interest rates also changed the behavior of the market, where for a long time work-from-home was traded in a lump against the recovery shares. Now the market instead began to sell the companies with the highest multiples and those that performed best. This made the old correlations no longer exist and we have adjusted our positions slightly to get a balanced risk in the portfolio.

Industry data continues to show strength in the trends we invest in. Semiconductor equipment data was at a record high in January and advertising purchases on internet platforms are accelerating. However, we must remember that the comparability figures will be tougher from March in the companies that have benefited from work-from-home. In the portfolio, we have reduced somewhat the companies with the highest beta and sold our position in Zynga when it performed strongly. The fund returned 4.3% in February.

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