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At the end of May, the NAV price for the fund's A class was 116.24. During the month, the A class rose by 6.82 %, which represents an increase of 0.7 % since the beginning of the year. Over a year, the fund is up 7.42 %, placing it in the top tier among 4 funds in the small and medium-sized companies category.
New capital is allocated broadly, with a focus on companies that demonstrate clear and sustainable growth trends. During the month, the fund was overweight in eight of the ten best-performing holdings.
The fund invests in companies with high company-specific risk, which means that price fluctuations can be significant at times. At the same time, this type of company can develop independently of the stock market in general, especially in times of increased market turmoil. The broad portfolio helps to manage the limited liquidity in many holdings, where the fund is in many cases the sole institutional owner. This underlines the fund's niche exposure and its role as a complement to index and broad equity funds. The fund is almost fully invested via a credit facility with a Swedish investment bank to minimize cash and strengthen returns.
A month with many surprises
Small caps started the month strongly, but performance weakened later due to continued geopolitical instability. However, after a weak start to the year, the segment has gradually recovered and is now performing broadly in line with larger companies for the full year.
May was characterized by a volatile, but overall positive development for the small cap market. After a strong start, market sentiment became more mixed, with macroeconomic signals and interest rate expectations remaining in focus. Indications of declining inflation contributed to increased expectations of future interest rate cuts, which generally benefited small cap companies. At the same time, uncertainty about the global economy and the geopolitical situation created more jerky market development.
The biggest corporate surprise of the month was the continued price rise in Sivers Semiconductor. Despite a weaker Q1 report, the share rose by 81 % during the month and approximately 1700 % so far this year. The company's large index weight (over 35 %) contributed greatly to the development in OMX Small Cap. The fund lacked exposure to the share at the beginning of the year, which illustrates the difficulty in capturing rapid momentum shifts.
Intrum, which is considered system-critical for European debt collection management, announced a surprisingly large new share issue. With a market capitalization of approximately SEK 2.5 billion and a planned issue of approximately SEK 7.5 billion, this is one of the largest capital raisings in the segment. The fund intends to participate and may increase exposure in the event of a positive trend break in the share.
Among the fund's holdings, Inission, Orrön, Railcare Group, Proact IT, Hanza and Acast continued to show stable development. In the space sector, the rise continued in anticipation of one of the largest emissions in history, SpaceX, Unibap distinguished itself with a strong rise.
Liquidity in the small cap segment remained limited, amplifying both ups and downs. This underscores the importance of a well-diversified portfolio with relatively evenly weighted positions, in order to capture companies that start trending from low levels.
In summary, May showed a small-cap market balancing improved financial prospects with remaining uncertainty. Longer-term potential remains good, as many small-cap stocks lag behind large-cap stocks.
Results
In May, the fund's A-class returned 6.82 %, which was a few percentage points better than both the large-cap index OMX30 and the small-cap index Carnegie Småbolag. The average weight per holding was 0.99 %. The fund's 60-day volatility is approximately 13 %, which is significantly lower than both the benchmark index and many other equity funds.
Best companies in the portfolio and average weight during the month
| Name | May return | Weight |
| Smart Eye | 51,90% | 2,00% |
| Tobii | 48,08% | 1,44% |
| Unibap Space Solutions | 46,44% | 2,05% |
| Yubico | 31,09% | 1,49% |
| Oncopeptides | 38,80% | 0,98% |
Worst company in the portfolio and average weight during the month.
| Name | May return | Weight % |
| EQL Pharma | -50,03% | 0,31% |
| Intrum | -43,40% | 0,49% |
| Cantargia | -42,66% | 0,51% |
| Maha Capita | -22,20% | 0,52% |
| Trans theme | -20,18% | 0,67% |
Did you know that: The OMX Small Cap index companies have a total market capitalization of approximately SEK 100 billion, compared to the OMX Large Cap Index companies, which have a total market capitalization of approximately SEK 15,000 billion.
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.