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The NAV rate for the fund's A class was 108.25 in November. The fund's A-class lost 2.31% in November and since the beginning of the year has returned 3.14%, which is 11.63 percentage points better than the fund's reference index OMX Small Cap.
The fund aims to be a few percentage points better than the fund's reference index (OMX Small Cap) per year at a lower risk than the reference index.
| November | This year | Since start, Dec 2023 | |
| OMX 30 GI | -0,97% | 8,11% | 11,99% |
| OMX Small Cap GI | -2,87% | -8,49% | -3,96% |
| Finserve Micro Cap A | -2,31% | 3,14% | 8,35% |
Best companies in the portfolio and average weight during the month:
| Name | Contribution % | Weight % |
| PRECISE BIOMETRICS AB | 0.47 | 0,78 |
| MILDEF GROUP AB | 0,29 | 0,91 |
| RAYSEARCH LABORATORIES | 0,21 | 0,80 |
| MOBERG PHARMA AB | 0,19 | 0,64 |
| MODERN TIMES GROUP B SHS | 0,15 | 1,00 |
Worst company in the portfolio and average weight during the month:
| Name | Contribution % | Weight % |
| DUSTIN GROUP AB | -0,28 | 0,70 |
| DUROC AB B | -0,21 | 1,02 |
| NETEL HOLDING AB AB | -0,20 | 0,67 |
| NORDISK BERGTEKNIK AB-B | -0,20 | 0,82 |
| NOBIA AB | -0,15 | 0,78 |
Index comparison
Finserve Micro Cap has OMX Small Cap GI as the reference index. Historically, the index series for OMX Small Cap and OMX Mid Cap have followed each other relatively evenly over time. But now the difference between larger small companies and smaller small companies is unusually large, and the difference continued to increase during October. We measure the difference by looking at the mid cap index compared to the small cap index. Between these indices, the difference since the turn of the year is about 26 percentage points and in five years about 60 percentage points. This indicates that there may be significant potential for returns in the small cap companies going forward.
The chart shows OMX Small Cap (green) in comparison to OMX Mid Cap (blue) and OMX Large Cap (black) since the beginning of the year until the end of October. Source: Infront
| Small Cap Index: Company value less than approximately SEK 1.5 billion. |
| Mid Cap Index: Company value between approximately SEK 1.5 and 12 billion. |
| Large Cap Index: Company value greater than approximately SEK 12 billion. |
The market
November was a weaker month where all indexes on the Swedish market closed negative. However, if we look to the other side of the Atlantic, we can see that there American micro cap companies have shown strength after Trump was elected president. The US economy has been buoyed by strong consumer data, a stabilized level of inflation and a continued strong labor market. The rise in the micro cap segment in the US shows why it is in small companies that the greatest growth opportunities are often found.
On the Swedish side, the picture is somewhat more muted. A slower economic recovery, combined with a weaker krona, has contributed to the fact that investors have not yet fully dared to invest in smaller companies.
We see the light at the tunnel
Historically, Swedish small cap companies have often followed the trends from the USA with some delay. When sentiment does turn, it often happens quickly and forcefully. With several reports showing strong fundamental conditions for our portfolio companies, we are optimistic about the coming year. For investors seeking long-term opportunities, this is an exciting time to be exposed to small caps. Patience is key and we work actively to ensure our investments are ready when the market picks up.
Forecast
We clearly see that there is potential in the smallest small companies in view of the implemented and possible future interest rate reductions. OMX Small Cap Index and smaller companies in OMX Mid Cap have fallen sharply after the performance of larger companies, it is a golden time to consider an investment in smaller small companies.
According to the model, more capital is systematically allocated to companies that have a trend in the market. The graph below shows five companies that have a strong trend in the portfolio. See compared to the broad small cap index in black.
| Company | Return 3 months (%) |
| MILDEF AB | 43,55% |
| EQL PHARMA AB | 41,54% |
| CINT GROUP | 13,7% |
| ENEA | 9,59% |
| NELLY GROUP AB | 7,24% |
| OMX Small Cap Index | -12,97% |
If you want to read more about the potential of small companies and listen to our manager Joakim Stenberg's latest participation in Place the podcast,Swedish small companies are the best in the world | Place
Did you know that?
December is often considered a positive month for the financial markets because of what is known as the Santa Rally. Several theories attempt to explain the phenomenon including investors' optimistic mood ahead of the new year and institutional investors adjusting their portfolios before the turn of the year. In addition, December is a month of increased consumer activity due to Christmas shopping which can have a positive effect on the retail sector.
Read more here: https://www.investopedia.com/terms/s/santaclauseffect.asp