July: Growth returns

Investors now don't really know which leg to stand on, are we heading for new shutdowns driven by the Delta version of COVID or are we heading for the economies to open up with growth as an effect? Inflation also appears to be higher and more persistent than we previously thought. The results from the company reports for Q2 have surprised positively so far, however the price effect has been quite minimal in many cases. The sectors of finance, industry and technology have fared best.

Technology reports have been very strong with a few exceptions such as Amazon and Pinterest. Both have been affected by the fact that the economies have opened up again and thus lower use of their services. However, we believe that growth will return after this tough comparison period. Software has seen accelerating growth during the quarter and the same applies to cloud services. Social media companies also had a strong sales quarter including Pinterest. Where we see slightly tougher comparisons is in the use of services that are affected by the fact that many economies have opened up and we can do other things than just sit in front of the screens.

The semiconductor equipment names, ASML, KLA and Lam Research delivered as expected a good quarter and with good guidance for the second half of the year and indications that they, like us, believe 2022 will also be strong.

The fund closed up 0.4% in July and is now up 18.8% this year with a Sharpe ratio of 2.7.