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2019 was a good year for the Global Security Fund, which increased by 11.06 percent in the ten months since its inception at the end of February. Increased geopolitical tensions around the world, especially during the middle of the year, meant that the Global Security Fund clearly outperformed other sectors during these periods. The pattern we saw in 2019, as well as historically during periods of geopolitical tension, strengthens the argument that a stock portfolio diversified into the defense and security sector contributes to a more resilient portfolio.
The optimism surrounding the US and China trade agreement led to strong stock market developments during the month of December. Particularly positive was the development in consumer cyclical companies, which contributed to lifting the S&P 500 by 0.75 percent (SEK) during December. In comparison, the Swedish stock market increased by 2.4 percent during the month. The tech sector also performed strongly and the Global Security Fund benefited from the portfolio's allocation to the security sector, however defense holdings underperformed in December which, combined with a stronger krona, saw the Global Security Fund retreat 2.69 % during the month. The strengthening of the krone in recent months has negatively affected the fund's return, but our assessment is that it is a short-term correction. Our expectation going forward is that the USD will continue to be strong.
The best performing companies in the fund during December were Leidos, CACI, Microsoft, Mantech International and NortonLifeLock (Symantec). Leidos had an annual return of over 90 percent and was also up 5.5 percent in December. The reason for Leidos' strong development was that the company announced that it will acquire the American privately owned company Dynetics for USD 1.65 billion. Dynetics is a hardware-focused company that has won a number of lucrative government contracts, including satellite development, and will provide Leidos with attractive opportunities to increase sales growth. CACI, another technical company in the portfolio, was up 2.23 percent (SEK) during December, this after the company won a USD 6.5 billion contract from the Pentagon that runs over ten years.
The month's worst performing company was Boeing, which was down almost 23 percent (SEK). The company's technical problems with the 737 Max led to the company's CEO leaving his position. During the month, the Global Security Fund reduced the allocation to Boeing to close to 0. There is a lot of substance and quality in Boeing and we expect the company to turn the situation around, but we judge that there are currently other investments that offer better opportunities for less risk. Textron, General Dynamics, Flir and Booz Allen Hamilton all performed negatively during the month.
After a strong year, the world's stock markets are once again trading at high multiples. The stock markets may continue to trade at these high levels, or even higher, but it is clear that the valuations are based on a belief in continued strong growth. Our view is that the market has not currently priced in the geopolitical risks that exist and that these risks may have a negative impact on growth. If the market's view of risk changes, this can play out over a short period. How resilient is your portfolio?