EN 
SE 
There was a generally strong development on the stock market in July and once again it was technology companies that acted as locomotives. The investment interest in the cyber security sector is clear and companies within the sector performed particularly strongly, which also had a positive effect on many of the fund's holdings. Crowdstrike was up 12.9 percent and is up 127 percent for the year, while NortonLifeLock, a company the fund increased its holdings in during June, was up 8.2 percent and is up 47.2 percent in 2020. The dollar continues to act as a headwind, retreating 5 .8 percent in July, which had a big effect on the fund's return, which ended up down 3.4 percent.
It was an active month with more than half of the portfolio companies reporting quarterly results. Saab reported stronger-than-expected sales of SEK 8.84bn with revenue growth compared to 2019 corresponding to 4.6 percent and a significantly better result than expected. As a positive sign of Saab's future sales development, there were new orders of SEK 9.25m during the second quarter and the company enters the third quarter with a strong order backlog, including large orders from the US Army and the expectation is that the company will be cash flow positive . The company was up over 20.8 percent in July.
Norwegian defense company Kongsberg Gruppen rose 1.6 percent (SEK) in July after reporting a better-than-expected result, despite lower-than-expected sales.
While the dollar rate dampened returns in SEK, the majority of holdings reported significantly better results than expected. Textron, a company with significant exposure to the aerospace industry, beat expectations with stronger sales and a stronger-than-expected profit. A robust demand for the company's products in the defense industry will mitigate the downside risk. Textron was up over 6 percent in USD. Other companies that performed well in July with stronger than expected results were Northrop Grumman which beat expectations in terms of both sales and earnings and were up 5.7 percent (USD), Booz Allen reported slightly weaker sales than expected but stronger than expected earnings and was up 5.1 percent (USD) and Lockheed Martin reported stronger-than-expected sales and better-than-expected earnings and was up 3.9 percent (USD).
The dollar has retreated more than 16.5 percent since March and this has negatively affected the fund. Although it is a large price movement, it is not unusual from a historical perspective and it is our assessment that we will see a stronger dollar in the longer term which will benefit the fund.
Boeing and Raytheon Technologies reported weaker than expected results and this is reflected in the month's price movements. Boeing was down 13.8 percent (USD) while Raytheon retreated 8 percent (USD).
No major changes have been made to the fund during the month, only some minor tactical adjustments.
The quarterly reports that were released during the month of July support the argument that the ongoing crisis has not had a major impact on the majority of the fund's holdings. Some of the holdings have a slightly greater exposure to the aviation industry and the real economy, but by and large the portfolio is exposed to global security and we view the fund's opportunity to generate good future returns positively.
You can download the report here