Meriti Neutral monthly report – July 2025

Meriti Neutral share class B rose in value by +0.33 percent during July. The fund has thus generated positive returns during all seven months of the year and the year's increase totals +5.27 percent. Since the strategy's inception pro forma 2010-06-30, it has returned +221.2 percent, while the correlation to the Swedish stock market has been 0.11.

During the month, the EU and the US reached an agreement in principle on trade and tariffs. The agreement is positive in that it creates greater predictability, but it is clear that companies will be hit by high tariffs.

The reporting season for the second quarter of the year began during the month. Of the companies in the STOXX600 Index that reported, 53.7 percent have exceeded market expectations. The estimated average profit growth is 0.6 percent. Four of the index's ten sectors are expected to report rising profits compared to the second quarter of 2024.
Technology has the highest expected earnings growth (+26 percent), while Consumer Cyclicals has the weakest (-24 percent).

During the month, the fund has net bought companies within Banks, Materials and Pharmaceuticals, Biotechnology & Life Sciences at sector level. Correspondingly, the fund has net sold companies within Transportation, Technology Hardware & Equipment and Automobiles & Components. The fund's largest positive net positions at the end of July were in the Banks, Retailing and Telecommunication Services sectors, and the largest negative sector exposures were Semiconductors & Semiconductor Equipment, Diversified Financials and Automobiles & Components.

The fund's Value-at-Risk (95%, 1 day) has averaged 0.50 percent during the month and the exposure to the stock market, the fund's estimated beta to global equities,
has averaged 0.06. At the end of July, the fund had a total gross equity exposure of 173 percent, consisting of 193 bought (long) equity positions balanced by 216 sold (short) equity positions. The size of the long positions averaged 0.53 percent and the short positions averaged -0.33 percent.