Print

Portfolio Manager comment Coeli Global Select April 2020

April was a month with much spring sunshine and a recovery in the global stock markets. Our global fund increased in value and was up by 13.10 percent, beating our benchmark by 2 percentage points. Coeli Global Select’s performance year-to-date is now -6.74 percent, which is 3.9 percent better than the benchmark index. Ahead, we see the negative effects of the coronavirus pandemic diminishing and the economy improving before year-end.

The holdings with the greatest positive impact on returns during April were large US companies, with Amazon, Thermo Fisher, HCA Healthcare, and United Health contributing the most. The four companies that had the biggest negative effect were RBL Bank, Sterling, AAK, and Martin Marietta. It was clear that the market favours US entities with stable income and that can offer greater protection during times of turmoil. Many of our companies reported during the month and, as expected, those working with software and data centres provided the best reports. As we’ve mentioned before, Amazon is a winner during the coronavirus crisis and, accordingly, its revenue rose by 26 percent compared with the same quarter last year. Another winner was Microsoft, which saw its revenue up 15 percent during the same period. Two companies with weaker performance were Visa and Mastercard, largely due to reduced credit card purchases during April. The vast reduction in travel has hurt credit card purchases.

Key market events and trends affecting performance

By far the most remarkable event of the month was the oil price turning negative. In practice, this meant that those who were able to “buy” the oil and store it were, in effect, being paid to do so.

Another important development was that the Fed decided to buy high yield (junk) bonds to support the bond market. Above all, this offers support to the US energy firms, which are experiencing difficulties right now, but it is also important for a functioning bond market, since many companies borrow money there.

The reporting season has been as we expected; January and February were, in principle, unaffected, while sales and profitability weakened in March. During a conference call, Adidas’ Danish CEO Kasper Rorsted explained that the company now plans to begin opening up its stores in Europe again. We see signs that society is, slowly but surely, starting to normalise and open up again.

Portfolio changes

During April, we sold two Special Situations cases: Nordea and Sterling Construction. We sold Nordea as we judged that the bank could see more loan loss provisions during the coming quarters, which would put a damper on the stock price. Sterling Construction, on the other hand, we divested to give us an opportunity to make another, more exciting investment. More will be revealed about our new holdings shortly, most likely on our blog: coeli.se/global

The fund’s positioning

April saw us reduce the proportion of the fund in Special Situations stocks somewhat, taking it down to 7 percent. Otherwise, the fund is packed with 30-something Champions that we deem to offer good prospects for the coming 12 months.

Coeli Global Select I-EUR

Performance in Share Class Currency1 MthYTD3 yrs*Since incep*
Coeli Global Select – I EUR13.10%-6.74%20.60%67.15%
Benchmark11.06%-10.62%13.62%44.21%

* the historic performance before 2018-06-30 is an estimated performance based on the R EUR share class adjusted for
the different Investment Management fee. It shall be noted that the adjusted historical performance can differ from the real
outcome and therefore shall only be seen as an indicator.

Andreas Brock, CFA

Portfolio Manager Coeli Global Select

Henrik Milton

Portfolio Manager Coeli Global Select

Fund Overview
Inception Date2014-11-28
Management Fee1.4 %
Performance FeeYes, 10%
Risk category5 of 7
Top Holdings (%)
GLOBAL PAYMENTS INC 4.6%
MICROSOFT CORP.4.5%
FISERV INC.4.5%
UNITEDHEALTH GROUP INC4.2%
NVIDIA CORP.4.1%

 

DISCLAIMER. The information provided here does not constitute professional financial advice. Past performance is not a guarantee of future returns. The price of the investment may go up or down and an investor may not get back the amount originally invested. The key investor information document (KIID) and prospectus are available at www.coeli.se.