Tailwind for Fondita Global Megatrends
Fondita Global Megatrends has had a strong first half of the year and has as of June 19, risen by 16.3%, which is 4.3% better than the global MSCI World Index. The fund is also this year very well positioned compared to other funds in its peer group. This has been particularly welcome after the tough first half of 2022. Since its launch in 1998, the fund has beaten both MSCI World and MSCI Europe by a good margin. What is unique about the fund is that it invests globally in three different themes or megatrends, namely technology, health and well-being, and climate and environmentally smart solutions. The same themes have been in the funds focus ever since it was launched, but the interesting thing is that they are more relevant today than ever. By identifying themes where there is clear structural growth for a long time to come and finding companies that are optimally positioned within these three megatrends, we believe in continued outperformance of the market over time.
This year, it has been companies that are expected to benefit from various AI-related applications and opportunities that have accounted for a significant part of the fund´s outperformance. The fund’s best holding this year has been NVIDIA, which the fund bought in the autumn of 2022. NVIDIA develops advanced processors whose demand has skyrocketed after the rollout of generative AI has led to a sharp increase in demand for data management capacity that enables AI-based language and image generation models. The fund’s holding in the software giant Microsoft has also been an important contributor as Microsoft is known to be one of the main owners of the AI research company OpenAI, which, among other things, developed the AI application ChatGPT, which took the world by storm at the turn of the year. We have also made an investment in the Dutch company ASM, which supplies high-tech equipment to manufacturers of processors and microchips. These three holdings provide good exposure to the investment wave that is now underway, as a result of the rise of AI.
Another company that has contributed significantly to the fund’s excess return this year has been the Finnish company Kempower. The company fits into the theme of climate and environmentally smart solutions as it produces fast-charging stations. The share price has increased sixfold since its IPO 18 months ago and Kempower had grown to become one of the fund’s largest holdings in May. It was also in May that we made the decision to sell the entire holding as the valuation had become somewhat challenging. The fund’s obvious strength is that it has three strong legs to stand on and is focused on areas where we expect to see significant growth in the future. Naturally, the fund’s different themes develop in different cycles, but over time we believe that quality companies that are well positioned within these megatrends have a good chance of performing well.