The fund Lannebo Sverige Plus decreased 0.2 percent in October, which was better than the fund's benchmark index which decreased 3.4 percent. Since the beginning of the year, the fund has returned 10.6 percent and is thus better than the index, which has increased 10.5 percent. This is stated in a monthly report from the management duo consisting of Robin Nestor and Martin Wallin.

In the introduction, the managers write that the fund performed well in October thanks to positive quarterly reports. Companies are in a soft landing with subdued demand and profitability challenges.

Ericsson improved profitability significantly compared to last year, with an adjusted gross margin of 46.3% and an operating margin of 11.9%.

The managers state that the improved profitability was partly due to a more favorable geographic sales mix, with North America growing organically by 55%.

According to the managers, banks performed above expectations with solid quarterly reports. Despite lower net interest income and squeezed lending margins, Swedbank and Handelsbanken showed good returns on equity.

The managers highlight that the forestry sector faces continued profitability challenges with sharply increased raw material costs. Timber and pulpwood prices have risen 60 percent and 100 percent respectively since the beginning of 2022, partly due to the lack of exports from Russia.

"Forestry companies are benefiting from higher profits and rising asset valuations, while other product categories are being squeezed by the challenge of price compensation in an environment of tepid demand and low capacity utilization," the managers write.

Autoliv maintained its full-year profitability guidance of 9.5% to 10.0% despite several profit warnings from passenger car manufacturers. The adjusted operating margin for the first nine months was 8.5 percent, requiring a strong finish to reach the forecast.

The managers say cost compensation from customers and internal savings programs mitigated the impact of late cancellations from carmakers, but point out that this continues to pressure profitability.

During the month, the fund made major purchases in Essity, Boliden, and SCA, while holdings in SOBI, Millicom and Ericsson were reduced.

The fund's largest holdings at the end of the month were Ericsson, Sandvik, and Swedbank with portfolio weights of 8.5, 7.5 and 7.0 percent respectively. The largest sectors were materials, technology and financials.

Lannebo Sweden Plus, %October, 2024
Fund MM, change in percent-0,2
Index MM, change in percent-3,4
Fund this year, percentage change 10,6
Index this year, percentage change 10,5