The manager begins by noting that the market reacted positively to the trade agreement concluded between the UK and the US. Even more positive was the news that China and the US had paused planned tariff increases, as well as the postponement of the 50 percent tariffs on the EU. During the month, a US federal court ruled that Trump's general tariffs were illegal, but this ruling was not upheld by a higher court. The case is now expected to be heard by the Supreme Court.
The fund manager also highlights that credit rating agency Moody's decided during the month to downgrade the US credit rating from the highest to the second-highest level. The US now has a national debt of 124 percent of GDP and a persistent budget deficit.
"The minutes from the US Federal Reserve's latest meeting gave the impression that Fed members will not lower the key interest rate until they see greater signs of weakness in the economy," writes the fund manager.
Two expected interest rate cuts were priced out by the market, and Sweden's Riksbank also decided to wait and see. At the end of the month, it was reported that Sweden's GDP had contracted in the first quarter.
The fund's performance benefited for the seventh consecutive quarter from its overweight position in the banking sector.
Among individual holdings, the fund's second-largest holding, Swedbank, contributed most positively, driven by higher target prices and estimates from analysts. Danske Bank and ABB also contributed positively, while Securitas, Mandatum and Hemnet were among the weakest performers.
The position in Novo Nordisk was increased during the month to a weight of 1.9 percent at the end of the month. At the same time, the entire holdings in Trelleborg and Fortnox, which is currently up for acquisition, were sold.
In conclusion, the fund manager writes that the reporting season was okay, but that any major effects from trade conflicts and uncertainties will be delayed until future quarters. In general, analysts have adjusted their company estimates for 2025 downward.
The largest holdings in the fund's portfolio at the end of the month were Investor, Swedbank, and SEB, with weights of 9.7, 5.2, and 4.8 percent, respectively.
In terms of geographical exposure, Sweden accounted for the largest share with 64.8 percent, followed by Norway and Finland with weights of 11.8 and 10.0 percent, respectively.
At the end of the month, the fund had its largest exposure to the finance, industry, and information technology sectors.
| Simplicity Norden, % | May, 2025 |
| Fund MM, change in percent | 3 |
| Fund this year, change in percent |
