The managers begin by noting that the stock market continued to be affected by US tariffs during the month. The term TACO (Trump Always Chickens Out) became a trading strategy whereby investors chose to buy during the downturn every time Trump raised the tone.
The main contributors to the fund's performance during the month were Pandora, Ratos, and Protector Forsikring. On the negative side were Revolution Race, ITAB, and Securitas.
In terms of the fund's portfolio activity, the holdings in Bahnhof, Scandic Hotels, Fagerhult, Husqvarna, and Munters were sold. At the same time, exposure to Alleima and Valmet was reduced.
The sale of Bahnhof came after the managers found it difficult to see any form of margin expansion going forward.
"We believe we hear in the CEO's comments that growth opportunities are limited in areas with public network owners and that future growth may therefore occur at lower profitability," the fund managers write.
The managers also point out that the company's international expansion plans have made the uncertainty in the holding greater than ever.
Instead, they chose to add Catella, Huhtamäki, and VBG to the portfolio and increased their holdings in Nilörngruppen, Pandora, Svedbergs, Thule, FlatexDegiro, Storytel, and Securitas.
In Catella, Investment Management (IM) is seen as the best part of the company, and it is also where the company hopes to focus its efforts going forward.
"Even if we don't believe or expect it, it would probably be positive for the share if Corporate Finance were also divested. This would allow full focus on IM, which should grow AUM by 5 percent over the next two years and then return to 10 percent growth with scaling profitability."
The Nilörngruppen is described as a stable and well-managed company. Its valuation is said to be at an all-time low, which the fund managers do not consider fair.
Finally, the fund's trading in Bravida during the month is also highlighted.
"Our holding in Bravida is essentially unchanged, but we initially sold some at high levels (around SEK 95) and then bought back after the share price plummeted to SEK 82 following news that we considered to be an overreaction by the stock market."
The largest holdings in the fund's portfolio at the end of the month were ITAB, Revolution Race, and New Wave, with weights of 5.0, 4.9, and 4.3 percent, respectively.
| Kavaljer Quality Focus, % | May, 2025 |
| Fund MM, change in percent | 2.9 |
