Small cap stocks have historically outperformed large cap stocks, but last year was not a great year for small cap funds in general. However, funds that included mid-cap stocks in their portfolios outperformed Carnegie’s small cap index. With lower interest rates and a stronger economy, there are conditions for a better year ahead.
At the end of the year, some funds took the opportunity to rearrange their portfolios, as shown by data from shareholder data company Holdings and fund companies.
## Swedbank Robur’s Dismissal of Lundbergs
Swedbank Robur’s small cap fund, for example, increased its position in Loomis and decreased its position in Sobi. The fund’s best performers in December were its largest holdings, Lagercrantz and AAK, while Yubico and Wihlborgs weighed it down.
The decision to exclude Husqvarna and Lundbergs had a positive impact, as indicated in the fund’s monthly report. It seems that these companies will not be included in the near future.
## Adding Apotea, Reducing Fortnox
Spiltan’s Small Cap Fund, on the other hand, received a boost from Bergman & Beving and Medcap in December. Both companies have clear business models that combine organic growth with well-chosen acquisitions. This strategy, along with clear financial goals, contributed to their success.
Fund manager Pär Andersson adjusts his portfolio based on perceived mispricing or interesting opportunities. He recently added Apotea to the portfolio, impressed by the new company’s ambitious goals to double revenue within 4-5 years and achieve a long-term operating margin of 7-8%.
While he added Apotea, he reduced holdings in two other companies. “I took the opportunity to trim positions in Lagercrantz and Fortnox as their weights had become too large in the fund.”
## Focusing on Early Cyclical Companies
Christian Brunlid, who manages Handelsbanken’s Swedish Small Cap Fund, decreased exposure to the real estate sector while increasing investments in early cyclical companies like Storskogen, Trelleborg, and AQ Group. Truecaller, MTG, Surgical Science, and Stillfront were the top contributors to the fund’s performance, while Hexatronic, Corem Properties, and Sdiptech had a negative impact.
## SEB’s Realignments and Beliefs
SEB’s small cap fund made significant changes in the fall, reducing its holdings in Stillfront and Dometic Group. The fund’s largest increase was in Stendörren, where holdings increased by 9%.
## Carnegie’s Strategic Moves
Carnegie’s small cap fund made strategic moves during the fall, divesting from MTG and Dynavox while adding Instalco and Sats. The top performers for the fund were Mildef, Bonesupport, Truecaller, and TF Bank.
In conclusion, small cap funds are adjusting their portfolios to take advantage of changing market conditions and opportunities for growth. By focusing on promising companies and staying agile in their investment strategies, these funds aim to deliver strong returns for their investors in the coming year.