April was a strong month for the fund, with an increase of 6.36%. Just over two months ago, the fund is now fully invested and is at an all-time high with a return of 4.65%. By comparison, The Dow Jones US Select Aerospace & Defense Total Return Index has returned 2.67%.
The focus in April was the year's first quarterly reports. Several defense and security companies reported and beat the market expectations in most cases.
Lockheed Martin rushed 11 percent when the company's reported earnings of $ 5.99 per share, well above the market expectations of $ 4.34 per share. Sales were significantly higher than expected and it is remarkable that all business areas exceeded the market's estimates. The company's product range in defense is world-leading with the fighter aircraft F-35 at the forefront. The company's record-high order backlog is unlikely to be affected by the economic situation, which makes Lockheed Martin a good example of the type of company we invest in. Companies that contribute with returns and diversifying properties, which also means that GDS differs from other global funds.
New investments in April were FireEye and Carbon Black, two niche suppliers of security. The companies are well positioned to benefit from the increasing demand for the next generation of cyber solutions.
The long-term investment case is strong. The security situation in the world is strained and investments in defense and security will increase in the coming years. The fund is positioned to benefit from this development, even in a weaker economic situation.
