The fund's return was -1.11% in May, a strong result for a globally diversified equity fund. The fund's benchmark index returned -6.76% in May, while the return for the Dow Jones US Select Aerospace & Defense Total Return Index was -3.59%.
Since its inception, the fund has hit the benchmark index by 2.8% and the Dow Jones US Select Aerospace & Defense Total Return Index by over 5%. The fund's development strengthens our argument that an actively managed defense and security fund can help contribute to a more resilient portfolio, which has now been demonstrated in a tougher stock market climate.
In general, share prices for the defense sector were strong in May. Harris Corporation and L3 Technologies were up by more than 10%. The companies will be merged later this year and the strong price trend is an indication that the market is positive about the merger. Booz Allen Hamilton, Northrop Grumman and Lockheed Martin contributed positively and form part of the portfolio's larger holdings. CACI, Leidos and SAIC also had a positive return in May.
Companies with poorer performance during the month were Symantec, Dassault Aviation, Textron, Saab and Hewlett Packard. Symantec has had this difficult for a period, and after a poor Q4 result, the company's CEO said. The company is fundamentally strong, which should help against a short-term price pressure.
Carbon Black, which was included in the fund in April, was up almost 10% in May. Carbon Black represents the next generation of cyber security companies. The company has an interesting focus and has great potential and fits well into the fund as a minor allocation.
The fund is on Nordnet, MFEX, Nord Fondkommission, fondmarknaden.se, Strukturinvest and maxfonder.se.
