The GDS fund was up 1.15 percent in November. Since its inception in late February, the fund has recorded an increase of 14.13 percent with an annual standard deviation of 9.48 percent. By comparison, the Stockholm Stock Exchange has returned 13.2 percent during the same period, but with a standard deviation of 19.75 percent - just over twice the risk of the GDS fund. The krona strengthened by 1.28 per cent during the month, which had a negative impact on earnings. The upswing for the krona is driven by the expectation of a rate hike in Sweden. In the long run, however, our assessment is that the krona will weaken against the USD, which benefits the fund.
Huntington Ingalls released a strong report during the month and showed a better operating margin than expected. Even with cautious and conservative calculations, the company should achieve good profits and free cash flow for the year and we believe the outlook for next year is positive as we believe these trends will continue. The rate, measured in dollars, was up over 11.8 percent. Other traditional defense companies that performed well during the month were Lockheed Martin, United Technologies and General Dynamics which were up 3.32, 3.13 and 1.96 percent, measured in dollars. It was again a good month for Saab, which was up another 4.38 percent after the company rose 6.83 percent the month before. The GDS Fund increased its holdings in Saab during the month and the company is now the fund's third largest holding. We believe that Saab has great potential if the company can capitalize on an improved operating margin and higher sales.
November was a strong month for the software industry and companies in the security sector. Cyber security company FireEye performed strongly in October and continued up 8.9 percent, measured in dollars, in November. CACI, which provides products and services in the security industry for both state and commercial markets, was up 6.57 percent, measured in dollars, while Mantech, which also provides services in the security industry for critical national defense programs in the United States, was up 9.97 percent, measured in dollars. Both CACI and Mantech saw strong growth in their sales with operating margins of about 5 percent.
Boeing's share price, measured in ice dollars, was up 5.81 percent in November despite the challenges of delivery delays. We remain positive to the company but are following the trend closely.
It was a bad month for Dell, down 9.79 percent, measured in dollars. As we mentioned before, the company is vulnerable to the trade war that is ongoing between China and the United States. Hewlett Packard Enterprise also had a poorer development during the month when the company's sales were lower than the corresponding period the year before. The GDS Fund bought into a new company, Italian Leonardo. The company has had strong profits, better than the market's expectations, but the development in November was slightly worse and the price back 2.99 percent after the fund bought into the company. Other companies that performed less well in November were L3Harris Technologies and Flir which were down 3.24 and 2.64 percent, respectively, measured in dollars.
The investment case for the defense and security sectors is strong and we see continued pressure that NATO member states will increase their defense budgets, which in turn will benefit companies in these sectors. We do not see a sustainable solution to the ongoing debate between China and the US and believe that, on the contrary, there is an immediate risk of rising geopolitical risks as a result, such as US support for Hong Kong.
