The GDS Fund fell by 1.65 per cent in October and the return since its inception at the end of February is 12.83 per cent. The return is largely due to the krona strengthening against the USD during the month, which we believe is a short-term strengthening. The GDS Fund offers good diversification characteristics and we can see that an allocation of 25 % in the fund and 75 % in MSCI World or OMX yielded lower risk and higher return than an investment only in MSCI World or OMX.
It was a strong month for the fund's cyber security holdings. FireEye and Palo Alto Networks both recorded strong gains, rising 15.64 percent and 11.36 percent, respectively. FireEye beat profit expectations during the third quarter, but it was not only an increased profit that had a positive impact on price performance. Rumors abound that FireEye is an interesting acquisition candidate for major players. Larger companies that want to broaden their portfolio with interesting products and services that can become more profitable in a wider distribution. This is a clear trend we have seen in the market lately, which has historically also benefited the GDS Fund. FireEye is technically very advanced and has revenues of around $ 1 billion per year. The report for Q3 stated that the company currently has approximately 8500 customers in 103 countries. Approximately one third of the new customers of the quarter purchased additional products and services from the company. The GDS Fund has increased its holding in FireEye by 2 percentage points.
In addition to FireEye and Palo Alto Networks, Raytheon, Airbus and Saab (return in USD) performed very well in October, increasing 9.24 percent, 9.04 percent and 8.26 percent respectively. Raytheon released a stronger quarterly report than expected, with revenue up 2.37 percent and earnings per share up 7.69 percent. Saab reported significantly higher income and earnings per share than expected, SEK 7,914bn compared to SEK 6,719bn and SEK 2.01bn and SEK 1,283bn respectively.
Nortrop Grumman exceeded market expectations for the fifth consecutive quarter and delivered very strong earnings per share during the third quarter. Despite this, Northrop Grumman performed negatively in October with - 5.79 %. We believe that Northrop Grumman is in a very strong position to take advantage of rising defense and space spending, and sees the decline in October as a consolidation after a strong period. Northrop Grumman is one of the GDS Fund's largest holdings. Thales, Boeing, Viasat and Science Applications International were the companies in the fund that had the worst development during the month. Boeing had higher revenue than expected during the quarter, but earnings per share were worse than expected. In addition to the ongoing 737 Max problems, the company has also had some challenges with deliveries on the defense side. We remain positive to Boeing. There is tremendous pressure on the company to resolve ongoing issues and it is obvious that this is the top priority for both the company and the US government.
