September was again a good month for the GDS fund with a return of 1.0 percent. Since its inception, the fund has recorded an increase of almost 15 percent, which is better than its benchmark index and more than double the Swedish OMX index. At the same time, the fund has shown a lower risk, measured as annual standard deviation, compared to both benchmark indices and Swedish equities.
Hewlett Packard (HPE), the highest performing company of the month, rose by almost 10 percent. In September, HPE completed the acquisition of Cray. Cray's goal is to build the most powerful computer in the world. The company has succeeded well and today counts the US state as its largest customer. The integration of Cray into HPE will improve the future offering of storage, software and services in high-performance computer and AI products. HPE announced in August that a collaboration with NASA has begun to build a new supercomputer. The computer will be used by the Ames Research Center to develop models and simulations of landing processes. According to a report by Grand View Research, the 'high-performance computing' market is projected to grow by 7.2 percent per year between 2018 and 2025, reaching close to $ 60 billion by 2025.
A lot happens in high-performance computing. In September, Google announced that their researchers, using a quantum computer, were able to perform a calculation of just over three minutes, which would take 10,000 years for the most powerful computer. Although no one today knows exactly what such breakthroughs will mean, we can see that technological development is continuing at an ever-increasing rate. Companies in the security sector that are at the forefront of technology will have enormous opportunities going forward.
The Norwegian Kongsberg Group (KOG) had a fantastic month and was up 9.4 percent. KOG has won many contracts recently, including a strategically important contract with NASA and Space Norway. Other companies that performed well in September were Textron and Flir - up 8.8 percent and 6.7 percent. The market is also starting to appreciate the previously announced merger between Raytheon and United Technologies, which resulted in nice increases for the companies of 6.1 and 4.8 percent, respectively. Boeing had another strong month and was up about five percent.
Holdings with poorer performance during the month were Booz Allen, Airbus, Viasat, General Dynamics and Leidos. We believe in the companies in the long term and have therefore taken advantage of the decline and increased holdings in General Dynamics and Viasat.
See the monthly report for the GDS Fund below:
