The conflict in Ukraine continues to have a negative impact on the real economy and also threatens food supplies in the third world, which could lead to catastrophic consequences and which could thus lead to an intensified and more extensive conflict in which Western countries feel the need to act. The conflict in Ukraine may be protracted and we are likely to face a new geopolitical situation in Europe in the long term. It is clear that Western European countries will greatly increase their defense appropriations and this will affect the defense industry and companies operating in the sector. The average increase in defense funding in European countries is 75 %.
We are also following developments around Taiwan and increased tensions between the United States and China, where the degree of influence is significantly more extensive than the conflict with Russia may lead to.
The geopolitical situation with increased tensions between the West, Russia and China also means that hybrid warfare is likely to increase with lower thresholds for industrial espionage, influence, misinformation and sabotage of various kinds. As a result, large investments will be made in cybersecurity by both commercial companies and governments. When a company of Microsoft's dignity goes out and emphasizes the importance of being exposed to the growth in the cybersecurity sector, it is understood that the growth will be significant and global.
We work actively to ensure that the fund is exposed to the growth conditions set out above. The fund has begun a reallocation that has a clearer weight against defense companies and decreased against IT companies as a result. As previously stated, the fund wants clear exposure to growth in cybersecurity.
From a macro perspective, inflation is the big cloud of concern with rising interest rates as a result. Inflation in the US was 8.6 % per latest inflation report, which is the highest figure in 40 years. The fund has greater exposure to value companies than growth and hope companies, which can be important when inflation is rising.