A successful first year for Fondita European Micro Cap!

2018-03-12

The fund's return has since start been approximately +25%, driven by good development in the fund's investments. According to fund manager Kenneth Blomqvist a number of the fund’s investments have during the year shown a clearly stronger profit growth than expected, as a result of greater demand for the company's products combined with internal efficiency measures that have now begun to bear fruit. We can also see that numerous of the fund's companies work with tomorrow's technologies in industrial technology, digital services and medical technology that support trends that we perceive as long term.

The fund's best contributor has been the Austrian industrial software company S & T , whose growth is driven by the increasing demand for production automation, digitalization in manufacturing and security solutions since the world is becoming increasingly more digital. The company's acquisition of its German competitor has been proved successful since it has succeeded in expanding the product range and customer base. The family-owned power tool manufacturer Einhell Germany is also one of the fund's best contributor, the success is driven by a clear improvement in underlying profitability combined with an accelerating growth. Selling "German quality at a lower price" has proved to be a successful strategy on the company's main markets in Central Europe and Australia.

After updating prospects twice in a short period of time for 2017 and 2018, German UV technology company Dr Hoenle was also one of the fund's best contributors. The company is a global leader in their niches and their technology is used in a number of industrial solutions. This gives the customers the opportunity to streamline the production as well as enhance the quality. Since these companies continue to increase market shares, we still find them highly interesting in the upcoming years. We are continuously looking for interesting companies for the long-term that work with tomorrow's technologies, Kenneth Blomqvist states. 

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