Funds holding core Sweden equity could be hit by the strong SEK, according to comments from Sandvik, which has blamed the currency for a collapse in its latest quarterly earnings.
Funds holding core Sweden equity could be hit by the strong SEK, according to comments from Sandvik, which has blamed the currency for a collapse in its latest quarterly earnings.
The company that makes specialist tools and alloys for mining, forestry and other industrial users. It reported that orders were down -18% on the same period a year ago, with operating profit down -33%, and profit down -41% in its latest interim quarterly results statement.
“Earnings were negatively impacted by changed exchange rates and continued low production levels and operating profit thus amounted to 2,557 million SEK or 11.6% of invoiced sales. Return on capital employed was 17.6% (16.6) for the most recent 12-month period,” the company reported.
The results will predominantly affect Sweden large cap active funds, Sweden and European index funds, and pension funds. According to data from FE there are some 34 funds affected with a number having more than 2%, 3%, 4% or even above 7% of their portfolio in the stock.
The turnaround in Sandvik’s fortunes could therefore significantly affect their own. Those portfolios with a three-year performance record have managed at least a 15% return, rebased in euros.
However, over the past month, it is clear that funds with a focus on industrial stocks have suffered the step away from risk that has been noted in stock markets, particularly with regard to areas that might be affected by any slowdown in faster growing emerging markets – key ones for Sandvik, whose products are used, for example, in mining operations globally.
The best performing fund over the month to 22 April was the Schroder European – which has a 2.7% exposure to Sandvik. The worst performance came from the index funds. The Lyxor Stoxx Europe 600 Industrial Goods & Services lost over 5% over the past month. It has a 2.2% exposure to the stock.
The data also shows that Swedish large cap funds suffered significant monthly falls too, in many cases more than 4%.
The Carnegie Swedish Large Cap has a 5.3% exposure. It lost -4.46% over the period.
The Nordea 1 Swedish Equity has a 5.77% exposure. It shed -4.34%.
And the SEB 3 Ethical Sweden lost -4.21%. It has a 4% exposure.
| Fund | Performance 1m % | 3yr % |
| Schroder European I Acc Gross TR in EU | -1.23 | 30.12 |
| Skandia Schroder European in EU | -1.87 | |
| Swedbank Robur Talenten Aktiefond MEGA TR in EU | -1.88 | 35.29 |
| Swedbank Robur Aktiefond Pension TR in EU | -1.93 | 29.77 |
| Swedbank Robur IP Aktiefond TR in EU | -1.96 | 26.06 |
| Swedbank Robur Allemansfond IV TR in EU | -1.97 | 26.48 |
| Swedbank Robur Kapitalinvest TR in EU | -2.02 | 25.08 |
| Swedbank Robur Ethica Sverige Global TR in EU | -2.17 | 29.31 |
| Skandia Schroder European Pn Gross TR in EU | -2.52 | |
| Schroder International Alpha Inv TR in EU | -2.88 | 18.22 |
| Old Mutual Swedish Growth A SEK in EU | -3.12 | 35.99 |
| Carnegie Nordic Markets 1A USD in EU | -3.17 | 15.88 |
| SEB Sverige Index A SEK TR in EU | -3.18 | 34.48 |
| Swedbank Robur Svensk Aktieportfolj TR in EU | -3.20 | 32.21 |
| Schroder ISF European Large Cap A Acc NAV EUR in EU | -3.34 | 19.32 |
| Swedbank Robur Indexfond Sverige TR in EU | -3.37 | 36.50 |
| Danske Sweden A in EU | -3.44 | 30.18 |
| FPI Lannebo Sverige in EU | -3.55 | 27.67 |
| Global X FTSE Nordic Region TR in EU | -3.59 | |
| Old Mutual Swedish Equity A SEK in EU | -3.66 | 22.83 |
| Swedbank Robur Ethica Sverige MEGA TR in EU | -3.77 | 32.55 |
| Dexia Equities B Nordic C Cap in EU | -3.86 | 18.51 |
| Swedbank Robur Sverigefond MEGA TR in EU | -3.89 | 34.05 |
| Swedbank Robur Sverigefond TR in EU | -3.99 | 30.87 |
| Swedbank Robur Exportfond TR in EU | -4.06 | 24.31 |
| SSgA Sweden Index Equity P SEK in EU | -4.11 | 33.88 |
| iShares MSCI Sweden Index TR in EU | -4.19 | 33.56 |
| Lannebo Sverige TR in EU | -4.21 | 29.57 |
| SEB 3 Ethical Sweden Dis SEK TR in EU | -4.21 | 28.45 |
| Lannebo Sverige 130/30 TR in EU | -4.28 | 32.47 |
| Nordea 1 Swedish Equity BP SEK in EU | -4.34 | 18.37 |
| Carnegie Swedish Large Cap in EU | -4.46 | 27.68 |
| ComStage DJ STOXX 600 Industrial Goods & Services in EU | -5.03 | 32.90 |
| Lyxor STOXX Europe 600 Industrial Goods & Services TR in EU | -5.05 | 32.65 |
Source: FE, data to 22 April 2013, rebased in euros
