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NESTOR Europe - Quarterly Report 3/2020

Swedish bites taste good to NESTOR Europa

Fund rises strongly while the benchmark index stagnates

With an increase of +12.13% (V class), the NESTOR Europa fund performed very well in the third quarter, while the benchmark index only stagnated (MSCI Europe TR -0.07%). This turned the underperformance of the first half of 2020 into a significant outperformance of +8.85% (YTD -6.18%, MSCI Europe YTD -15.03%).

Sweden shakes off corona pandemic
While many countries are currently "testing themselves to the risk area" and the explosion in corona testing is leading to high "infection rates" (a positive PCR test is by no means equivalent to an infection or disease! With deaths in Sweden also remaining close to zero for the past two months, the success of the Swedish special route seems to be increasingly evident. Our numerous "Sweden Bites" therefore delighted our investors with a very good performance. This applies in particular to Knowit, Softronic, Fenix Outdoor, Thule, New Wave and Balco.

Corona ideas are paying off
As previously reported, we had to immediately review the impact of the corona pandemic on consumer and investment behaviour in spring.  We identified positive prospects in particular for DIY stores (Hornbach Holding), mobile homes (Kabe, Trigano) and in the leisure and outdoor segment (Thule, Fenix Outdoor). The conclusions drawn have proved to be valuable. The registration figures for motorhomes are rising steeply and DIY stores are also booming at the moment. The purchase of Hornbach Holding shares has so far resulted in a price gain of around 130%. On the other hand, we have not been involved in speculation regarding a Covid-19 vaccine, as viruses mutate very quickly.

Fund provider Ökoworld AG with another profit explosion
We had already pointed out the special position of Ökoworld AG in the fourth quarter, as we expected a considerable increase in net income in 2019 due to the constantly high inflows into the fund and high performance fees. And indeed, the net profit increased by around 187%, so that our expectations were even exceeded. In the first half of 2020, the company achieved another 200% profit explosion, which further boosted the share price. We remain committed to the company and expect a very positive environment for sustainable investments in the coming years.

Outlook
Due to the special situation in 2020, economic and stock market forecasts are currently subject to a special "corona reservation". In principle, many parameters point to a significant recovery of the economy, but many uncertainties remain due to the coming flu season. The presumably high volatility should therefore bring opportunities and risks again. Therefore, there are numerous sectors around which we are currently still keeping a wide berth. However, these sectors should offer enormous opportunities when the time comes.

Dirk Stöwer, Kontor Stöwer Asset Management GmbH