With a gain of 36.10% (V share class), the NESTOR Europa Fund outperformed in 2021, while the benchmark MSCI Europe TR also gained a remarkable 25.65%. This put European equities in the top group worldwide in 2021.
The annual return over the 5-year period is 14.16% compared to 9.14% for MSCI Europe TR, so the fund's excess return is a good 5% per year.
AP Moeller Maersk - profit of only 2 years equals approx. 46% of the total market value of the company
Like the steel sector, "Christian shipping" has often proved to be a bottomless pit for investors. But when the going gets good, the going gets good. This situation is particularly true of the container sector at the moment. Following the explosion in container freight rates, profit expectations for market leader AP Moeller Maersk currently stand at a total after-tax profit of around DKK 200 billion, based on 2021 and 2022. This sum is roughly equivalent to 46% of the market capitalisation of around DKK 431 billion. Although we rarely buy capital-intensive cyclicals, we had acquired a notable position last year due to the changing competitive parameters in the sector. In the meantime, we are up a good 82% on the stock and still see potential.
CRAFT - A fantastic development!
Although many companies in the NESTOR Europe Fund 2021 have performed excellently, I would like to highlight CRAFT, a sports brand of the New Wave Group AB from Sweden. Pre-orders from retail customers for spring 2022 have increased by an average of 65% compared to 2021. 2021 was already a good year, so the increase compared to 2020 is even 110%. Craft has proven in teamwear & club and in footwear development that they can succeed quickly in new segments. Today they are growing significantly in all sports, especially football. The spring collection has now been launched at the retail chain Fleet Feet in the USA. The fact that they are able to gain a foothold in the American market is very pleasing! The brand, or rather the parent company New Wave Group AB, obviously has many years of profitable growth ahead of it and is a "value builder" in our book. In 2021, the New Wave share gained more than 200%, but with a P/E ratio of 22 of approx. 13.5 (e), it is by no means overvalued in our view.
Combined stock & sector picking
In principle, we act as stock pickers, but in recent years some sectors have proved to be particularly fruitful, so that we prefer to keep a lookout here. In addition, sector-specific opportunities arise in certain market phases. These are usually represented by 2 to 3 of the most lucrative companies. The most important positions at the beginning of 2022 are as follows:
DIY stores: Hornbach (D), Byggmax (SWE).
Healthcare: Prim (ES), Clinica Baviera (ES)
Logistics: AP Moeller Maersk (DK), Eurokai (D), Logwin (D)
Luxury goods: Moncler (I), Kering (F)
Building suppliers: Rockwool (DK), Sto (D), H+H International (DK)
IT Infrastructure: Softronic (SWE), Knowit (SWE)
Leisure & Sporting Goods: Adidas (D), Puma (D), New Wave (SWE), Fenix Outdoor (SWE)
Motorhomes: Trigano (F), Kabe (SWE)
Finance: Ökoworld (D), Talanx (D), Mapfre (ES), Euronext (NL)
Technology: SAP (D), Sinch (SWE), Asetek (DK)
Services: Amadeus Fire (D), Semcon (SWE)
Special-Retail: Asos (GB), Kamux (FIN), KID (NO), Jumbo (GR)
Sweden - The place to be
When it comes to containing pandemics caused by cold viruses, one thing is a bitter truth: by mutating so quickly, you are always running behind the disease. In the case of the Corona vaccine, there is another problem. The vaccines do not lead to sterile immunity, but are only intended to protect against a severe course. As is well known, Sweden had taken the path of the "controlled offensive" and allowed widespread natural penetration. According to the initial findings of this year's cold season, Sweden now has by far the lowest number of deaths among the western industrialised nations, although there are currently a great many positive test results. If the Swedish path of natural herd immunity continues to prove its worth, the country would have achieved an enormous success in terms of avoiding collateral health and economic damage. For us, the country remains "the place to be".
Outlook
This year, we believe we have again assembled a portfolio that offers a particularly attractive risk/reward profile. However, the tailwind from falling risk spreads should be less than in previous years. As central banks are also tending to become more restrictive, equity returns are likely to be more modest. However, it should be possible to beat the "minus interest rates" benchmark better in the medium term with high-quality equity portfolios than with many other financial instruments.
Dirk Stöwer, Kontor Stöwer Asset Management GmbH