Busy And Useful

(OMX Stockholm, Mid-cap, SVOL B)

On many occasions historically, investment companies have fallen harder and earlier than average when the stock market has declined, but have had a better recovery when the stock market has been doing well. That has not been the case recently, and no rule without exception I suppose. This week, at least, many investment companies had a really good day, with most outperforming the index. There is also a reason why Svolder did particularly well.

Svolder focuses on investments in small Swedish companies. Even though they are smaller companies, many of the holdings are familiar to us, such as New Wave (brand clothing, among others), Scandic (hotels) and FM Mattson (faucet).

The development in Svolder over the past 3 years has been really bad. In addition to being overtaken by the Stockholm Stock Exchange’s broad index (SIXRX), it has also failed to outperform its benchmark index, which is Carnegie Small Cap (CSRXSE). However, if we calculate over a 10-year period, the index has been crushed.

Some things I take with me, reflect on:

• So far this year, Svolder has risen 12% (including this week). The Stockholm Stock Exchange’s broad index (SIXRX) is up just over 9%. The train may have already turned.
• We will hopefully see a better economy next year, which should benefit small companies.
• Their portfolio currently consists of 20 companies. One of Svolder’s rules states that the portfolio should consist of 15 – 25 companies.
• You are also an active and large owner in the companies. For example, you are the largest owner in 10 of these current 20 companies.
• Svolder’s discount and premium fluctuate quite significantly. At its highest, the premium was 18% and today it is 3.2%.
• Since 2013, Svolder’s dividend growth has averaged 17% annually. That’s certainly not bad. Also, consider that the share is trading at a yield of just over 3%.

Svolder’s dividend. It has grown significantly since the dividend policy was changed.

I certainly agree that Svolder is worth buying today. If we get a better 2026 for small companies, this will be gold.