The I share class of the fund earned a net return of -6.1% in December versus a return on the MSCI World Index of -7.6%. This brings the net return over the year to -18.5% versus a return on the MSCI World Index of -12.8%.

Since its inception the fund has outperformed the benchmark (10.7% versus 9.4% for the MSCI World Index), including on a 3-year basis (6.9% versus 6.7% for the MSCI World Index).

The consumer discretionary, industrial and IT sectors made the largest positive contributions to the return, while the biggest negative contribution came from the communications sector. The allocation and selection effects were positive for the month.

Chr. Hansen, Novo Nordisk and Nike accounted for the largest positive contributions to the result. Chr. Hansen – a supplier of bacteria cultures – has announced plans to merge with Novozymes. Each Chr. Hansen share will be converted into approximately 1.5 Novozymes shares once the merger has been completed. As of the date of the announcement, this implied a premium of 49% for Chr. Hansen equities. We recognise the logic of combining Chr. Hansen’s microbe expertise with the enzyme expertise of Novozymes. The merger will create a world leader in biological solutions. The proposal still needs to be put to the shareholders of both companies for approval.

Sysco, Applied Materials and Alphabet made the biggest negative contributions to the result. US Big Tech (such as Apple, Amazon.com, Alphabet) lost ground in the fourth quarter due to worse-than-expected results and rising costs.

The fund invested in CME Group in December. CME Group operates a world-class derivative marketplace and offers a variety of futures and options products for risk management, including CBL Global Emissions Offset futures. Futures exchanges is an attractive sector, with little competition and extremely high entry barriers. CME is the clear market leader in the futures market, with a diversified product range containing growth potential. The company is able to set high prices and enjoys strong network effects. For example, CME has launched the industry’s first sustainable clearing service that enables businesses to track risk management activities used to hedge ESG initiatives.


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What kind of companies do we seek?
We seek profitable companies undergoing structural growth that will create shareholder value in the long term alongside a clear social mandate. The best results are achieved if the interests of all the stakeholders are aligned. This requires not only products and services but also operations to be in line with the wishes and requirements of society (licence to operate). Moreover, the companies need to have sufficient opportunities for growth to be able to invest at an attractive return (innovation and expansion). In order to sustain earnings growth over the long term, companies need to enjoy sustainable competitive advantages compared to existing and new competitors (strong strategic position).

The role of management
We expect management to pursue a long-term strategy in addition to conducting sound day-to-day management. The risks and opportunities relating to ESG need to be clearly incorporated, backed up by sensible investment plans that respond to long-term trends and match the company’s strategic positioning and growth opportunities.

Quality and valuation
We believe the selected companies are above-average quality in terms of strategy and operations and are capable of creating long-term value for all stakeholders. Depending on the absolute valuation of their equities, they could form an interesting long-term addition to the portfolio.