The Espiria Sweden Small Cap A fund decreased by 2.3 percent in February, underperforming its benchmark index which declined by 0.1 percent. Since the turn of the year, the fund has decreased by 0.4 percent, thereby outperforming the index which has fallen by 8.2 percent, according to a monthly report.

The managers initially noted that focus shifted toward new geopolitical threats after the Greenland issue appeared to be resolved. The conflict between the US/Israel and Iran was the most pressing concern, escalating into an outright war before the end of the month.

"In the economic sphere, the US Supreme Court's invalidation of tariffs, on the grounds that they exceeded presidential authority, was a factor that unsettled markets. Although new tariff threats from President Trump were announced immediately following the ruling, the economic effects appear likely to be extremely limited regardless of the outcome," the managers wrote.

Furthermore, extensive AI investments from hyperscalers such as Microsoft, Amazon, and Alphabet influenced market developments.

"The news flow has continued to revolve primarily around investments in AI and data centers. This year alone, the largest companies (the Magnificent 7 and others) are expected to invest over $650 billion, a doubling compared to last year."

The software sector was simultaneously pressured by new AI tools, including Claude from Anthropic, which is designed to facilitate tasks such as coding and data analysis.

Additionally, there are clear signs of a strengthening European economy, with increased industrial demand and rising pulp prices. Consumption is expected to gradually pick up during the year as purchasing power increases due to low inflation and rising real wages, the managers noted.

"So far, the economic recovery remains on track, despite the flare-up of war in the Middle East and its potential effects on the real economy. Corporate outlooks presented alongside the 2025 annual figures are also mostly positive, albeit expressed in cautious terms."

Regarding Swedish small caps, they have continued to perform more weakly than large caps, with outflows from small-cap funds cited as one explanation.

The fund's largest holdings at the end of the month were Getinge, Alligo, and SKF, with portfolio weights of 7.6, 7.0, and 4.4 percent, respectively. The largest sectors were healthcare, consumer discretionary, and industrials.

Espiria Sweden Small Cap A, %February, 2026
Fund M/M, change in percent-2.3
Index M/M, change in percent-0.1
Fund YTD, change in percent-0.4
Index YTD, change in percent-8.2