Read the February monthly reports

Read the February monthly reports below:

• CB European Quality Fund – February 2025
• CB Save Earth Fund – February 2025

Our thougts on Europe

There is a highly tense atmosphere on both sides of the Atlantic. Virtually all European leaders are expressing their strong and unconditional support for Ukraine, while the Trump administration has voiced disappointment with Zelensky’s actions and approach – and has now paused its support.

Our role is not to promote political messages in any direction but rather to adjust our portfolios in line with our investment criteria and what we assess to be favorable based on political developments. Our forecast indicates a strong likelihood of some form of peace in Ukraine in 2025. Both the stock market and the betting market are also signaling a possible peace agreement in 2025, as reflected in the strong rally in Europe during January and February, particularly in heavy industry and construction (which has not benefited CB European Quality Fund). However, there will be volatility following Friday’s diplomatic setback and the U.S. decision to pause military aid.

What a potential peace agreement might entail and what it would mean for Ukraine is, of course, impossible to predict at this stage. However, regardless of its specifics, such an agreement would mark the beginning of Ukraine’s reconstruction and significant investments in the defense industry and Europe’s industrial base. This could lead to a substantial increase in industrial activity across Europe, including Sweden. A positive side effect of increased European engagement could also be that the EU has less influence and fewer incentives to introduce new regulations that hinder growth. Meanwhile, European equities are currently at an all-time low in valuation relative to U.S. equities, following 17 years of underperformance (see charts below).

Admittedly, the entire process could take time, but that does not change the ultimate outcome. This positive impact on economic activity in Europe is not short-term but could persist over an extended period.

To adapt to this new reality, we have increased CB Save Earth Fund’s exposure to Europe, particularly in more cyclical Industrials, and Materials. Similarly, we have increased CB European Quality Fund’s exposure to insurance companies, more cyclical Industrials, and Materials. In both funds, we have also increased exposure to the German stock market.

Team CB Fonder