LHV World Equities Fund

In March, the rise in equity markets continued, where the biggest jump was made by the commodity sector, banks, and other more economically cyclical stocks. The price of gold also made a significant rise, increasing by 9% over the month. The month was very positive for the fund. Fund unit value increased by 7.7%. The biggest gainers were the stocks of mining companies related to gold and copper. No trades occurred in the fund during the month. The most important commodity market movement for us in March was gold, which increased by 9% over the month. We have invested in the stocks of gold mining companies in a higher inflation environment. But gold mining stocks have lagged significantly physical gold gains over the past year. In March, we saw that the gold mining companies finally started to move. In the fund, Barrick Gold and Agnico Eagle Mines share prices rose by 13,7-24,3%. Among industrial metals, the price of copper rose by 4% over the month. Copper is the metal of electrification, benefiting from growing demand in the construction of grid, electric vehicles etc. The largest demand for copper comes from China, where the boom in electric vehicles and the construction of the electricity distribution network is increasing the demand for copper. This compensates for the decline in copper demand in Chinas construction market, which remains in a slump. In March, the stock prices of our copper mining companies, Freeport McMoran and the Global X Copper Miners ETF, rose by 18,1-24,5%. In the energy sector, the price of oil rose by 5% over the month. The increase in oil prices was supported by growing demand in the US, plans by the worlds largest oil company, Saudi Aramco, to reduce capital investments, and ongoing geopolitical tensions that have increased the distances for fuel transportation. We have acquired companies in the energy sector to our fund that trade at cheap price levels against their profits. The stocks of oil companies offer a return of nearly 10% through capital return alone, which is done through dividend payments and share buybacks. In March, the stock prices of Equinor, Occidental Petroleum and Valaris rose by 7,5-19,5%. We also saw a recovery in the stocks of US natural gas companies. Price gains in Nordic equities were smaller. Biggest contribution to fund unit value gain came from Metso and Stora Enso shares that increased 11,1-11,5%. Looking ahead, we see that stocks related to commodities continue to trade very cheaply against the profits they earn. We see interesting opportunities in the stocks of Nordic industrial companies, where the low point of the cycle has passed. The main area of risk we see is that the technology sector on the stock markets has become similar to the year 1999. It completely dominates the stock markets, and the big tech giants are a one-way bet, only on rising future. Mark Twain has correctly written about this risk: "Its not what we dont know that gets us into trouble, its what we know for sure that just aint so."