LHV World Equities Fund

Markets continued to go up in November which was driven by talks of the potential trade deal between the US and China. LHV World Equities Fund unit value increased 3% with the month. Our best performing single stocks were Siemens Healthineers and Alibaba, which both reported better than expected quarterly results. Most of the fund’s other positions also gained during the month. Positive developments in macro came from China and Europe, where a long slump in industrial production showed first signs of stabilization. Both equity markets have many undervalued opportunities should the economic growth recover. In November, the ECB restarted their quantitative easing program. We do not expect the money supply growth to affect the real economy very much but for financial markets the high liquidity environment has usually had a positive effect. Recovery in the European economic growth depends also when fiscally sound governments start to spend again. A notable change took place in Germany where the Social Democrats held elections for party leadership and the new leaders are leftists who are eager to increase infrastructure spending. It would certainly bring some new life to the European economy if these policies should go into work.  Currently we continue to look for undervalued investment opportunities from the European and Asian equity markets. In this year we have made new investments mostly into Nordic equities that offer dividend yields close to 4-5%. In November we sold Valmet equities and reduced Stora Enso and UPM Kymmene positions. We also exited Japan and European banking sector index funds. At the same time we added TCM Group, Coor and Swedbank equities.