We are now closing our fifth year of operations and looking back on another eventful year. A warm thank you to all you shareholders for the trust in managing a part of your investments. This responsibility weighs heavily, and we take the task very seriously. Even though 2023 ended with positive value development and a strong underlying performance for the companies in the portfolios, we are not satisfied with the result for TIN New Technology. TIN World Tech had, in our view, an acceptable development, in line with the performance development of the portfolio’s holdings.

The year 2023 ended strongly. In December, the sentiment further improved, both globally and here in the Nordics. This followed a uniquely weak market mood during the autumn, driven by economic and interest rate concerns. The anxiety was further exacerbated by intensified geopolitical tensions and conflicts. Nordic stocks continued to perform worse than global ones, especially American innovative companies, until the turnaround at the end of October. Among American companies, we specifically refer to the so-called 'magnificent seven,' which accounted for the majority of the rise in the S&P 500 last year.

It has been almost impossible to know when the turnaround would come. That it would eventually happen was almost obvious, as the stock market’s natural direction is upwards. Entrepreneurship is fundamentally about creating value, and the stock market gathers many of the most capable companies. Innovation and productivity are perhaps the strongest driving forces for value creation in companies and over time, this should naturally be reflected in stock prices. This time too, the market followed its historical pattern of how a turnaround can occur. The stock market is forward-looking and tends to climb a wall of worry. Good profit development and low valuations are not always sufficient. The market often needs an external impulse to start viewing life in a brighter light.

The bond market has been central to investors' view of stocks, both when rates are rising (which we saw from 2021 to 2023) and currently, as they are trending downward. Globally, inflation seems to be on track to stabilize, and the bond market is moving in the same direction. Moreover, the U.S. dollar – itself an important sentiment indicator we discussed in last month’s newsletter – has clearly weakened, which is a sign of increasing risk appetite in the market

The companies in the sectors we have chosen to prioritize have continued to deliver good results in terms of growth, profitability, and cash flows. Value creation has increased while the valuations, despite the rise we have seen in November and December, still remain clearly below a historical average. Our focus in management has continued to be on companies with proven ability for growth combined with profitability and cash flow generation. TIN New Technology has added a new holding, Nordic Semiconductor, while about a dozen companies have left the portfolio during the year. TIN World Tech has added three holdings: Nvidia, Nordic Semiconductor, and Adyen, while we have divested five companies.

How sustainable are the companies' profits? This remains perhaps the most important question for the coming years, especially in light of a potentially weakened economy. A stronger krona could also negatively impact the companies' reported earnings, even if the positive effect on sentiment might be stronger. We have previously noted that innovative companies do not operate in a vacuum, and even structurally growing businesses can be affected, not least if consumers' spending power is eroded by electricity prices, interest rates, and/or general inflation. Companies selling digital consumer services are not unaffected, but are more resilient than many traditional consumer-driven businesses.

Digitalization continues, and a response for companies facing challenges might be to try to further streamline their operations. New tools driven by developments in artificial intelligence have been broadly introduced. Here, we have really only seen the beginning of a long development that will drive productivity across many parts of both industry and society at large. Not least, skilled software companies will be able to greatly benefit from these trends. The health sector continues to see relatively non-cyclical, structural growth. We look forward to 2024 with strong optimism and see great opportunities in our investment universe

Finally, we would like to remind you of our annual investor meeting on January 16, 2024, at 6:00 PM, at SPACE. Evolution's CEO Martin Carlesund and Fractal Gaming's CEO Hannes Wallin will grace the evening along with moderator Matilda Karlsson from Pareto. The number of spots is limited, please register as soon as possible.

TIN New Technology
Last month, the share value increased by 7.2 percent. During the same period, the value development for the broader comparison index for Nordic small companies, VINCSCN, was +7.5 percent. Over the course of 2023, the fund has increased by 4.0 percent, compared to +9.1 percent for the index. Since the fund's inception on February 4, 2019, the fund has risen 47.3 percent, while the index has increased 63.4 percent. The three largest holdings in the fund at the end of the month were Evolution, Novo Nordisk, and Surgical Science. For a list of the top ten holdings, see tinfonder.se/holdings-tnt/.

The holdings that contributed the most to the return during the month are Evolution, Sectra, and Embracer. Among the holdings that negatively affected performance during the month, we find Novo Nordisk, Nemetschek, and Biogaia. The fund's largest segment is Software, which accounts for 33 percent of managed capital, followed by Health at 32 percent, and Digital Brands at 20 percent.

The holdings that contributed most to the return during the year were Novo Nordisk, Evolution, and Take-Two Interactive. Among the holdings that negatively affected performance, we find Chemometec, Embracer, and Cint. During the year, there were bids for two companies in the portfolio. Meltwater was acquired by Altor. Founder Jörn Lyseggen joined in the private setting, to the detriment of the minority in the company. Adevinta was bought by a consortium led by Blackstone and Permira. Here too, former major owners Schibsted and eBay were involved and appear to remain owners in the private setting.

TIN World Tech
Last month, the share value increased by 5.2 percent. During the same period, the value development for the broader comparison index MSCI World was +2.4 percent. Over the course of 2023, the fund has increased by 20.8 percent, compared to +19.9 percent for the index. Since the fund's inception on June 12, 2020, the fund has risen by 26.4 percent, while the index has increased by 67.6 percent. The three largest holdings in the fund at the end of the month were Microsoft, Salesforce, and Nintendo. For a list of the top ten holdings, see tinfonder.se/holdings-twt/.

The holdings that contributed most to the return during the month were Unity Software, Straumann, and Nordic Semiconductor. Among the holdings that negatively affected performance, we find Microsoft, Adobe, and Nemetschek. The fund's largest segment is Software, which accounts for 54 percent of managed capital, followed by Health at 21 percent, and Digital Brands at 14 percent.

The holdings that contributed most to the return during the year were Salesforce, Microsoft, and Adobe. Among the holdings that negatively affected performance, we find Solaredge, Embracer, and Enphase. During the year, there were bids for three companies in the fund. Like TIN New Technology, the fund was an owner in Meltwater and Adevinta. Additionally, a smaller holding, Pushpay, was bought out from the Australian stock market in the spring.