The month of May has been eventful, with everything from positive movements for precious metals to new holdings in the portfolio. More about this in AuAgTrends further down in this letter, where this month's macro theme is the strong momentum in the commodities market.

Some major news for the month is that our funds are now available at the Ålandsbanken and the SharingAlpha platform.

We have also signed an agreement with Sustainalytics to take our sustainability work to the next level. Sustainalytics is the market leader and has more than 25 years of experience in ESG (environmental, social, governance) research. This will help us in our company analysis and our work to promote sustainability aspects in the companies.

The launch of our new fund is approaching. The high-level plan is described in more detail under AuAg ESGO ETF on our website.

We like to share our knowledge and share links on Twitter/LinkedIn, so follow us to stay up to date. Also, keep an eye on the Library where we collect information and content that we like.

As always, we are grateful for the trust we receive from all investors - the joint journey has just begun!

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Click on the logo to get to the respective fund page. There you can see, among other things: how to invest, the new fund sheets, and live ticker price on the holdings.


The Theme of the Month: Strong momentum in the commodities sector

In April month's newsletter, the theme was "Taxes & Inflation", which proved to be a hot topic during the past month. The US Consumer Price Index (CPI), which measures a basket of goods and includes energy and housing-related costs, showed the highest monthly growth rate since September 2008. The expectations for April were 0.2 per cent, but the increase turned out to be 0.8 per cent instead. This is likely to affect the continued investment climate going forward.

Rising price inflation has become a bit of a concern for the market lately. Through its expansionary monetary policy, the Fed has gradually managed to paint itself into a corner. They are now trying to communicate that we see short-term and transitory inflationary tendencies (what else are they going to say?). All to maintain confidence from the market and create a feeling that they have control over the situation.

In the commodities sector, the trend continues with higher prices. During May, e.g. the price of wheat and corn reached new nine-year highs, and both iron ore and steel, along with many other commodities, reached new all-time high levels. Of even higher significance was the copper price that noted a new all-time high and took out the previous record level from 2011. The similarities then versus now is that the copper price, even ten years ago, was a leading indicator for an upcoming price rally in silver.

Although copper and silver are two very different metals, they are nevertheless very similar because both are irreplaceable in the world we live in today. When it comes to electrical conductivity, copper is often used as a standard (IACS) with a conductivity value of 100%. The conductivity of other metals is then compared relative to this number. Only silver conducts electricity better than copper, with a value of 105%. These metals are essential in thousands of products, e.g. solar panels and electric vehicles. Silver and copper are thus the "real gold" that enables the transformation into a green world.

Short About the Funds

The fund AuAg Silver Bullet B ended May with a positive return of 17.82 per cent. The NAV price is now 17.59, which is the highest monthly close since the fund's launch just over 1.5 years ago. A significant reason behind this is that gold has regained the price level of 1,900 USD. Gold hit its lowest price level and gathered strength around 1,680 USD and has been preparing for a rise since then. We have now resumed the journey towards higher prices and will eventually reach last summer's all-time high level of around 2,070 USD. Silver continues to show relative strength, and the month of May resulted in the highest monthly closure in ten months just below 28 USD. This has benefited the companies in the fund, where each per cent increase in underlying commodities creates leverage on the company's future profits. For more information about the fund, see the website and fund sheets.

The return of AuAg Precious Green B was close to unchanged in May with plus 0.16 per cent. Higher inflation expectations continue to pressure many of the green-tech companies that are valued and priced based on future profits. The sector had a sensationally strong upswing during the autumn until the beginning of February, when several companies surged by hundreds of per cent. These companies have now given back some of their previous returns and rebounded sharply in recent months. Despite this, the fund has had a relatively stable development with a positive return for the year, highlighting the importance of diversifying between different asset classes and balancing up volatile companies with a real asset such as gold. For more information about the fund, see the website and fund sheets.

During the past month, we added a new holding in AuAg Precious Green. QuantumScape (QS:US), founded in 2010, is developing the lithium batteries (solid-state/glass batteries) of the future. The goal is to improve the properties of batteries in terms of energy density, charging time, service life, safety, and cost. The knowledge of Volkswagen and Bill Gates being large investors caused the company's share price to soar with the listing in November last year. However, the share price has since then dropped down to a more reasonable level, and we see this as a good opportunity to invest. QuantumScape replaced Panasonic within the sub-strategy "energy storage". The holding is volatile, which means that it suits a well-diversified fund such as AuAg Precious Green.

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