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Helmet company and home improvement chain spearhead growth at Spiltan's small cap fund

The Swedish small cap fund of Spiltan Fonder has outperformed the benchmark this year. The portfolio manager recommends companies with strong structural growth.

Investing in home improvement chain BHG has been succesful for Spiltan's small cap fund. Photo: BHG/PR

Swedish fund company Spiltan Fonder has made a success out of its small cap fund this year. So far the small cap fund, formerly named Spiltan Aktiefond Sverige, is up almost 25 percent whereas the benchmark index Carnegie Small Cap Return Index shows a rise of almost 5 percent, reports Swedish business daily Dagens Industri.

The success of the small cap fund is mainly based on two high flying equities – building material and home improvement company BHG, formerly Bygghemma, and bike and snow helmet company Mips -- after increases of 82 percent and 89 percent, respectively this year.

BHG changed its brand and launched an updated corporate identity in the midst of pandemic crisis April. The company aims to develop from a local Swedish DIY e-commerce firm to a more pan-European home improvement chain.

The winning recipe of Spiltan's small cap fund has been holdings in companies with structural growth, which have been heavily rewarded at the Stockholm stock exchange, DI writes.

"You should look for companies that perform well, regardless of whether we have a pandemic or a recession," says Spiltan portfolio manager Pär Andersson.

"We try to balance the portfolio as best we can. We are looking for companies we believe in long-term and preferably not too cyclical. Periodically, they may not do well, but if you have done your homework, they usually show good returns over time," he explains.

Several companies in the small cap fund portfolio have benefited from the ongoing pandemic crisis, but Pär Andersson notes they performed well even before the pandemic and believes the success continues.

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