October: weak tech month weighed on results

Inge Heydorn

Thyra Hedge Fund lost 0.9 percent in October, which was better than the Nasdaq Composite Index which fell 2.4 percent during the period. Since the beginning of the year, the increase totals 3.9 percent. The month was turbulent in the stock market, where risk appetite declined markedly towards the end of the month, which translated into a broad case for technology-related companies. This is despite the fact that the reports presented were generally better than expected. Of the S&P companies that had reported at the end of the month, 88 percent had met expectations.

Above all, we have seen major battles between Work From Home (WFH) stocks and stocks benefiting from a recovery in the economy in recent weeks and this has continued into November. Our gaming stocks have the largest exposure to WFH while semiconductor equipment companies have the largest exposure to recovery.

Of the fund's holdings, the positions in Activision, ASML, Zynga, Ubisoft and Microsoft weighed heavily. Among the winners were Sony, KLA, Tencor, TSMC, Servicenow and LAM Research.

At the end of the month, the net exposure in the fund was 16 percent, of which beta-adjusted around 0 percent. During the month, the fund increased its position in Zynga and initiated a position in Paradox Interactive.

Going forward, it will continue to be about how much the WFH exposure portfolio should have relative to recovery stocks. The companies we own continue to deliver in both scenarios, we believe.

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