Following a strong autumn and a positive start to the year, global equity markets were dominated in March by geopolitical concerns against the backdrop of the conflict between the US and Iran. The MSCI World Index fell by 5.63%, whilst the European STOXX Europe 600 was down 8.00%. The US S&P 500 fell by 5.09%, whilst the Swedish OMXS30 fell by 9.10%. In March, equity markets were influenced more by geopolitical factors than by company-specific news.
From a longer-term perspective, it is clear that both companies and equity markets have demonstrated a strong ability to cope with periods of geopolitical unrest. Previous conflicts, including wars in the Middle East, have often led to an initial negative reaction in the stock markets, followed by a relatively rapid stabilisation as uncertainty subsides. Recent developments have also contributed to valuations in certain companies becoming more attractive, creating interesting entry points for long-term investors. This is in line with our investment philosophy, where temporary market movements can create opportunities to increase exposure to companies with sustainable earnings growth.
The macroeconomic picture has shifted slightly during the month. Inflation expectations have been revised upwards, due to rising energy prices. The USD has strengthened, which affects companies with global exposure. During the month, new and expanded free trade agreements have been signed between Europe and, among others, India and Australia, which in the long term will contribute to increased trade flows and new business opportunities.
To put the current situation into perspective, it may be useful to reflect on the past six years. During this period, the stock markets and companies have navigated a pandemic, with the stock market initially falling in 2020 before recovering to end the year in positive territory. This was followed by a period of higher inflation, rising freight costs and a shortage of semiconductors, which affected parts of industry. When inflation subsequently fell, central banks cut interest rates, which helped to stabilise the economy. A year ago, in connection with ‘Liberation Day’ (Trump’s proposed tariffs), global stock markets fell, only to recover and end the full year 2025 in positive territory. Despite the period being marked by several significant disruptions, the stock markets have demonstrated a strong ability to recover. Overall, this underscores the strength and resilience of quality companies over time, even during periods of uncertainty.
As at 31 March 2026, our Nordic fund, NE Strategy, has received the highest rating of 5/5 for Consistent Return over 10 years and since inception, according to Lipper Leaders. As a confirmation of our strategy, our Nordic fund, NE Strategy, was named the best Nordic fund in Europe over the past five years by the rating agency Lipper in 2024. In spring 2025, the fund was also named the best Nordic fund by Lipper France, based on performance over a five-year period. These accolades reflect our investment approach, which focuses on long-term investment in high-quality companies.
Current geopolitical and macroeconomic changes point to a continued disciplined selection of high-quality companies with long-term competitiveness. We focus on companies with strong balance sheets, sustainable cash flows and a proven ability to translate structural trends into lasting profit growth. It is this type of sustainably profitable company that, over time, is best placed to generate stable and strong returns.
