Kavaljer Quality Focus June 2026 - Valuation gap between large and small companies at a record high

2026-07-03 17:00:00

Sharp discrepancies across the market – AI and Large Cap in demand
June was marked by sharp discrepancies between different segments of the market. Small and Mid Cap performed weakly, while Large Cap and AI-related companies continued to show strength. The valuation gap between large and small companies is now at a record high, even though the reverse has historically been true - a dynamic we believe benefits long-term investors in companies with solid earnings growth and low starting valuations.

A closer look at our holdings
This month's deep dive covers three of the fund's holdings: Brodrene A&O Johansen, Denmark's leading HVAC and plumbing wholesaler, trading at an attractive valuation despite a strong market position; ITAB Group, where a realistic synergy outlook and a strengthened balance sheet support a re-rating; and Pandora, which, following a strong recovery, we continue to view as attractively valued ahead of upcoming margin improvements.

Read the full monthly letter in the attached file.

Disclaimer
Historical performance is no guarantee of future returns. The value of an investment in the fund may both increase and decrease, and it is not certain that you will get back the full amount invested. For more information about the fund, please see the fund’s factsheet at kavaljer.se/en/.

This publication is addressed to clients and other stakeholders of Kavaljer AB (Kavaljer). The information is based on Kavaljer’s own assessments at the time of publication as well as on other sources. However, Kavaljer cannot guarantee that the information from these sources is correct, and the assessments are based on factors that may prove to be inaccurate. Anyone reading the information should be aware that it does not constitute an offer to buy or sell financial instruments or an invitation to engage in such transactions. The information is based on data known to Kavaljer at the time it was published. Assessments and conclusions presented may be subject to change, and such changes may occur without Kavaljer distributing updated information. Kavaljer is not responsible for any loss or other damage (direct or indirect) related to the use of this publication, to investment decisions, or otherwise, nor for any inaccuracies in the publication arising from incorrect or incomplete information from third parties.

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