Geopolitical turmoil creates declines and volatilityMarch was a very weak stock market month for large-cap companies, with the broad Stockholm Stock Exchange (OMXSPI-GI) falling by -7.5% and the global index (Dow Jones Global Index) by -7.6%. The small-cap index (Carnegie Small Cap Return Index Sweden) also declined, but not as much (-5.6%).

The month was characterized by the conflict between the US/Israel and Iran, the associated blockade of the Strait of Hormuz, and the destruction of oil infrastructure across the Middle East. The latter two factors have led to higher oil and energy prices, which risk fueling inflation.

Our approach: analyzing the situation and acting calmlyAs always, we believe that investors or funds should not attempt to engage in macro analysis. The legendary economist John Kenneth Galbraith once said:

"The only function of economic forecasting is to make astrology look respectable."

We fully agree with the above, but add that it is important to assess the effects that macro events may have on our holdings.Our main observations are that the Iran conflict is already creating uncertainty among both consumers and companies, leading to postponed investment decisions—particularly for larger investments where the consumer or company can easily delay the decision.

This means that earnings for companies driven by large decisions are likely to weaken during 2026, while companies with subscription-based models or recurring small purchases (think supplements for your pet) will continue as usual.

When markets become volatile due to macroeconomic uncertainty, all companies are often treated similarly, causing share prices to decline across the board. We take advantage of this by adding to positions in companies whose operations are likely to remain stable even in uncertain times.

Read the full monthly report with company comments and more in the attached file.

About Kavaljer FundsKavaljer offers asset management services for private individuals, companies, institutions, and foundations. With over 30 years of experience, the goal is to generate long-term and stable returns through funds and discretionary portfolio management.

Contact usKavaljer ABVisiting Address: Cylindervägen 12, 9th floorBox 1221, 131 28 Nacka Strand, SwedenPhone: +46 8 684 393 00Email: info@kavaljer.se

DisclaimerRisk informationHistorical 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.

AttachmentsKavaljer Quality Focus March 2026