Rebalancing for Resilience

Today’s portfolio changes were not about finding the next winner.

They were about making the portfolio more balanced, diversified and resilient.

Over time, even a portfolio built around high-quality businesses can gradually become too dependent on a few sectors, currencies or economic drivers. That does not necessarily mean that the individual investments are wrong. It simply means that the portfolio itself may need attention.

Today, I decided to act on that principle.

I exited ABB and reduced my positions in Microsoft and TSMC.

These decisions were not a rejection of the underlying businesses. Microsoft and TSMC remain exceptional companies. But portfolio management sometimes requires reducing exposure to excellent businesses in order to improve the balance of the whole.

The capital was redeployed across four very different areas.

I initiated a position in GTT, bringing exposure to specialised LNG infrastructure and engineering.

I added Handelsbanken, introducing a high-quality Nordic bank and increasing exposure to the Swedish krona.

I significantly strengthened Lerøy Seafood, adding a different type of business altogether: food production, aquaculture and exposure to the Norwegian krone.

And I increased my position in Swiss Re, strengthening the portfolio’s insurance exposure while adding more weight to the Swiss franc.

None of these investments should be viewed in isolation.

Together, they change the architecture of the portfolio.

Technology remains important, but it now sits alongside energy infrastructure, banking, food production, insurance, industrials, healthcare and other businesses with very different economic characteristics.

The currency mix is also becoming broader.

That matters to me.

Diversification is often described simply as owning more companies. I increasingly think that definition is incomplete.

True diversification means owning businesses whose revenues, risks, geographies, currencies and economic drivers are genuinely different.

The objective is not to eliminate risk.

It is to avoid allowing one particular type of risk to dominate the portfolio.

Today’s changes were another step in that direction.

A resilient portfolio is not built by collecting the greatest possible number of investments. It is built by making sure that each position contributes something useful to the whole.