OSLO: Ignoring its global mandate to invest in Apple Inc. and Facebook Inc. is delivering top returns for this technology fund.

The Swedbank Robur Ny Teknik fund just focuses on small, “innovative” companies in Scandinavia with a heavy concentration in medical technology.

“There’s a Nordic IT miracle,” Carl Armfelt, the fund’s manager who also helps oversee the small-cap team at Swedbank Robur in Stockholm, said in a phone interview on Thursday. “The Nordics is the best region globally to make good investments in these sectors.”

In a global low-growth environment big companies are struggling to keep expanding. Even a technology giant such as Apple reported falling revenue and earnings for its fiscal year 2016.

“At the time being we’re finding too many interesting investment opportunities within small caps to consider investing in Apple, Facebook, Google or alikes,” he said. “It’s easier to find good companies in the Nordics than in the US and Europe.”

Part of the reason is that given the small size of the Nordic region, the companies must very quickly “target a global market,” he said.

The fund, which holds 8.6 billion kronor (Dh3.75 billion, $1 billion), has a mandate to invest 30 per cent outside the Nordics. It has an average annual return of 30 per cent in the past five years, making it the top ranked among peers, according to Morningstar.

Armfelt, 32, and his partner Erik Sprinchorn, 48, who earlier worked together at hedge fund manager Brummer & Partners, use fundamental bottom-up analysis. They also put special weight on who the other investors are in a company.

“If we can find a great industrial investor, it can sometimes be more valuable to invest in such a company at a higher valuation than being the only institutional investor in another company,” Armfelt said.

In the past six months the fund has bought RaySearch Laboratories AB, Gaming Innovation Group Inc., Evolution Gaming Group AB and Boule Diagnostics AB among others.

“It’s obvious that the smaller the company, the larger is the possibility to generate a really good return,” he said. “Small companies are to a larger extent mis-analysed. They are more driven by entrepreneurs. It’s also easier for a small company to grow profitably than a big one.”

Holding companies in the market capitalisation “sweet spot” from $100 million to $1 billion also allows the fund to pay less attention to political risk and interest rates.

“In the macro economic climate of low growth, companies must generate growth on their own,” he said. “For companies that grow EBIT it doesn’t matter whether rates are high or low. It’s still the best way to invest money.”