Investments in fund units are associated with risk. Past performance is no guarantee for future returns. The money invested in a fund can increase and decrease in value and it is not certain that you will get back the full amount invested. No consideration is given to inflation.
Catella Avkastningsfond is a fixed income fund whose target is to achieve stable return at low risk.
The fund invests in Nordic corporate and government bonds, with emphasis on investment grade corporate bonds. The fund applies negative screening for sustainability criteria and consequently avoids long positions in companies that produce tobacco, alcohol, commercial games for money, pornography, coal, oil or weapons. Derivatives are used in management to protect fund capital. Over time, the fund's returns will co-vary with the Nordic bond market. Investments are based on fundamental analysis of individual companies and traditional macroanalysis. Composition of the fund reflects Catella's outlook on the conditions for generating return in relation to risk in respect of credit and interest rate risk.
Worries around a second wave of the corona virus together with uncertainty around the US presidential election led to a weak risk sentiment during the month.
Fund manager comment
The fund's NAV was unchanged during the month of October. Low activity and small movements over the course of the month are the reasons for the performance. The fund's duration amounts to 1,5 years at month end. Only smaller portfolio adjustments were made during the month.
Worries around a second wave of the corona virus together with uncertainty around the US presidential election led to a weak risk sentiment during the month. Despite falling equity markets internationally and wider credit spreads in October was a calm month in the Swedish fixed income and credit markets. A second wave of corona and smaller (or larger) restrictions of mobility in societies will obviously affect the economic development negatively.
Central banks have already prior to this second wave signalled that the economic recovery risks being weaker than expected. Our expectation is now that the market expects more monetary stimulus during the last quarter of the year. Without the "Christmas gifts" from central banks, the markets are vulnerable, but the central banks as well aware of this and won't disappoint markets.
The main threats in the near future is the second wave of covid virus spread. In the long run the economic development is decisive and the unsustainable fiscal policy. As long as the confidence for central banks is high, this is not a problem, but without higher growth as well as higher inflation to solve the high unsustainable levels of debt in the world economy will be decisive for the for the world's global financial markets.
The risk and reward indicator illustrates the link between risk and potential returns from an investment in the fund. The indicator is based on how the fund’s value has changed over the past five years. Category 1 does not mean that the fund is risk free. The fund may over time move towards the left or right of the scale. This is because the indicator is based on historical data which is not a guarantee of future risk and reward. For information about the risk classification of each fund, please refer to the fund’s key investor information document.
Catella Avkastningsfond is an actively managed fixed-income fund which invests in corporate bonds with rating investment grade, high yield as well as non rated bonds. The fund may also invest in derivative instruments to, for example, protect the capital in the fund, and may use currency derivatives, such as through the purchase or sale of foreign currency on a forward basis, in order to hedge its holdings. It has a history dating back to 1999, with low risk, consistent returns and positive annual returns in every year. In short, existing investors in the fund have received good rewards for their risk.
The fund is suitable for investors seeking an actively managed fixed-income fund that invests in both the money market and the bond market.
The fund is permitted to use derivatives and to have a larger percentage of the fund invested in bonds and other debt instruments issued by individual central government and municipal authorities and within the EEA than other securities funds, in accordance with Chapter 5, Section 8 of the Swedish Securities Funds Act (SFS 2004:46).