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.
The reporting season can be said to have been mixed, with some estimate revisions on aggregate, leading to small declines in the stock market.
Fund manager comment
The trend of falling bond yields was supported during the period by continued weak macro data and increasing expectations of lower central bank interest rates. The reporting season can be said to have been mixed, with some estimate revisions on aggregate, leading to small declines in the stock market. The ever-lower market interest rates meant that corporate bonds developed well this month. The divergence between how different asset markets price the probability of recession therefore diminished somewhat during the month, but still appears too great. The fixed income market indicates that growth and inflation will continue to weaken, while credit and equity markets assess this risk as small. Interest rates are at their the lowest since the financial crisis, and our assessment is that the bond market is now fully priced for a recession and that economic data will have to continue to surprise on the downside for interest rate levels to fall further.
The net asset value of the fund rose 0.25% in July. Falling interest rates were the main reason for the fund's positive return during the month. Despite continued indications of a weaker economy, the risk sentiment was good, which meant that the fund's holdings in corporate bonds also contributed to the monthly return. The fund's interest rate risk was reduced during the final days of the month, and the duration was 0.8 years at the end of the period. Otherwise, only minor adjustments were made to the portfolio.
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).