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Catella Avkastningsfond

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 net asset value of the fund rose marginally in December. Both credit exposure and interest rate risk exposure made a slight positive contribution to the fund’s return during the month.
Thomas Elofsson, 2019-12-31

Fund manager comment

The Swedish Riksbank raised its repo rate in December, as expected, thus consigning negative interest to the history books. In our assessment, the bar for returning to negative policy rates is now very high. In a time of both weakening economic activity and inflation, asset purchases are now the Riksbank’s main tool for monetary stimulus. One consequence of this is that pricing in the fixed income market is far too aggressive, and we expect bonds with maturities over 2 years will need to be re-priced, resulting in higher interest rates. We believe that 2020 may be the year when fiscal policy is shifted in a direction that entails more stimulus, and this applies to both Sweden and the rest of Europe. The United States holds presidential elections this year, and a one likely scenario is that there will be a contest for which of the candidates can promise the most fiscal stimulus. Larger budget deficits will lead to a greater supply of government bonds and, at a time when central banks are already buying a large part of the net supply of bonds, this realistically ought to lead to long-term interest rates being pushed upwards. An improved economy usually leads to a lower likelihood of defaults on corporate bonds, resulting in narrower credit spreads. Countering this, the higher interest rates that ought to follow from a stronger economy risk putting upward pressure on credit spreads from today’s historically low levels. All in all, we still believe that the return potential is greater for higher-risk investments, and that more creditworthy investment grade companies have weaker prospects of generating returns in the coming year. That said, there are risks and we do not believe this is a time to be too adventurous with risk-taking. Consequently, we intend to continue to strive for a well-diversified portfolio with a relatively short maturity in our credit investments and to continue to seek opportunities to be low or negative interest rate risk in order to generate returns in a situation of rising market interest rates.
The net asset value of the fund rose marginally in December. Both credit exposure and interest rate risk exposure made a slight positive contribution to the fund’s return during the month. The duration of the fund was 0.15 years at the end of the month. Otherwise, only minor adjustments were made to the portfolio.

Fund facts

Risk Indicator

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.

Fact

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).

Historical development

Fund manager

Sweden

Thomas Elofsson

Head of Portfolio Management, Fund manager, and acting CEO of the Company
Direct: +46 8 614 25 62
Sweden

Stefan Wigstrand

Fund manager
Direct: +46 8 614 25 58

Risk information

Investments in fund units are associated with risk. Past performance is no guarantee of 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. The Catella Balanserad, Catella Credit Opportunity and Catella Hedgefond funds are special funds under the Swedish Alternative Investment Fund Managers Act (SFS 2013:561) (AIFM). Catella Sverige Aktiv Hållbarhet and Catella Småbolagsfond may use derivatives, and the value of the funds may vary significantly over time. The value of Catella Sverige Hållbart Beta may vary significantly over time. Catella Avkastningsfond may use derivatives and may have a larger proportion of the fund invested in bonds and other debt instruments issued by individual national and local authorities and within the EEA than other investment funds, in accordance with Chapter 5, Article 8 of the Swedish Investment Funds Act (SFS 2004:46). Catella Nordic Long Short Equity and Catella Nordic Corporate Bond Flex may use derivatives and may have a greater proportion of the funds invested in bonds and other debt instruments issued by individual national and local authorities and within the EEA than other investment funds. For more details, complete prospectuses, key investor information, and annual and half-yearly reports, please refer to our website at catella.se/fonder or phone +46 8 614 25 00.

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