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.
An actively managed fixed-income fund with a focus on corporate bonds issued in the Nordic countries. With its broad mandate, the fund has a bigger toolbox to better adapt to different market scenarios. The fund invests across the entire fixed-income capital spectrum.
The fund invests mainly in Nordic fixed income securities. 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, or weapons. Derivatives are used in management to protect fund capital and increase return opportunities. The fund is expected, over time, to have low co-variation with the equity market and may thus both raise the expected return and lower the expected risk in a traditional equity and fixed income fund portfolio. In structuring the portfolio, strong emphasis is placed on spreading risk and preventing any individual holding or sector from having excessive influence on fund performance. Investments are based on fundamental analysis of individual companies and traditional macroanalysis. The risk level will vary depending on Catella’s assessment of prevailing market conditions. The fund’s target is to generate annual return of 3-5 % with a standard deviation of 5% over time.
Risk assets continued to develop positively during March while market interest rates fell steeply, which set a favourable environment for the fund overall.
Thomas Elofsson, 2019-03-31
Fund manager comment
The somewhat unusual combination of falling long-term interest rates, flatter yield curves and good risk sentiment continued in March. The question is how long this will continue. Rising commodity prices, rising stock prices and good development for credits are in contrast with falling interest rates. Our assessment is that the strong sentiment will persist as long as central banks do not signal less expansionary monetary policy, which would probably require stronger economic signals and higher expected inflation. Corporate financial reports in April will likely provide a somewhat subdued picture of the economic outlook, which we believe is fairly well priced into the market. Given the strong development of the capital markets one might think that risk sentiment in danger of deteriorating, but our view is that central banks affect capital markets more than corporate results and that the favourable environment will continue.
Risk assets continued to develop positively during March while market interest rates fell steeply, which set a favourable environment for the fund overall. The net asset value of the fund rose by 0.6% this month. The risk level in the fund is balanced and the cash position remains high. The duration was lowered in the wake of the falling interest rate levels, amounting to 0 at the end of the month.
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 or the highest permitted risk for the fund. Category 1 does not imply that the fund is risk-free. Over time, the Fund’s risk indicator may change both upwards and downwards. This is because the indicator is based on historical data for the Fund’s model portfolio, which is not a guarantee of future risk/reward.
Fact
Catella Credit Opportunity is designed to meet a challenging interest-rate environment and to be better able to adapt to different market scenarios.
The fund is an absolute return special fund and has a focus on fixed-income securities. The fund has a broad investment mandate, which allows investments across the entire fixed-income capital spectrum. At least 50 percent of the fund's assets are invested in Nordic holdings.
The fund invests predominantly in owned bonds, convertible debentures, preference shares and cash management. The fund's independence of any benchmark allows for business-based and flexible decisions. The fund uses derivatives both opportunistically and to protect its capital against the two primary risks, interest-rate risk and credit risk.
The fund is a further development of the successful and award-winning Catella Nordic Corporate Bond Flex fund. The new fund has an even broader management mandate and takes more risk in its investments, but also has greater potential to make use of derivatives for protection.
