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.
The objective of Catella Hedgefond is to achieve stable returns at low risk, regardless of market conditions.
The fund invests mainly in Nordic equities and 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, or weapons. Derivatives are used in management to protect fund capital and increase return opportunities. The fund is expected to have low co-variation with performance in the equity, credit and bond markets and may thus both raise the expected return and lower the expected risk in a traditional equity and fixed income 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 fund's target is to generate annual return of 3-5% with a standard deviation of 3%.
Nordic stock markets continued to rise in March, albeit at a more modest pace.
Fund manager comment
Nordic stock markets continued to rise in March, albeit at a more modest pace. OMX showed a gain including dividends of 0.5%, while Copenhagen stood out as the strongest Nordic stock market index with a rise of 4.5%. The trend of weakening macro data also continued, with lower purchasing manager indexes in the US and the Eurozone, while data for the manufacturing industry in China broke the pattern and strengthened somewhat. It was notable that interest rates fell in both the US and Europe this month.
Catella Hedgefond rose slightly by 0.03% this month, with a clear positive contribution from the credits portfolio. The equities side lost ground, driven by a long holding in Swedbank that was built up during the month and some less successful holdings on the short side of the portfolio. Carlsberg is a large short equity position, and rose 7% during the month. A small holding in Attendo that we bought after a significant decline cost a few points following another profit warning – and this also had an impact on the large positions in Ambea and Humana, which were driven by Attendo's profit warning despite not having any operations in Finland (although Humana intends to make acquisitions in Finland). On the positive side, Wallenius Wilhelmsen did well this month and Boozt continued its upward journey.
Our exposure has remained cautious. With the stock exchange's valuation back in the range that prevailed before the market slump, we believe it is wise to have a cautious approach to further risk-taking and are keeping the net low – even though we are slowly and methodically building up the gross exposure from low levels. Swedbank caused significant losses in the last few days of the month but we have maintained the position intact and judge that the share has significant upside, even though the potential may take time to realise. It is very difficult from the outside to assess whether a crime or rule violations have been committed, but it is our opinion that Swedbank's situation is considerably different from that of Danske Bank. A loss in value of SEK 100 billion is not reasonable in light of the sanctions that could be considered once the relevant authorities have decided what failings may have occurred in the bank. The tone of media reporting has been remarkably shrill given the lack of substantial information. All banks are exposed to attempts at money laundering on almost a daily basis, which makes it an issue for the entire sector, and it is far from clear that Swedbank stands out in a negative way.
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.
Catella Hedgefond fund's objective is to deliver consistent, positive returns regardless of stock market trends.
To make money in both market upturns and downturns, the fund managers invest in Nordic fixed-income securities and equities, and gain protection from downturns through derivatives. This means that timing is not an issue when investing in Catella Hedgefond, and low risk is a cornerstone of the fund. The fund is run by a total of four managers. The team's experience and knowledge generate the management performance.
The fund is traded daily, making your money normally available immediately. Over time, the fund has had a high risk-adjusted return. This is a fund for investors seeking a solid base for their savings.