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%.
On the short side we find companies that have seen sharp increases in share prices where the fundamental development has not moved in tandem.
Fund manager comment
Regarding the outlook we deem shares to be overbought in general after the last months' increase while we think that any sell-off should be limited, given the monetary and fiscal stimulus that is on-going. We continue looking for undervalued companies that we think have fallen excessively as a consequence of the pandemic, growth companies with further room for to be appreciated by the market, companies with underestimated profit outlooks as well as ESG-related investments. On the short side we find companies that have seen sharp increases in share prices where the fundamental development has not moved in tandem.
The equity markets continued to develop strongly during August, primarily driven by technology shares and Nasdaq rose by 11% but also the broader MSCI World index climbed by +6,5%. The number of covid cases in the US seemed to have passed their peak for this time combined with macro statistics that seem to show that the economic recovery is not grinding to a halt. At the end of the month the equity market got an extra push from Federal Reserve's Powell signalling an increased tolerance to higher inflation in the battle against unemployment. The long interest rates in the US rose considerably during the month but are still at a low level in a historic context. The Nordic shares (MSCI Nordic total return) ended the month +4,3% and all Nordic indices ended higher: Stockholm +3,5%, Copenhagen +2,6%, Oslo +3,6% and Helsinki +6,3%. Crude oil rose around 6% while the gold price was unchanged.
Catella Hedgefond rose by +2,50% during August and both equities and fixed income contributed equally to the performance. Among the positions that contributed the most to the increase was a short position in EQT after the company having delivered a weak quarterly report in combination with a high valuation which led to a fall of 22% during the month. Among our long positions that contributed the most to the positive performance you find Ovzon (+42%), Sampo (+10%) and Ambea (+8%). Among the losers we find short positions in AP Moeller-Maersk (+18%) and Schibsted (+15%) after a good quarterly report and a deal between Adevinta and Ebay.
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.