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%.
We still have confidence in the care sector, where our holdings include Ambea.
Fund manager comment
November turned out to be a volatile month on global stock markets, closing up a little under 1% according to the MSCI World global index, while Nordics fell 1.3%. Copenhagen was the best Nordic stock market at +2.9% and Oslo was the worst at -4.2%, but Stockholm and Helsinki also fell this month. The US ended the month a little up and Europe a little down. Macroeconomic data was generally weaker, but the stock exchange was also driven by information about the US-China trade negotiations, the Federal Reserve expressing a little more caution about upcoming interest rate hikes, and an oil price that fell sharply during the month. Catella Hedgefond fell 0.9%, mainly due to the fund’s long equity positions in the oil services industry, a sector that fell considerably on the back of weaker oil prices. Among the non-oil-related companies, we also lost on Boozt, which guided down its margins for the fourth quarter and early 2019. The winners included Walleinus Wilhelmsen and Ambea.
In our previous monthly report, we talked about the fact that energy-related holdings had performed weakly during October after previous good returns, and also that we had started to reduce the risks in this area. Unfortunately, this segment continued to contribute negatively to the return in November, and we have continued to trim down the risks and position sizes. Even though we consider the holdings to be attractive, we have taken into account the fall in oil prices and have adjusted the risks to an appropriate level. During the quarter, there have been more positive signals about trade negotiations between the US and China, but as a play on this we see greater upside in transport stocks like Wallenius Wilhelmsen and Flex LNG than in Maesk (where much is already factored into the share price). We still have confidence in the care sector, where our holdings include Ambea. It is encouraging to see that both the management and Sequoia Fund bought shares in Boozt following its report. Our assessment is also that some cyclical companies in commodities, steel and engineering have factored in a significantly weaker economic scenario and, even if macro data continues to be weak, they have potential to outperform the stock market as a whole.
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 five 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.
Prizes and nominations:
- Best Hedgefund 2015- Fondmarknaden.se
- This years Hedgefund 2014 - Privata Affärer
- Best Hedgefund 2014- Fondmarknaden.se
- Nominated Euro Hedge Awards 2014
- Nominated Nordic Hedge Award 2014
- Nominated Investors Choice European Multi Strategy Fund of 2014