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 are seeing signs of a changing trend for value-driven investments, which we believe will continue in a market environment of slowly normalising interest rates and a continued low risk of recession.
Fund manager comment
The Stockholm stock exchange was unchanged in September, thus outperforming Copenhagen and Helsinki, which fell 3.6% and 1.9% respectively. Oslo did better with a gain of 3.1%, driven partly by the energy sector. The Swedish krona rose this month, following its weakness earlier in the year. Interest rates rose worldwide after continued strong US macro data and stabilisation of global growth expectations.
Catella Hedgefond rose 0.11% in September, with the best contributions coming from short equity positions. The gains from short positions have been spread across a large number of companies, with Maersk, Axfood and Huhtamaki making the biggest contributions, and Equinor providing the biggest loss. The best contributions among long positions came from Flex LNG, Aker, BW Offshore and Ambea, while Outotec and Boozt were the most significant losers.
The portfolio is well diversified with many individual equity exposures, but there are some common denominators or themes.
The fund has long been exposed to a number of energy companies, particularly in oil services. High energy prices and strong demand are generating increased investment needs in the energy sector, and this will remain the case even if oil prices do not continue to rise.
A large part of the portfolio focuses on companies that are all attractively valued and have little downside risk. The prolonged low interest rates and stimulus from central banks have meant that stock markets have been momentum-driven in recent years and valuations have been less important, and this was particularly pronounced over the spring and summer. We are seeing signs of a changing trend for value-driven investments, which we believe will continue in a market environment of slowly normalising interest rates and a continued low risk of recession.
Another category of investments could be called turnaround cases, by which we mean companies that appear to be reaching the end of a negative trend and that also have an attractive valuation and/or catalysts for a clear reassessment.
Our total net exposure and correlation to the stock exchange is low since we currently do not have a strong expectation in any direction. Our ambition is to increase the gross exposure during the autumn.
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