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%.
The Nordic bourses climbed slightly during the first 3 weeks in October.
Fund manager comment
Catella Hedgefond fell by -0,41% during the month. The largest positive contribution came from the index hedge in OMX, while among the single stock specific positions the short position in Atlas Copco as well as the long position in Wallenius Wilhelmsen that benefits from optimism around car production and investments in mines (Wallenius Wilhelmsen ships this merchandise). Many credit positions contributed positively during the month. The negative contribution came partly from Corona losers such as Ambea and H&M, but also from the long position in TopDanmark and SOBI which delivered in a disappointing manner. TopDanmark again had more damages than expected, this time moisture damages in Danish houses.
The Nordic bourses climbed slightly during the first 3 weeks in October, but then fell heavily at the end of the month. MSCI Nordic Index fell by 4,74%, Stockholm the worst -5,94% while Denmark fell the least with -2,67%. During the end of the month there was a second wave of Corona and following lockdowns, in Europe among others, as an important factor that affected the markets, and "Corona losers" lost more than the market in general.
Certain uncertainty before the US elections impacted the performance. Macro data, interest rates and currencies did not surprise by a lot. Earnings season has been relatively good, many companies have been good at defending margins and cash flows. On an aggregate level the revenues were pretty much as expected, but margins better thanks to cost savings. We expect earnings expectations for 2020 to increase by 5-8% while only up by 1-2% for 2021.
Companies with positive surprises were among others SKF, Volvo and Electrolux, corona winners such as Boozt and Thule, Ericsson that wins on Huawei's expense and currency as for example H&M and Nordea which had lower costs than anticipated. But in some cases, the expectations were too high which was evident for some of the big tech companies such as Apple, Facebook and Amazon which contributed to a weak ending for October.
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.