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%.
We have also seen a cautious renewed interest in defensive stocks after a year of underperformance.
Fund manager comment
The Nordic stock markets climbed slightly in April, the MSCI Nordic Index rose 1.6% in SEK and all stock markets rose. The Danish stock market did best, rising 4.8%, while Oslo was the weakest with + 0.8%. Including dividends, the return is higher.
Rising inflation continued to be a theme in the market with leading indicators such as ISM Prices Paid at the highest level since years before Lehman Brothers, also PPI, CPI and import prices were all higher than expected in the US. Prices rose sharply for timber in North America, including metals such as copper and tin, grain prices such as corn, soybean and wheat rose and several other raw materials. The aftermath of the stop in the Suez Canal has kept container shipping costs up. On the other hand, US inflation expectations (in the form of 10-year Break even inflation, ie the differences between nominal and real interest rates) rose only marginally in April from 2.37% to 2.41%, while the Swedish 10-year inflation expectation rose 12 points in April to 1.84%. The long-term interest rate fell in April in the USA and rose only very marginally in Sweden, which resulted in long-term real interest rates falling by 10-15 bp and becoming even more negative, which gave support to the stock markets.
We feel that there has been a certain cautious continued sectoral rotation towards value from growth, but this has mainly been seen in the form of growth shares often receiving surprisingly little in price rises for good reports. We have also seen a cautious renewed interest in defensive stocks after a year of underperformance. April was reporting month, so individual company reports also had a major impact.
Catella Hedgefond rose + 1.42% in April. The largest positive contribution came from long-term equity positions, while credits also contributed positively, while short-term equity positions and index futures contributed negatively. The best share position was Electrolux Professional, which rose just over 18% in April, among other things on a good report and positive future prospects. Other good positions were HM and Ambea, which are expected to benefit when society reopens completely after Covid-19, as well as Sdiptech and Embracer. The worst position was the short position in Latour, which we consider to be overvalued with almost 50% premium vs Net Asset Value at the moment after a continued rise for the share in April.
We are cautiously positioned with lower net exposure and slightly less factor exposure than we had before. We still believe in a good chance of slightly higher inflation and thus rotation towards value stocks, but a lot has also been priced into the market in the last six months, so we have reduced the exposure value vs growth. However, we believe that the large companies have performed a little too well in relation to medium-sized companies this year, which is why the exposure is somewhat commissioned, however, we have done so with limited liquidity risk.
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.