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.
An actively managed fund that offers corporate bonds issued in the Nordic region. The fund is able to perform in both rising and falling interest-rate markets.
Catella Corporate Bond Flex is a fund whose objective is to deliver competitive risk-adjusted return. The fund invests in Nordic corporate bonds, both investment grade and high yield, and government bonds. The fund applies negative screening for sustainability criteria and we consequently avoid long positions in companies that produce tobacco, alcohol, commercial games for money, pornography, coal, oil or weapons. Derivatives are used in management to protect fund capital. Over time, the fund's returns will co-vary with the Nordic corporate bond market. 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. Composition of the fund reflects Catella's outlook on the conditions for generating return in relation to risk in respect of credit and interest rate risk.
Worries around a second wave of the corona virus together with uncertainty around the US presidential election led to a weak risk sentiment during the month.
Fund manager comment
The fund rose by 0,6 % in October. The increase of the whole month came from the fund's holdings in bonds issued by the finance company Lowell, that among other things has bought Intrum's Norwegian business as well as Lindorff's Swedish, Danish and Finnish business. Lowell refinanced the outstanding bonds and the main owner injected new equity. In general there were small movements during the month with small activity. The fund's duration was 1,3 years at month end. Only minor portfolio adjustments were made during the month.
Worries around a second wave of the corona virus together with uncertainty around the US presidential election led to a weak risk sentiment during the month. Despite falling equity markets internationally and wider credit spreads in October was a calm month in the Swedish fixed income and credit markets. A second wave of corona and smaller (or larger) restrictions of mobility in societies will obviously affect the economic development negatively.
Central banks have already prior to this second wave signalled that the economic recovery risks being weaker than expected. Our expectation is now that the market expects more monetary stimulus during the last quarter of the year. Without the "Christmas gifts" from central banks, the markets are vulnerable, but the central banks as well aware of this and won't disappoint markets.
The main threats in the near future is the second wave of covid virus spread. In the long run the economic development is decisive and the unsustainable fiscal policy. As long as the confidence for central banks is high, this is not a problem, but without higher growth as well as higher inflation to solve the high unsustainable levels of debt in the world economy will be decisive for the for the world's global financial markets.
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. Category 1 does not mean that the fund is risk free. The fund may over time move towards the left or right of the scale. This is because the indicator is based on historical data which is not a guarantee of future risk and reward. For information about the risk classification of each fund, please refer to the fund’s key investor information document.
Catella Nordic Corporate Bond Flex is an actively managed alternative fixed-income fund that is able to perform in both rising and falling interest-rate markets. The fund has a flexible toolkit, which means that it can easily allocate between different fixed-income asset classes.
Unlike traditional fixed-income funds, Catella Corporate Bond Flex has the potential to parry rising interest rates.
The fund is permitted to use derivatives and to have a larger percentage of the fund invested in bonds and other debt instruments issued by individual central government and municipal authorities and within the EEA than other securities funds.
The fund is suitable for investors seeking a higher risk and the potential for higher returns than traditional fixed-income savings.
Catella Nordic Corporate Bond Flex is a daily-traded alternative UCITS fixed-income fund registered in Luxembourg. Minimum investment: SEK 10 million. If you are interested in investing a smaller amount, please see Catella Nordic Corporate Bond Flex RC.