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.
Although interest rates are by and large the lowest we have had since the financial crisis, our assessment is that the strong sentiment will persist so long as central banks do not signal less expansionary monetary policy, which probably requires stronger economic signals and higher expected inflation.
Thomas Elofsson, 2019-06-30
Fund manager comment
Continued weak incoming macro data and ever higher expectations of lower central bank interest rates continued to support the trend of falling bond yields, rising stock markets and good corporate bond performance. This also meant that the divergence between how different asset markets price the probability of recession continued to increase during the month. The fixed income market indicates that growth and inflation will continue to weaken, while credit and equity markets assess this risk as low. Although interest rates are by and large the lowest we have had since the financial crisis, our assessment is that the strong sentiment will persist so long as central banks do not signal less expansionary monetary policy, which probably requires stronger economic signals and higher expected inflation.
The favourable environment for financial assets during the month meant that the portfolio developed positively in June. Falling interest rates were the main contributor to the positive trend. The credit portfolio showed a slight negative performance during the month. The majority of the credits had a positive return, but in the wake of bond holders taking over ownership in telecom operator Lebara, this had a negative impact on the portfolio's return. We have good hopes that there are values that the new owners can realise through this action. The fund's unit value increased by 0.25 % during the month. The risk level in the fund is balanced and the cash position remains high. At the end of June, the duration was 1.5 years.
Fund facts
Risk Indicator
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.
Fact
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: 100SEK/€10
