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.
Stronger bourses and credit markets together with relatively unchanged interest rate levels show that stimuli are more important than economic data in the market for the time being.
Thomas Elofsson, 2020-04-30
Fund manager comment
The fund rose during the beneficial market sentiment with 1,7 % in April. The fund's exposure in corporate credit is the reason for the strong development. The fund's duration amounted to 1,3 years at month end. The fund's credit exposure increased marginally during the month.
The tug of war between the weaker economic development, on the one hand, and monetary and fiscal stimulus on the other hand will affect financial markets over the foreseeable future.
During the month of April, central banks and politicians had the upper hand and financial markets recovered significantly. Stronger bourses and credit markets together with relatively unchanged interest rate levels show that stimuli are more important than economic data in the market for the time being. Our opinion is that the risk for setback is large, but in the end we expect central banks to win the battle. Fiscal policy combined with asset purchases is likely a powerful combination, but not without risk. The high levels of debt in the world economy is sensitive for higher rates which is something the financial markets can't cope with for the time being, Given the rapidly increasing deficits means that that supply of government bonds will increase dramatically and could lead to higher interest rates. The demand for these bonds is probably quite low from many investors given that the return potential is very limited. The point at which supply meets demand sets the price. This is where central banks enter and with their asset purchases make sure that some of the supply is "taken away", which holds interest rate levels at unchanged levels. The result is that as long as losses in terms of bankruptcies and defaults can remain contained, we will still have a beneficial environment for financial assets. There still remain threats and the most obvious is that combined losses are too high, alternatively that central banks for some reason are not allowed or want to continue asset purchases to a sufficient degree. Here and now, our view is that risks are further down the road, but also that they again grown larger than what they have been historically.
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
