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 the Catella Nordic Long/Short Equity fund is to deliver competitive returns regardless of market conditions.
The fund invests mainly in Nordic equities. 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, over time, to have low co-variation with the equity market and may thus both raise the expected return and lower the expected risk in a traditional equity and fixed income fund portfolio. The portfolio is structured in two parts, consisting of long and short equity positions respectively, which are both expected to contribute to the fund's characteristics while jointly creating a favourable balance between risk and return. Investments are based on a combination of traditional equity research and quantitative methods. The fund's target is to generate annual return of 5-10% with a standard deviation of 5-10% over time.
At the end of the month, the fund had an overweight in healthcare and information technology and an underweight in real estate.
Fund manager comment
Catella Nordic Long Short decreased 4,8 % during the month. The main reason for the weak performance was the short positions in the portfolio. The short positions in Autoliv, NetEnt, Kindred and Trelleborg as well as the long positions in SSAB and SKF contributed to the negative result in the month. The main positive contributors were the long positions in Hexagon, Rockwoll and Micronic as well as the short position in Fabege.
At the end of the month, the fund had an overweight in healthcare and information technology and an underweight in real estate. Common features in the positioning is that the fund has an overweight in stable quality companies and an underweight in companies with higher levels of debt. Gross exposure at month end was 121 % and net exposure +/- 0 %.
We believe that analysts are underestimating the economic impact of the situation, but also feel that the monetary and fiscal policy measures now being implemented may be sufficient in to surprise analysts positively.
The tug of war between weaker economic development and more policy response than we have ever seen before, continues. We believe that analysts are underestimating the economic impact of the situation, but also feel that the monetary and fiscal policy measures now being implemented may be sufficient in scope to stabilise developments in the financial markets
During the month, the positive scenario has gained traction and the recovery in financial markets has been extraordinarily strong. We believe that the risk of a setback is large as economic fundamentals will be very weak. The negative scenario would be a situation similar to the Great Depression in the 1930s, which would have devastating consequences for both the world economy and global financial markets. Our base assumption tends towards the positive, mainly because far too much is at stake. Although it will lead to exploding budget deficits and, in the long run, higher inflation, the alternatives are simply too terrible and "helicopter money" is the least-bad option. What we envisage ahead of us is a market with continued large movements and sudden tilts in the coming weeks or months. We believe that most of the major re-valuation of the asset markets has already taken place, and from this point the differences within each individual market will be more significant. The losers will be companies that need to turn to debt restructuring or new rights issues, and those that have sufficiently strong balance sheets to survive the coming months may well see their share prices rise, even in a generally weak market.
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 Long Short Equity is an alternative equity fund with a Nordic focus that can perform in both upturns and downturns. It has lower risk than the stock market and should deliver a competitive return. The fund is managed by our hedgeteam.
The fund is suitable for investors seeking equity exposure with the opportunity to also make money in a falling stock market.
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.
Target return: Absolute return with a good risk-adjusted return
The fund is a Luxembourg-listed daily traded UCITS fund. The minimum deposit is 100 SEK/10€.