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.
On the macro-economic front, the month was affected by a continued recovery in activity in all important regions.
Fund manager comment
Catella Nordic Long Short Equity decreased by 1,1 % during the month. The primary reason for the weak development were the short positions in property shares that had a strong development during the month. The short positions in Balder, Sagax and Castellum contributed negatively to performance. The main positive contributors during the month were long positions in SOBI, Biotage and Novo Nordisk.
At the end of the month the fund had an overweight to healthcare and information technology, as well as an underweight in property companies and banks. Common for the positioning is that the fund has an overweight to stable companies and an underweight in indebted companies. Gross exposure amounted to 125 % during the month and net exposure at month end at - 5 %.
September was characterised by falling global equity indices with MSCI World down 2.9%, S&P 500 down 3.8% and Eurostoxx 2.3%. The Stockholm Stock Exchange and Copenhagen went the other way after a weaker relative performance during August. OMX Stockholm Benchmark rose by +4.2% while Copenhagen was up +2.9%. Norway and Finland were down slightly.
On the macro-economic front, the month was affected by a continued recovery in activity in all important regions. The partially weak performance in the market can be explained by a correction of highly valued tech stocks and the fact that the Federal Reserve expressed an increased concern on the economic recovery at their rates decision on 16 September. The markets rates sank during the month while the Swedish krona weakened vs most major currencies. Commodity prices fell during the month with a particularly weak performance for gold (-5%) and the oil price (Brent -7%).
Regarding the outlook, we deem shares in general to be overbought after the last months' increase but think that a setback will be limited, given the monetary and fiscal stimulus that is ongoing, The fund still has a balanced positioning with a slight overweight to stable companies and an underweight in indebted companies.
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€.