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.
Catella Småbolagsfond is an actively managed fund whose objective is to deliver return that is higher than the average among the Swedish small cap companies included in the Carnegie Small Cap Return index.
To achieve that end, the fund invests in a concentrated portfolio of carefully selected Swedish small cap equities that the managers consider undervalued. The analysis process behind the fund's investments is based on Catella's fundamental analysis and broad expertise on Swedish companies. 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.
As a result of weak demand and the lack of storage capacity, WTI-oil futures contracts before expiry went into negative territory. This was the first time ever this had happened.
Fund manager comment
Catella Småbolagsfond rose 11,2 percent during the month, which was slightly below its benchmark which was up 11,4 percent. Most positive contributions to relative performance came from holdings in Dometic, Mycronic and Lundin Mining. Mycronic increased 28 percent on the day of their Q1 report. The report was stronger than the market had anticipated. Most important positive drivers were strong order income and that the company stuck to its revenue guidance for 2020. Negative contributions during the month were the underweight in Evolution Gaming and the holdings in Fabege and SCA.
After the dramatic falls in the equity markets that started in February, there was a steady increase in April. A proof of this is that the American benchmark index S&P500 had its best month since 1987. The Corona virus has continued to set the tone on the world economy. As we move into May, we see several signs that in a number of countries new cases are slowing down. As a result, some countries are easing on the mobility restrictions. As this happens, it is apparent that there is a risk of a second wave of spreading of the virus. During the month there was news that the American pharmaceuticals company Gilead has had positive indications regarding its medicine Remdesivir for treatment of COVID-19.
During the month of April, in the commodity markets we have seen large moves in the price of oil. As a result of weak demand and the lack of storage capacity, WTI-oil futures contracts before expiry went into negative territory. This was the first time ever this had happened.
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 Småbolagsfond invests in Swedish small caps and focuses on finding undervalued companies. Genuine stock picking, in other words.
The fund is intended for investors seeking exposure to Swedish small caps, with a higher expected return than the Swedish stock market indices and who have an investment horizon of at least five to seven years. The fund is permitted to use derivatives and the net asset value of the fund may fluctuate considerably.