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.
In this uncertain environment, we stick to our philosophy of investing in companies with stable finances, strong and sustainable business model, strong market position, profitable and sustainable growth combined with a management we have confidence in.
Martin Nilsson, 2020-06-30
Fund manager comment
Catella Småbolagsfond increased by +2,66 %, which was better than the benchmark index which was up 2,37 %. The main positive contributors to the relative performance were the holdings in Husqvarna, Lindab and Lundin Mining. Husqvarna which is the leading global manufacturing company of garden products announced a positive earnings outlook, where primarily the sale of irrigation products developed better than expected. This is very positive as these products in general carry higher margins. Negative contributors during the month were the underweight in company NetEnt, which is under a bid from Evolution Gaming, the real estate company SBB and the holding in SCA.
As we summarise the first half of 2020, we can conclude that we have lived through historic times. Already during the start of the year, the world had knowledge of the outbreak of Covid-19-viruset in China. It took however some time, to end of February, before the market understood the severity of the situation. After the dramatic falls in the equity market during February and March, we have seen a gradual improvement, which has resulted in rising stock markets.
This increase continued during the month of June. A contributing factor was that central banks have launched massive stimulus to support the world economy. We however think that Covid-19-virus will influence equity markets and the world economy for the foreseeable future. There is an obvious risk that we may see a second wave of infections as the world gradually opens up. Furthermore there are increased tensions between countries, primarily the US and China. In this uncertain environment, we stick to our philosophy of investing in companies with stable finances, strong and sustainable business model, strong market position, profitable and sustainable growth combined with a management we have confidence in.
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 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.
