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.
During the month we have seen an increase in the number of mergers & acquisitions.
Fund manager comment
Catella Småbolagsfond rose by 4,0 percent during the month. The fund's benchmark index rose by +5,1 percent during the same period. The main positive contributors to the relative performance during the month were industrial companies Lindab and Inwido, medtech company Carasent as well as the underweight in Electrolux. Lindab produces solutions for improved indoor climate and simplified construction and Inwido is Europe's largest window company. The companies are benefiting from EU's green initiatives where renovation of properties is one of the pillars to decrease the energy consumption and hence carbon dioxide emissions. The negative contributions to the relative performance during the month were holdings in Hexpol as well as underweights in tech company Sinch and industrial company Beijer Ref.
The positive development in the equity markets continued during the month of December. The strongest development among the Nordic bourses were Oslo and Copenhagen. During the month we have seen an increase in the number of mergers & acquisitions. An example of this was Astrazeneca's acquisition of Alexion, Latour's and Bure's bid for Allgon, EQT's offer for Recipharm and the ongoing bidding war for Norwegian property company Entra.
With several world equity markets at record highs and a historically high valuation we can conclude that the improvement in the economy we see during next year is partially already in today's share prices. In relation to the outlook for 2021 the expectations are optimistic even though 2020 ends on a note with increased spread of the virus globally and the implementation of new restrictions. The key to the development for next year and a return to normality requires the vaccines to be successful.
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.