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 the world reopens, many companies and stocks will also benefit from this. In addition, when we have a world with higher inflation, equities are probably a better investment than bonds and cash.
Henrik Holmer, 2021-03-31
Fund manager comment
During March, we saw sharp stock market rises, not least in Sweden. Small companies generally had a slightly more modest development than the stock exchange as a whole. The small company index rose by 4.85% and the Catella Småbolagsfond was up a little bit more, 5.31%. The fund particularly benefited from its holdings in the raw materials sector, such as SSAB and Outokumpu, whose underlying price drivers have developed strongly so far this year. Another holding that contributed positively to the fund's relative development was the window manufacturer Inwido, which is one of the fund's largest holdings. Inwido believes we will be one of the biggest winners in the EU's green space, where property renovation is one of the cornerstones for reducing energy consumption and thus carbon dioxide emissions. On the negative side was the underweight in Electrolux, a company that developed strongly during the month thanks in part to analyst upgrades. The holding in Lindab also weighed, a holding that made a very positive contribution last year and at the beginning of this.
The stock market development during the month was driven by strong macro data, continued vaccination around the world, continued rising US long-term interest rates and a rising US dollar. At the same time, we have seen production disruptions, not least due to the lack of semiconductors and other components. So far, this has mainly affected the production of cars and trucks, but has an impact on many industries and also consumer goods. Expectations of inflation have continued to rise during the month. The raw material price increases that we saw at the beginning of the year will have an impact on many companies and it remains to be seen which companies will succeed in passing on these price increases to their customers. It remains to be seen whether the rotation we have seen towards more value-oriented cyclical equities will continue. This rotation has meant that the stock market continues to drift upwards, only other shares have taken over the baton. As the world reopens, many companies and stocks will also benefit from this. In addition, when we have a world with higher inflation, equities are probably a better investment than bonds and cash.
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.
