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.
Sustainability is the objective of the Catella Sverige Aktiv Hållbarhet fund, which actively seeks to identify companies where sustainability is embedded in the business concept.
Turnover is higher in active management than in traditional equity funds and the fund aims to deliver return that exceeds its benchmark over time. Investments are selected for the fund through a combination of financial and sustainability analysis. The investment process is based on the conviction that there is a connection between a sustainable business model and persistent profitability and growth over the long term, and that this is often underestimated by the market. Having a sustainable business model involves providing products and services that offer solutions to global environment, social and corporate governance challenges. The fund’s choice of companies is also limited by negative criteria, meaning that the fund does not invest in companies that violate any of the ten principles of the UN Global Compact. The fund is also permitted to invest in derivatives as an aspect of the investment strategy.
Global equity markets rose broadly as hopes to the stimulus had the market pricing in a complete recovery in the economy and that the effects from the virus will be short-lived.
Fund manager comment
The recovery that started in April continued into May. The news flow continues reporting on more countries easing their restrictions, retail chains opening their stores and the virus graphs pointing in the right direction.
Global equity markets rose broadly as hopes to the stimulus had the market pricing in a complete recovery in the economy and that the effects from the virus will be short-lived. The Swedish equity market rose 5,5% and Catella Sverige Aktiv Hållbarhet rose 5,3%. The strongest contribution came from the industry sector primarily from Sweco and Vestas that performed strongly. Furthermore, the holdings in the communication sector contributed positively while the property sector and the underweight in Evolution Gaming contributed negatively to the relative performance.
The uncertainty remains high and it is hard to understand the ramifications of this pandemic on our society. Furthermore, the geopolitical climate has added to the uncertainty as the tensions in Hongkong and between the US and China have increased, together with rising domestic tensions in the US. This together with real economic consequences that the pandemic will have on unemployment and the economic growth makes it uncertain. The equity market has shrugged of the worry around the economic consequences and has looked to the enormous stimulus and easing that has taken place.
We stick to our strategy of investing in sustainable companies with sustainable business models. The sustainability trend is continuously strong and can be further reinforced by what we are going through. These companies are not immune to cyclical swings, but in a world with structurally low growth we believe that sustainability and strong companies have a better opportunity to generate returns than the average sector peer.
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 Sverige Aktiv Hållbarhet offers a concentrated portfolio of carefully selected Swedish shares, which means the potential to obtain better returns than the index. The fund invests with a focus on large and medium-sized businesses.
The fund is permitted to use derivatives and the net asset value of the fund may fluctuate considerably. The fund is intended for investors seeking active management of Swedish equities and with an investment horizon of at least five to seven years.