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.
Our holding in SCA also did well after the company released strong numbers and, in particular, announced that it intends to up the valuation of its forest assets from a book value of SEK 34 billion to an indicative range of SEK 63-67 billion.
Fund manager comment
The world’s stock exchanges rose in October, with the US market reaching an all-time high. This was despite weak macro statistics such as the US purchasing manager's index, which hit a new 10-year low. The combination of some positive signals in the trade talks and lower US interest rates outweighed the weaker macro statistics. In Sweden, we received quarterly reports from most companies, and overall there was a stable reporting period that was better than the market had expected. Commodities, engineering and IT were the strongest sectors, while real estate fell back slightly after a long period of gains.
The Stockholm stock exchange rose during October and SIXRX was up 3.98 %. Catella Sverige Aktiv Hållbarhet performed better than the index with an increase of 4.74 %. The fund received the best contributions from our new investments in Sweco and Mycronic, which both delivered strong quarterly reports. Our holding in SCA also did well after the company released strong numbers and, in particular, announced that it intends to up the valuation of its forest assets from a book value of SEK 34 billion to an indicative range of SEK 63-67 billion. Engineering companies generally had strong performance this month, which benefited the fund, although we lost in relative terms due to the underweight in Atlas Copco. Other negative contributions came from the holdings in JM and Tele2, which failed to keep up with the market despite fairly good reports.
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.