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.
In general, the companies have presented strong reports, however, the price reactions to the reports have in many cases been cautious.
Fund manager comment
The fund was up +0,79 % which was less than benchmark index SIXRX that was up by +2,5 %. The largest negative contribution relative to the index was the non-holding in EQT, a share which rose by +24% in connection to its quarterly report and has a heavy weight in the index. Holdings in Vestas Wind, ÅF Pöyry and Sweco also contributed negatively. Vestas was last year's winner and has started the year down and we have taken profit in the share by decreasing our weight and instead increased our weights in Lindab and Inwido. Positive contribution came from SSAB which presented a quarterly report that widely beat the market's expectations (46 percent better on EBITDA) driven by stronger volumes and hence better capacity utilisation. The company also announced that they had ended discussions with Tata Steel regarding a possible acquisition of a its steel mill IJmuiden. We regard this as positive as an acquisition of IJmuiden would have changed the view of the company as the carbon dioxide footprint would have increased dramatically while there was a considerable risk that the company's sustainability goals would have been pushed out in the future.
The Stockholm Stock Exchange had the strongest development among the Nordic stock markets and rose by 2,5 percent (SIXRX) during the month. Denmark and Norway both showed negative performance.
During the end of the month, the reporting season for the fourth quarter has started. In general, the companies have presented strong reports. This is primarily driven by a good cost control and hence strong margins. Despite this the share price reactions have in many cases been muted. This could be viewed as rather surprising as the forward-looking statements have been good combined with higher dividend pay-outs than anticipated.
In relation to our outlook for the year we have optimistic expectations for a gradual recovery in the global economy. This assumption is based on that the continuing global vaccination is 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 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.