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Catella Sverige Aktiv Hållbarhet

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.

The fund's positive contributions relative to the market came from low weightings in index-heavy companies like Nordea, Handelsbanken and Epiroc, as well as the position in Telia, which bucked the trend and rose this month.
Anna Strömberg, 2018-10-31

Fund manager comment

The fund's biggest overweight at sector level has long been the industrial sector, which we have viewed positively. We are now seeing a change in tone from these companies on both future growth and the ability to offset cost inflation. In addition, there is still a clear tendency towards negative interpretations in the market. Consequently, we have reduced our weighting in the sector and have instead upped it in banking. We still have distinct cyclical elements in the portfolio but are balancing these with relatively high cash, a high proportion of telecom operators and a lesser emphasis on short-cyclicals than previously.

The Swedish stock exchange fell heavily in October, driven by concerns about rising interest rates, cost inflation and an escalation of the trade war resulting in weaker Chinese growth. Companies published their third-quarter reports this month. Overall, sales figures came in line with expectations, but margins offered some disappointments. Wage inflation, and rising costs for raw materials and freight are hampering profitability, and companies are finding it challenging to offset these through price hikes. Concern that the best of the economic cycle is behind us led to sharp falls in share prices. Catella Sverige Aktiv Hållbarhet fell 8.7% this month, while the overall market fell 7.2%.

The positions in the industrial sector have hampered fund performance this month, with Outotec, Veoneer, SKF and Volvo, in particular, making negative contributions. Outotec announced a risk of additional costs in an already-troubled project. The scant information and the magnitude of the project led the market to rapidly up the risk of a share issue, resulting in a steep fall in the share price. Veoneer, a supplier to the automotive sector, was at the centre of the storm. Automotive production has been showing weakness for some time, and lots of investors pressed the sell button when the company announced higher near-term investment and a postponement of its growth target in conjunction with its interim report. The tendency towards negative interpretations was made especially clear when SKF and Volvo fell steeply on their reports despite numbers that were in line with/better than expectations.

The fund's positive contributions relative to the market came from low weightings in index-heavy companies like Nordea, Handelsbanken and Epiroc, as well as the position in Telia, which bucked the trend and rose this month.

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 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.

Historical development

Fund manager

Sweden

Anna Strömberg

Fund manager / Sustainability Manger
Direct: +46 8 614 25 76
Sweden

Henrik Gripenvik

Fund manager
Direct: +46 8 614 25 56
Sweden

Henrik Holmer

Fund manager
Direct: +46 8 614 25 28

Risk information

Investments in fund units are associated with risk. Past performance is no guarantee of 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. The Catella Balanserad, Catella Credit Opportunity and Catella Hedgefond funds are special funds under the Swedish Alternative Investment Fund Managers Act (SFS 2013:561) (AIFM). Catella Sverige Aktiv Hållbarhet and Catella Småbolagsfond may use derivatives, and the value of the funds may vary significantly over time. The value of Catella Sverige Hållbart Beta may vary significantly over time. Catella Avkastningsfond may use derivatives and may have a larger proportion of the fund invested in bonds and other debt instruments issued by individual national and local authorities and within the EEA than other investment funds, in accordance with Chapter 5, Article 8 of the Swedish Investment Funds Act (SFS 2004:46). Catella Nordic Long Short Equity and Catella Nordic Corporate Bond Flex may use derivatives and may have a greater proportion of the funds invested in bonds and other debt instruments issued by individual national and local authorities and within the EEA than other investment funds. For more details, complete prospectuses, key investor information, and annual and half-yearly reports, please refer to our website at catella.se/fonder or phone +46 8 614 25 00.

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