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.
Macro data showed a mixed development during the month while reports for the third quarter in general proved operational strength from the companies.
Fund manager comment
In October the world's equity markets declined after an accelerated spread of the virus. We are now in a second wave of lockdowns and uncertainty as a consequence. The presidential election and the outlook for a new stimulus package contributed to the uncertainty. Macro data showed a mixed development during the month while reports for the third quarter in general proved operational strength from the companies.
The Stockholm Stock Exchange fell the most of the Nordic bourses as SIXRX declined -5,94 percent. Catella Sverige Aktiv Hållbarhet declined 6,67 percent which was more than its benchmark. The holding in ÅF Pöyry was down significantly in connection with the company's quarterly report which showed a weaker development than anticipated in many of the company's important segments and it did not succeed in meeting the high expectations of the market. A small ray of light came from the comment that the trend had turned at the end of the quarter. The holding in SOBI also impacted performance negatively after disappointing news on the companies' development of new products. The non-holding of shares in Ericsson and Evolution Gaming impacted the relative performance negatively. The best holding in the fund was Vestas Wind Systems which rose in connection with the news that the company acquires Mitsubishi's share of the Joint Venture the companies have together. Furthermore Arjo had a strong development before the capital markets day that the company had at the beginning of November.
More and more countries including Sweden have imposed restrictions of different levels of strictness which will lead to certain slowdown of economic activity. A total lockdown that we saw this spring is not probable, most likely are temporary regional lockdowns. This however leads to continued uncertainty and difficulty for companies and consumers to have visibility going forward. On a positive note is that companies have delivered good quarterly reports for Q3 and have shown quick recovery and in many cases pent up demand from the consumer.
As of the time of writing we are in the middle of the vote count of the US presidential election where the most probable outcome is that the US will have a president without the full support of the congress and there may be a lengthy legal battle in case of a close race and where the losing candidate may not acknowledge the loss. This shows that is will be more difficult for the next president to get through with bigger changes and a continued period of uncertainty. Probably we will continue living in a low rates environment.
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.