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.
Standouts at company level included Tomra, Autoliv and the underweight in H&M.
Fund manager comment
Catella Sverige Aktiv Hållbarhet rose 0.82% in May, compared with -0.11% for the Swedish stock market. Most of the gains came from the industrial sector, but durable goods also made a strong contribution. Standouts at company level included Tomra, Autoliv and the underweight in H&M. The main downside contributors were Lundin Petroleum, with the fund having no stake, plus Attendo and SKF.
European and US economic indicators were both generally somewhat softer than anticipated, but the purchasing managers index suggests continued growth going forward and US unemployment was down slightly. US global relations were back in the spotlight; the meeting with North Korea switched between on and off while the Iran deal was scrapped and sanctions were reintroduced. Plans for import tariffs on Chinese goods are still in place and the earlier exemptions for steel and aluminium from the EU, Canada and Mexico expire at the start of June. Uncertainty over the Italian election put pressure on interest rates and the US 10-year bond fell back below 3%.
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.