Before we review the performance of Catella Nordic Long Short Equity we would like to start by saying that Martin Nilsson and Ola Mårtensson have now managed the fund for three years. Three years is an important milestone for fund evaluators and analysts so it is therefore particularly pleasing to sum up this period. Catella Nordic Long Short has generated +29* percent compared to +18.7* percent for the Stockholm stock exchange (SIXRX per 30 April 2018). This was at a standard deviation of 14.6* percent for SIXRX and 7.4* percent for Catella Nordic Long Short, and with a correlation of approximately 0.4*. "We are very pleased with our performance in terms of risk-adjusted returns, and we maintain our goal - to create a good risk-adjusted return regardless of the stock market climate," says Martin Nilsson.
At the time of writing, we are approaching 1.5 billion kronor in assets under management. This is partly down to our results, but it is also because of and increasing understanding of, and interest in, the advantages of the fund as part of a long-term investment portfolio. “A modern investment portfolio should have significantly larger elements of alternative funds than today’s norm. The aim is to contribute to a better risk-adjusted return and a calmer journey for the portfolio,” says Martin.
The start of 2018 has been turbulent and has involved everything from a trade war, rising volatility and interest rates to worries about inflation and growth. Quite simply, tough to navigate and choppy. From the start of the year until the end of April, Catella Nordic Long/Short Equity is up 5.9 percent. The main strategy has been to have long positions that will benefit from a continued strong global economy and the weakening Swedish krona. This includes companies like Boliden, Mycronic and Sandvik. Some of the most important holdings are also companies that have been part of the fund right from when we started to manage it. These include Aker ASA, Outotec and Storebrand. The holding in Aker ASA was purchased in 2015 at SEK 160 and has recently risen past SEK 500. The main contributors on the short side have been companies like Orkla, XXL, Citycon and Swedish banks. Large positive contributors during the stock market downturn in February also included our options hedging, which we gradually increased in the autumn of 2017.
“I believe there are still Nordic companies that are attractively valued and that will produce surprisingly good profits,” says Martin. On the other hand, there are several companies that are overpriced following a number of years of strong stock markets, and that have structural challenges that we believe will bring a significant risk of disappointing earnings. This market situation is perfect for a long/short strategy like Catella Nordic Long Short Equity. In conclusion, we would like to thank our clients for choosing us.