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Likviditetsstrategi advanced during April with 0.18 percent. Since year-end, the NAV per share has consequently increased by 1.12 percent. April was another positive month for risky assets, strongest development was seen in the US while European markets were slightly weaker for both equities and credits. The strong development slowed down during the last two weeks when the focus shifted from expectations of further fiscal stimulus in the US to that the stimulus also is to be financed through increased taxes.
The ship leasing companies Ocean Yield and SFL (formerly Ship Finance) were also this month found high on the list of positive contributors. During the month, SFL issued a sustainability-linked bond where the proceeds will be used for investments in new tonnage with alternative fuel sources with significantly lower emissions.
Bonds from the real estate company Heimstaden AB and Heimstaden Bostad (the group's operating company) also developed strongly, Heimstaden Bostad presented a quarterly report that showed strong growth after completed acquisitions, the real estate portfolio is now valued at approximately SEK 180 billion and the company is thus one of the Nordic region's largest real estate companies. The acquisitions have been made with the support of share issues and the loan-to-value ratio has thus been reduced slightly to just under 50 percent.
The absolute majority of the fund's interest-bearing holdings gave positive return contributions. One of the few exceptions was subordinated bonds from Balder that were added to the portfolio during the month.
Bonds from Golar LNG Partners were redeemed early during the month and were repaid at nominal amount after the company was acquired by New Fortress Energy. Divestments were made of bonds with longer maturities from SCA and ICA Gruppen, both of which left the portfolio.
During the month, the US Federal Reserve (Fed) left the target interest rate unchanged in the range of 0.0 - 0.25 percent. The Fed also announces that it will continue with support purchases of $ 120 billion a month. The economic recovery is still said to be far from complete and the concern the market has previously expressed about rising inflation is said to be of a temporary nature, hence the Fed's unwillingness to slow down the monetary stimulus. Unemployment figures for March showed a continued economic recovery as unemployment fell to 6.0 percent and employment rose by 900,000 during the month. These figures were significantly better than market expectations of 650,000 new people in employment.
The European Central Bank also left interest rates and asset purchases unchanged during the month. Eurostat's report on the inflation rate in the euro area showed an annual rate of 1.3 percent in March, which was in line with analysts' expectations. EU reports show that most EU countries will have enough vaccines to vaccinate a majority of the population by the end of June. This is significantly earlier than the EU's official target of 70 percent by the end of the summer. On the climate front, EU countries have now also agreed to reduce carbon dioxide emissions by 55 percent by 2030 compared to 1990, the previous target was a 40 percent reduction.
Like the ECB and the Fed, the Swedish Riksbank left the target interest rate unchanged at 0 percent. The Riksbank also indicated that further purchases of SEK 2 billion in the corporate bond market will take place during the third quarter. During the month, the National Institute of Economic Research published an updated analysis in which they revised GDP growth to 3.7 percent in 2021 from the previous 3.2 percent. Underlying this is the vaccination that is expected to support household consumption during the second and third quarters.
The European and Nordic credit markets showed slightly declining credit spreads during the month in both the high-yield and the investment-grade segments. Stibor 3-months was noted at -0.03 percent. The Swedish ten-year government bond was quoted at the end of the month to 0.41 percent and has thus risen 3 basis points during the month. The US ten-year government bond was quoted at 1.65 percent the end of the month.
Portfolio Manager of Coeli Likviditetsstrategi
Senior Analyst
| Inception Date | 2010-05-01 |
| Management Fee | 0 % |
| Performance Fee | Yes |
| Risk category | 2 of 7 |
DISCLAIMER. The information provided here does not constitute professional financial advice. Past performance is not a guarantee of future returns. The price of the investment may go up or down and an investor may not get back the amount originally invested. The key investor information document (KIID) and prospectus are available at www.coeli.se.