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Before making any final investment decisions, please read the prospectus, its Annual Report, and the KIID of the relevant Sub-Fund here
Nordic Corporate Bond Fund (Class R) detracted with 5.57% during June. Since year-end, the NAV per share has consequently decreased by 9.03%. During June, risk appetite weakened significantly with continuously falling prices for most risky assets. The investor collective now seems to be worried that the tightening of monetary policy that is now taking place on a global basis will lead to an economic recession. In the corporate bond market, relatively large declines were noted as a result of significantly higher credit spreads, while short-term market interest rates continued to rise.
The Nordic credit market developed significantly weaker than the broader European market. Thus, the pattern of the Nordics lagging around larger market movements was repeated. Activity in the primary market was limited with few issues, secondary market trading was characterized by limited risk appetite and increased spreads between bid and ask prices. The price declines seem to have attracted some more opportune investors who helped to stabilize the market towards the end of the month.
During the month, real estate companies had by far the worst development with what in many cases must be described as imploding bond prices. Samhällsbyggnadsbolaget i Norden, Balder and Heimstaden Bostad are examples of companies with large volumes of outstanding Eurobonds that ended up in the line of fire when European investors seem to have completely lost confidence in how these companies will be able to handle increased financing costs in the coming years. There is no doubt that tougher conditions await the real estate companies, but the larger companies' often long capital and interest rate fixing means that it takes time before the higher interest rates have full effect. With existing cash, granted credit lines in banks and current cash flows, the larger companies can also cope with a period with a closed bond market.
Except for a few less traded bonds, in principle all of the fund's holdings had a negative impact on the month's result. Besides the real estate companies, the largest declines were seen for relatively liquid high-yield bonds from Millicom and Intrum, among others.
During the month bonds from Klaveness Combination Carriers, United Camping and AFRY, were sold. Exposure towards the digital gaming developer Stillfront was increased. Exposure to real estate companies was reduced by about one percentage point and amounted to just over 15% at the end of the month.
Portfolio Manager of Coeli Nordic Corporate Bond Fund
Senior Analyst
| Inception Date | 2014-06-18 |
| Management Fee | 0.5 % |
| Performance Fee | N/A |
| Risk category | 3 of 7 |
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Before making any final investment decisions, please refer to the prospectus of Coeli SICAV I, its Annual Report, and the KIID of the relevant Sub-Fund. Relevant information documents are available in English at coeli.com. A summary of investor rights will be available at https://coeli.com/regulatory-information-coeli-asset-management-ab/.
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.