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Before making any final investment decisions, please read the prospectus, its Annual Report, and the KID of the relevant Sub-Fund here
Likviditetsstrategi advanced by 0.46% during August. Since year-end, the NAV per share has consequently increased by 3.05%.
The financial markets and risk appetite for equities and corporate bonds continue to dance to the tune of the US fixed income market. In August, the US 10-year market yield rose to 4.35 percent, the highest level since 2007. Consequently, stocks traded weakly and credit spreads widened, albeit marginally.
The higher interest rate level is mainly explained by an increased bond supply from the Fed and an increased need for borrowing by the US government, together with a downgrade in the US credit rating. The continued strong US economy and a strong labour market obviously contribute to higher market interest rates. The market is now divided into whether we have seen the last hike from the Fed or whether another hike remains.
While the U.S. economy is showing strength, things look darker for industrial-heavy Germany, Sweden and China. Overall, the trend of falling inflation is intact but at a possibly lower pace, which means that the higher interest rates may persist longer than many had hoped for.
Our assessment is that we are at or very close to an interest rate peak, which means an attractive entry point for investments in fixed income instruments. If, after all, we see a faster drop in global growth than is currently priced in, credit spreads may increase somewhat, while market interest rates should then fall and thus contribute some buffer.
The credit management company B2 Holding was among the month's major contributors after the company released a strong quarterly report that exceeded expectations. B2 increased both turnover and operating profit by approx. 20%, the leverage ratio was unchanged and remained among the lowest in the sector. Bonds from the insurance group Sampo developed positively after the company reported a stronger-than-expected result thanks to high premium growth and good margin development. A positive contribution was also received from Heimstaden Bostad after the company launched a buyback offer for parts of its outstanding bonds. The fund participated in the offer and the entire holding of bonds from Heimstaden was sold.
Negative contributions were mainly seen from Samhällsbyggnadsbolaget i Norden. SBB announced that they have completed a transaction in which the company will receive just over SEK 2 billion through a co-investment in the company's residential properties. Although the transaction was a step in the right direction, it was not enough to convince the market and distrust of SBB and its ability to handle debt maturities over the next year increased significantly. The last of the fund's holding of bonds from SBB was sold during the month.
During the month, bonds from the security and surveillance company Securitas were added to the portfolio, investment contributes to increased risk diversification and the company is valued primarily for its safe earnings and stable cash flows. After completed acquisitions, Securitas is expected to be able to improve margins in the coming years through increased technology content, which is estimated to be able to strengthen the company's credit profile.
Portfolio Manager of Coeli Likviditetsstrategi
Portfolio Manager of Coeli Likviditetsstrategi
| Inception Date | 2010-05-01 |
| Management Fee | 0 % |
| Performance Fee | Yes |
| Risk category | 2 of 7 |
DISCLAIMER. This is a marketing communication.
Before making any final investment decisions, please refer to the prospectus of Coeli SICAV I, its Annual Report, and the KID 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.