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Likviditetsstrategi advanced during May with 0.24 percent. Since year-end, the NAV per share has consequently increased by 1.36 percent. Moderate gains were seen in both the equity and the corporate bond markets. The development was supported by generally good earnings reports and hopes for a continued economic recovery. At times, the development was dampened by inflation concerns, which put particular pressure on so-called growth stocks. The inflation rate in most major economies is currently reported at relatively high levels, this is mainly explained by energy prices having returned to the same, or slightly higher, levels than were seen before the pandemic. However, the rise in inflation is judged to be largely transitionary and is expected to fall back later in the year.
The biggest contributor of the month was the reinsurance company SiriusPoint, which presented its first quarterly report since the merger between Sirius and Third Point. The report showed both an improved technical result and a very strong investment result.
The game developer Stillfront also contributed positively to the result after the company issued new four-year bonds and presented the result for the first quarter, which was stronger than expected. Stillfront continues to grow strongly through acquisitions, during the quarter three more game studios were integrated. As a result, leverage increased during the quarter, although still with a healthy margin towards the company's financial policy.
During the month, the real estate company Fastpartner received an investment grade rating from Moody's, which led to good performance for the company's outstanding bonds.
Minor negative contributions were seen from covered bonds, which were affected by marginally rising interest rates.
During the month, new investments were made in the real estate company NP3, the electronics distributor DistIT and the investment company Storskogen. The latter two primarily contribute to increased diversification in the portfolios. NP3 is considered to be interesting as a result of the focus on properties with strong cash flows in northern Sweden, primarily in the industry and trade segments. In recent years, the company has shown steady growth and a stable occupancy rate.
Vattenfall left the portfolio after the company completed an early repurchase of parts of the company's hybrid bonds. In addition, bonds from Hexagon, Nordic Entertainment Group and Svensk Hypotekspension were divested.
In the US, the big news this month was the employment figures that were significantly lower than expected. The outcome showed 226,000 new employees in the labor market, substantially below analysts' expectations in excess of 700,000. Despite this, higher inflation has continued to be a theme in the market during the month. The minutes from the FOMC showed that the members still believe the economy continue to be below normal levels, but that it may soon be time to start discussions about a reduction in asset purchases. It should be added that even if a decision is made to reduce asset purchases, monetary policy will continue to be expansive.
According to Eurostat, the inflation rate in the euro area rose to 1.6 percent in April. The outcome was in line with analysts' forecasts. For all EU countries, the inflation rate was 2.0 percent in April. However, it should be added that the core inflation (adjusted for, among other things, energy costs) was 0.9 percent at an annual rate, far from the ECB's target. The IFO index, which shows the business climate in Europe, was noted at the highest level since May 2019. At the same time, the index shows that the service sector has risen to the highest level to date during the pandemic.
In Sweden, Statistics Sweden published inflation data for April, where the CPI with fixed interest rates (CPIF) rose by 2.5% on an annual basis, which was slightly higher than analysts' expectations. The National Debt Office (Riksgälden) announced during the month that it intends to issue a 50-year government bond of SEK 10 billion. The intention is to extend maturity and reduce the interest rate risk in the Swedish central government debt. The bond is planned to be introduced during the summer.
The European and Nordic credit markets showed unchanged credit spreads during the month in both the high-yield segment and the investment-grade segment. Stibor 3-months was noted at -0.03 percent, which is the same level as at the end of April. The Swedish ten-year government bond was quoted at the end of the month to 0.41 percent. The US ten-year government bond was quoted at 1.58 percent the end of the month, which is slightly below end of April levels.
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.