Before making any final investment decisions, please read the prospectus, its Annual Report, and the KID of the relevant Sub-Fund here
Nordic Corporate Bond Fund (Class I) advanced with 0.24% during December. Since year-end, the NAV per share has consequently decreased by 8.40%. The increased risk appetite with rising share prices and falling credit spreads that characterized October and November encountered some setback when the ECB came out with a more hawkish forecast about the future development of interest rates. The ECB, as expected, raised the key interest rate by 50 basis points, but at the same time communicated that it was far from finished here, without further rate increases significantly. Much therefore speaks for further increases and that they raise by 50 points in February. There is thus a certain difference in the rhetoric between the FED and the ECB, where the former has communicated that it has reached a satisfactory level and that it will now be able to slow down. From a historical perspective, it can be mentioned that the ECB is usually three to six months behind the FED in rhetoric and direction.
European market interest rates rose after the ECB's press conference and credit spreads on European high yield increased by 69 basis points. Credit spreads on Nordic companies, on the other hand, did not move significantly. Credit spreads on Swedish high yield companies indicate levels of around 7.5 percent, which is more than 2.5 percent above European companies.
Much suggests that 2023 rather will be about how low growth will be and how a worse economy will affect the companies rather than fear of inflation and rising interest rates. We expect continued volatility in 2023, while the initial situation with high credit spreads is completely different compared to a year ago.
Real estate companies had a mixed development during December, with a relatively large difference between different companies than was previously seen during the autumn. Several companies reported property sales and new issues that are deemed to strengthen their creditworthiness. The biggest positive impact on the result came from the property company Balder, which carried out a targeted new share issue with the aim of repurchasing hybrid bonds. At the other end of the scale one found, SBB and Heimstaden, which recoiled after positive development during November.
Good development was also seen for the credit management company Intrum, which placed a larger bond loan in the market during the month. Although the company was forced to pay an interest rate of 10 percent, the issue was seen as successful as the interest from investors was solid and the company is now significantly strengthening its liquidity. Sector colleague B2 Holding also developed positively.
Negative impact on the result was mainly seen from Storskogen, whose bonds came under pressure after both Moody's and S&P cut their credit ratings on the company. The cuts were motivated by deteriorating economic prospects and challenges with refinancing upcoming debt maturities in 2024. Storskogen has previously communicated that they intend to lower their acquisition rate and focus on strengthening their balance sheet.
During the month, the fund participated, among other things, in the issue from Intrum. In addition, secured bonds from First Camp, Scandinavia's leading camping chain, were added to the portfolio.
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 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.