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 0.68% during February. Since year-end, the NAV per share has consequently increased by 2.88%. Hopes of further falling market interest rates met setbacks in February in the wake of increased concerns about more persistent inflation. Short term interest rates are now considerably much higher than the longer ones which is usually seen as a reliable indicator of looming recession. However, the economy in both the US and Europe has proved more resilient than many expected, which also keeps up inflation expectations and interest rates.
As far as Sweden is concerned, it looks tougher with alarmingly high inflation (ex energy) which shows no signs of plateauing yet. With high private indebtedness and a large proportion of variable mortgages, we must prepare for worse growth figures in Sweden than in many other countries.
Overall, the market continues to push the interest rate peak higher and further ahead. In the US, the interest rate peak has been moved up to July and is expected at the time of writing to land at 5.5 percent, while the peak in Europe is expected to land at 3.75 percent.
Despite higher market interest rates, risky assets held up reasonably well during the month. Credit spreads, which previously moved in tandem with market interest rates, were generally stable, which could be seen as a sign that fears of an impending recession in the US and Europe are beginning to subside.
The biggest contributor of the month was Castellum whose bonds rose after the company announced a larger, fully guaranteed, rights issue. The issue aims to strengthen the company's credit profile and give room to continue running development projects.
Bonds from other property companies also developed strongly with solid contributions from, among others, Heimstaden AB and Samhällsbyggnadsbolaget i Norden, whose year-end reports were well received by the market. SBB reported weaker figures overall, which was in line with expectations. At the same time, further possible measures to reduce the company's indebtedness were presented. Together with the property sales that were made during the fall, which have not yet had full effect, the company is expected to continue to meet the requirements for a maintained credit rating during the spring. In addition to falling asset values, Heimstaden Bostad showed relatively stable key figures. In addition, a new issue was announced where existing owners support the company with new capital in order to buy back bonds and reduce outstanding debt.
Positive contributions were also received from the (re)insurance company SiriusPoint after the company reported an improvement in earnings during the fourth quarter. The company's strategic restructuring with less exposure to reinsurance risk continues, which is expected to lead to more stable profit development in the coming years.
Negative impact on the month's results came mainly from the education company YrkesAkademin. During February, the company was forced to renegotiate the loan terms with the bondholders. This is because of a strained liquidity situation and dim prospects for 2023 as a result of lower demand for the company's training courses from the Swedish Employment Service Agency.
During the month, new investments were made in the packaging manufacturer Billerud and Scatec, a developer and producer of renewable energy. Divestments took place of bonds from Corem and Catena, thereby reducing the fund's exposure to real estate companies.
Portfolio Manager of Coeli Nordic Corporate Bond Fund
Portfolio Manager of Coeli Nordic Corporate Bond Fund
| 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.