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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
Note that the information below describes the share class (R SEK), which is a share class reserved for private investors. Investments in other share classes generally have other conditions regarding, among other things, fees, which affects the share class return. The information below regarding returns therefore differs from the returns in other share classes.
Nordic Corporate Bond Fund (Class R) advanced 0.11% during April. Since year-end, the NAV per share has consequently increased by 2.47%. In April, for the first time this year, some volatility erupted in the markets. The increased turbulence in the credit market was primarily driven by the fact that inflation in the United States is not falling as many had hoped but has proved to be more persistent. Therefore, the US 10-year bond yield continued its upward journey to stand at 4.57 percent at the time of writing. The U.S. Federal Reserve emphasized during its latest meeting that inflation has also proven to be more persistent, but in any case, consider it unlikely that a rate hike is on the cards. The market is now pricing in a first rate cut in the US in December. On the positive side, it can be noted that many companies that have now reported have come in strongly, which underlines the resilience of the economy. If the positive sentiment is to be sustained, inflation in the US needs to soften in the period ahead.
In Europe, credit spreads initially rose and then fell back again. Credit spreads on high yield in Europe are currently at 312 basis points while spreads on investment grade are at 54bp. The investment climate in the Nordic corporate bond market continues to look upbeat, not least because there is a mark-up of about 200 basis points above European high yield bonds and about 50 basis points above for investment grade. The short duration, with a large proportion of floating rate notes in the Nordic region, is attractive in the current environment as companies pay high coupons while interest rate cuts are postponed. Given an uncertain world, we find most investment opportunities in the so-called crossover area, i.e. bonds with BBB/BB credit ratings.
Bonds from insurer SiriusPoint were once again the biggest contributor after posting a strong quarterly report at the end of the month. The underlying result improved compared to the previous year and the company's strategic shift continues to have positive effects. During the quarter, SiriusPoint carried out a refinancing of two bonds, which significantly will strengthen the company's solvency ratio. Solid development was also seen for bonds from the real estate company CIBUS, which reported a slightly rising income from property management at the same time as the value of the company's properties was written down slightly. During the beginning of the year CIBUS refinanced parts of its bond debt on favorable terms, thereby extending the maturity profile of its debt while reducing interest costs.
Bonds from Scatec, a provider of renewable electricity, rose in value after the company reported a higher-than-expected operating profit while the company revised up its full-year 2024 forecast. After a couple of years of headwinds for new projects due to cost inflation and rising interest rates the growth prospects for Scatec now looks look significantly better. In the quarter, two solar parks were completed which increase the installed capacity by almost 20%, while construction of two new projects was started.
Heimstaden AB also contributed positively with support of the group's operating company which contrary to expectations, reported rising property values and a good pace in the privatization program where apartments are being sold to tenants.
Negative impact on the month's results was mainly seen in Bayport, whose bonds have been trading weak since the financial statements were presented in February. Despite low credit losses and moderately rising lending, the company is struggling with profitability due to squeezed lending margins and high borrowing costs. In addition, the result was generally negatively affected by fixed-rate bonds, which fell somewhat in value because of rising market interest rates.
During the month, bonds from Assemblin were divested and the hoplding of bonds from ViaCon was reduced. New investments was made in, among others, Home Services Group (HSG). With brands such as Hemfrid and Veterankraft, HSG is the market leader in household services in Sweden. HSG is appreciated for its stable revenue base where most of the revenue comes from subscribing private customers. The company's strategy involves continuing to consolidate a highly fragmented market.
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 |
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.
Please note that the management company of the fund may decide to terminate the arrangements made for the marketing of the fund in one or multiple jurisdictions in which there exists arrangements for marketing.