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 with 1.08% during August. Since year-end, the NAV per share has consequently increased by 5.98%.
We are putting another month of low volatility in the credit market behind us. Market interest rates fell here at home, in Europe and in the US. The US Federal Reserve delivered a long-awaited cut of 50 basis points, while the Riksbank and the ECB cut by 25 basis points. With continued falling inflation, weak economic activity in Europe and question marks over the US economy, there are high expectations for continued rapid interest rate cuts.
Considering the uncertainty regarding the economy, the geopolitical situation and the upcoming election in the United States, it is rather surprising how strong the risk appetite still is. Several equity indices passed all-time highs in September and credit spreads of both high yield and investment grade are low from a historical perspective. At the same time, falling market interest rates provide stability for the credit market, and corporate bonds tend to perform well during periods of falling inflation and orderly declining interest rates.
Real estate companies developed strongly this month as well, interest rates continued to fall and several bond issues were priced at favorable levels for the issuers. Castellum issued bonds in euros for the first time in two and a half years, the issue was met with great interest and was oversubscribed several times. Akelius Residential strengthened its liquidity by divesting shares in Castellum, where the company was a shareholder for about two years, in order to repay maturing debt. CIBUS, with a focus on properties for grocery stores, also contributed positively after the company carried out a targeted share issue with the aim of enabling growth through further property acquisitions.
Positive impact on the month's results also came from covered bonds, which benefited from falling market interest rates. Bonds from Hoist Finance performed nicely after the company had its rating raised by one notch to Baa2 by Moody's.
During the month, there was high activity in the primary market and the fund participated in several new issues: Hawk Infinity Software, Storskogen, Sensys Gatso and MPC Container were companies that were added to the portfolio. In addition, the holdings of bonds from B2 Impact, Vattenfall and Heimstaden were increased. Divestments took place of bonds from Magnolia and PHM Group. Overall, the changes contributed to increasing the proportion of high-yield bonds and to maintaining a relatively high average yield in the portfolio.