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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 Investment Grade advanced by 0.47% during February. Since year-end, the NAV per share has subsequently increased by 0.91%. The positive sentiment in the stock markets weakened in February when software companies came under pressure as the rapid development in AI is expected to lead to lower demand. The leading indices in the US fell back while European stocks rose slightly. In the credit markets, the outcome was subdued with moderately rising spreads on both sides of the Atlantic.
The economic statistics from the US were mixed during the month, the labour market developed stronger than expected while inflation came in lower than analysts' forecasts. In addition, GDP growth for the fourth quarter was reported at a lower level than predicted. The same pattern was seen in Sweden, with lower growth than expected and inflation figures that once again came in lower than expected. The outcome led to rising expectations that the Riksbank may lower interest rates further during the year.
At the end of the month, Israel and the US began a coordinated bombing campaign against Iran, targeting strategic military installations and the leadership of the regime. Iran responded with attacks on Israel and several countries in the region and declared that the Strait of Hormuz is closed to shipping. The acts of war and the increased uncertainty in the region caused energy prices to rise sharply, which resulted in an abrupt break in the downward trend for longer market interest rates.
The month's results benefited from falling market interest rates, which contributed to positive value development for fixed-rate bonds in both SEK and EUR. Among individual companies, the largest contribution came from Sveafastigheter, which presented a solid annual report. The company is growing at a good pace and, thanks to lower costs, the operating margin improved. Sveafastigheter continues to focus on improving its credit profile. For almost a year now, the company has had a positive outlook on its rating - at the turn of the year, most of the requirements for an upgrade were met.
Among other reporting companies, very strong figures were noted for Hoist Finance, with rising profits and higher return on equity. Hoist announced in connection with the report that they meet the requirements to be regulated as an SDR company, which entails lower capital adequacy and higher investment capacity.
The market's reception of the annual report from Corem Property was lukewarm, after an eventful quarter, mostly unchanged key figures were reported. Net leasing was positive, but vacancies remain at a high level - overall, developments are going in the right direction, but the company and its management still have a long journey ahead of them.
During the month, subordinated bonds from Telia and Hemsö Fastigheter were added to the portfolio. In addition, the holding of covered bonds from Nykredit and Nordea Hypotek was increased.
