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This material is marketing communication
Before making any final investment decisions, please read the prospectus, its Annual Report, and the KIID of the relevant Sub-Fund here
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Nordic Corporate Bond Fund (Class I) advanced with 1.18% during November. Since year-end, the NAV per share has consequently decreased by 8.62%. The positive tone during the reporting period was strengthened in November, driven by weaker inflation in the US and with it hopes for a calmer pace from the world's central banks. The appetite for risk spilled over into both the stock market and the credit market, where credit spreads declined from their peak in September.
November also showed clear signs and hopes that the Nordic credit market is beginning to thaw. Credit spreads decreased and the primary market came to life. The Swedish market is characterized, and will be until 2023, by the challenges of higher financing costs in the real estate sector, which also affect other issuers and sectors.
As expected, the Riksbank raised the key interest rate by 75 basis points to 2.50 percent and announced that the bond purchases will end at the end of the year. The announcement, although expected, was interpreted as soft and reactions to interest rates and the currency were minimal. The interest rate path indicates a peak of around 3 percent, where the Riksbank forecasts that it will remain until the second half of 2025.
Overall, hopes are now high for softer tones from central banks which could mean higher volatility should we see a setback in inflation data or more hawkish central banks than expected. Even with this taken into account, the Nordic credit market currently offers good investment opportunities with historically high risk premiums in both the primary and secondary markets.
Real estate companies generally developed strongly during the month after several Swedish companies presented credit-positive news such as property sales, suspended dividends and capital injections. The biggest positive contribution to the portfolio came from the property companies Samhällsbyggnadsbolaget i Norden, Balder and Castellum. During the month, the two former carried out repurchases of bonds in the market, while Castellum presented a new financial policy and announced suspended dividends for next year. The buybacks are done partly to take advantage of the currently depressed bond prices and to reduce the amount of outstanding bonds maturing in the next two years. SBB also announced a major transaction in which the company sells half of its Nordic portfolio of school properties.
Solid development was also seen for subordinated bank bonds with positive contributions from Nordea and Danske Bank. Nordic banks are well capitalized and show good profitability with low credit losses. During the third quarter, it was clearly seen that the banks are benefiting from the rising interest rates, this trend is expected to continue in the coming quarters and support banks’ earnings development.
On the negative side bonds from the insurance company SiriusPoint were found. The company's quarterly report showed losses in the seasonally weak third quarter. Compared to the previous year, however, a noticeable improvement in profitability is noticeable and the company announced further measures to strengthen profitability and reduce fluctuations in earnings.
During the month, the mining company Boliden was added to the portfolio at the same time as bonds from Seapeak LLC were divested.
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Coeli Nordic Corporate Bond Fund
| Performance in Share Class Currency | 1 Mth | YTD | 3 yrs | Since incep |
| Coeli Nordic Corporate Bond Fund - I SEK | 0.41% | 4.86% | 9.63% | 23.96% |
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Gustav Fransson
Portfolio Manager of Coeli Nordic Corporate Bond Fund
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Alexander Wahlman
Senior Analyst
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Fund Overview
| Inception Date | 2014-06-18 |
| Management Fee | 0.5 % |
| Performance Fee | N/A |
| Risk category | 3 of 7 |
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Top Holdings (%)
| WHITE MOUNT FRN 17-22.09.47 | 4.2% |
| NORDEA HYP 1.0% 19-17.09.25 | 4.1% |
| SWEDBK 1.0% 19-18.06.25 | 3.7% |
| B2 HOLDING FRN 19-28.05.24 | 3.5% |
| LANSBK 1.25% 18-17.09.25 | 3.3% |
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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 KIID 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.
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