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A Danish hearing specialist

The last month of 2019 offered no major surprises. There was a highly anticipated decision from the Riksbank to raise interest rates by 25 basis point to 0 percent in December, taken against a background of unchanged outlooks for the economy and inflation. The interest rate path is expected to be flat, which means interest will remain at zero for the next few years.

The first half of December saw some continued activity in the market in the form of primary transactions that had to be made before the slowdown ahead of Christmas and New Year.

The fund participated in an issue from Danish GN Store Nord, which manufactures communication solutions such as wireless speakers and headsets (GN Audio) as well as equipment for the hearing impaired (GN Hearing). The company distributes its products globally and several mega trends suggest that its products will remain in demand. The proportion of elderly people in the population is rising and noise pollution is leading to more hearing damage, and the market is still relatively under-penetrated.

Aside from this issue, only a few minor purchases were made, including Heimstaden Bostad, Storebrand and Kraftringen. It was announced this month that Folksam and KPA will become shareholders in Heimstaden Bostad, which strengthens the ownership structure and contributes positively to its journey towards BBB (currently BBB-). Otherwise, no major changes were made to the portfolio.

Carnegie Investment Grade is a fund focused on Nordic corporate bonds with high credit ratings. We are in a low interest rate environment, which of course poses a challenge, but strong and stable companies that have a sustainability focus are an attractive combination, and we see sound prospects to achieve a good return over time.

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