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Carnegie Strategifond is not a traditional mixed fund

A traditional mixed fund normally consists of 60 percent equities and 40 percent bonds. The idea is for the bonds to provide a stable return and a rise in value during troubled times when the shares fall. Carnegie Strategifond is not a traditional mixed fund.

The fund invests in equities and bonds that provide high and stable returns. Since safer government bonds at best provide a zero return, the fund invests in higher-risk corporate bonds. To avoid an excessively high level of risk, the idea is that the distribution between equities and corporate bonds should be approximately 50/50. For a long time, the conditions for equities have been unusually good and we have therefore considered it justifiable to allow equities to form a larger part of the portfolio.

The fund’s investments in both equities and corporate bonds have performed well over the past year, but as should be the case when risk investments are rewarded, equities have risen more in value. As a result, the fund consisted of almost 70 percent shares at the beginning of August. In order to reduce an unusually high level of risk for the fund, and create scope to take advantage of any price declines during the autumn, the share of equities was adjusted down to below 65 percent in August.

This adjustment has taken place through sales in most shareholdings, but it is worth mentioning that Alfa Laval was divested entirely after good gains. Parts of the sale proceeds have been invested in green bonds issued by Bewi and Öyfjellet. Bewi develops packaging, component and insulation solutions with low environmental impact. The bond has an interest rate of just over 3 percent. Öyfjellet is Norway’s single largest wind farm, where production is sold under a 15-year agreement with Alcoa, which has undertaken to buy 90 percent of the production in order to be able to convert its nearby smelter to renewable energy. The five-year bond carries an interest rate of approximately 3 percent.

In previous monthly comments we have noted that the investment companies have been significantly re-valued upward. The large holdings in Investor have therefore had a significant positive effect on the fund. However, Investor is still traded at a discount, unlike most other investment companies. There was a downward correction of the share prices for investment companies in August, in many cases justified. Despite its discount, Investor was also impacted. Considering the company’s distinguished track record, we believe that the share’s discount can be questioned, especially since many other industry colleagues are trading with a premium. We see it as positive that it is possible to again buy Investor with a discount of just over 15 percent.

In connection with last year’s listing of residential real estate company John Mattson, the fund entered as an anchor investor. The share had a particularly good performance in August, driven partly by generally increased interest in real estate companies, and partly positive press. During the summer, two Stockholm-based real estate companies, HEFAB and IFAB, were acquired, and their project portfolios add growth opportunities. In addition, the acquisition price appears to be relatively low. John Mattson’s property management profit doubles and the property value is expected to increase from SEK 8.7 billion at June 30 to SEK 14.4 billion at October 1.

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Strategifond A

Carnegie Strategifond is also available in the following share class: G (pays dividends each quarter). Carnegie Strategifond is a total return fund investing in Nordic securities with attractive yield, both...

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