Close

Focus on the secondary market

The year started with a continuation of the previous year’s strong sentiment, but quickly soured with US-Iran military tensions and the Chinese coronavirus spreading globally.

Although the future is impossible to predict, there is a risk that the impact of the virus will become more extensive as measures like factory closures are implemented to halt the spread. As an immediate gauge of sentiment, global long-term interest rates widely fell during the month.

In spite of a globally weaker risk appetite, the local Nordic credit market has not been significantly affected and has continued strengthen, with falling credit margins reinforced by both fund inflows and a clear supply shortage. Declining credit margins have long been a theme, mainly affecting debt traded on the European credit market. But as usual, it is the development of underlying holdings that continues to have the greatest impact on fund performance, and this is likely to remain the case.

Portfolio

The number of small and attractive high yield issues in the primary market was somewhat limited in January, so inflows were mainly allocated in the secondary market to existing names like Catena Media, CentralNic and B2 Holding.

Catena Media has therefore climbed into the top-10 and is now the second-largest holding in the fund, and is also one of the names that contributed most to the month’s return following a sharp increase in its bond price. Our holdings in the debt purchasing sector continued to make a significant contribution to returns, while a few other names are still making a negative contribution. Melin Medical’ bonds were traded down at the end of the month following a new bill in Norway limiting fees for the collection of small claims.

Carnegie High Yield Select rose 0.95 percent in January.

More articles

Important characteristics going forward: Long-term stance and patience
Carnegie High Yield Select

Important characteristics going forward: Long-term stance and patience

Events in March were about nothing other than the global spread of the coronavirus and its impact on both the real economy and risk sentiment. The effects of this have...

Maria Andersson 6 April 2020
The favourite is now the largest holding
Carnegie High Yield Select

The favourite is now the largest holding

  November took over from the previous month and continued the journey towards record levels on the stock exchange, and credit margins in Europe are now in line with levels...

Niklas Edman, Maria Andersson 5 December 2019
Long-awaited news from High Yield Select’s largest holding
Carnegie High Yield Select

Long-awaited news from High Yield Select’s largest holding

Global risk appetite was buoyed in October by improved US-China relations, while central banks remained willing to support the economy as economic signals point the wrong way. Sweden’s Riksbank is...

Niklas Edman 5 November 2019