Issues in Stockholm Exergi, SCA and Hexagon
The final month of the third quarter was relatively stable, but there was some volatility as concerns about a second wave of Covid flared up in various parts of the world. And sentiment turned somewhat weaker and more hesitant towards the end of September.
With the exception of some restraint towards the end of September, investor demand has remained strong and we have generally seen credit margins decline further. This is also reflected in the fact that there has generally been relatively substantial interest in the primary transaction market.
The Riksbank left interest unchanged at 0 percent, and it is expected to remain at this level in the next few years. The bank believes that, even if we see a recovery, the uncertainty will remain substantial and stimulus will be needed. One of the measures is the Riksbank’s purchase of corporate bonds, which began this month and amounted to SEK 300 million as of 28 September.
The primary market was active this month and the fund participated in issues from Stockholm Exergi, SCA and Hexagon. In real estate the fund took on issues from Humle and Compactor, the latter of which is a holding company that invests through its subsidiaries, the largest of which is FastPartner. Furthermore, the fund expanded its positions in real estate service company COOR and Tele2. The fund reduced its exposure to certain maturities in Akelius, ICA and Husqvarna. The performance of these names has been good since the spring’s turbulence, and we remain upbeat about these issuers despite reduced exposure.
The quarter ended with another positive month, and Carnegie Investment Grade chalked up a gain of 0.23 percent.
The autumn will bring the US presidential election and a continued focus on the spread of Covid. At this moment the sentiment seems cautious, but we still hope to see a stable autumn for the credit market. Carnegie Investment Grade invests in well-managed, stable and sustainable companies. We prioritise a defensive and diversified portfolio, in line with our management philosophy.