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Mores shares in Essity, Telia and Investor

Developments in the securities markets indicate that the world economy will recover relatively quickly. The massive support being implemented by governments and central banks is expected to have a long-term effect. At the same time, country after country is now easing restrictions, resulting in increased economic activity. Asian countries that are at the forefront of the process, including China, are now experiencing growth on both the demand and the supply sides. By contrast, there are worrying reports from the US that the virus is now accelerating at such a pace that restrictions are beginning to be reintroduced.

The corporate bond market has not been as quick to recover as the stock market, despite the steep falls in March. However, the rise in value in June indicates that the recovery is in full swing. There is still potential in this market if the negative effects of the pandemic are significantly reduced during the autumn and next year. The equity share is still around 60 percent. In June, the fund rose by 1.8 percent, which means that the decline so far this year has now shrunk to -8.6 percent.

The fund acquired additional shares in Essity, Telia and Investor in June. Essity has not really kept up with the recovery, which is hardly surprising since it is perceived as a defensive investment. Concerns about rising pulp prices have also played in. In the longer term, we believe that demand for its hygiene products will remain high for obvious reasons, and customer tolerance for higher prices has probably grown. In the short term, there is a risk of lower demand from some customers in the Professional Hygiene segment (restaurants, hotels, stadiums, etc), but this should be temporary. The share is traded at a P/E around 16-17, which seems low given the company’s stability and strong financial position. In addition, there are good opportunities to further increase earnings through acquisitions and cost savings. Telia is also defensive in nature. A new management that has proven itself elsewhere is generating expectations of a greater focus on shareholder value. Investor has a good portfolio that can be purchased at a discount of over 20 percent. Among other things, the fund sold shares in SSAB after a good upturn.

The fund has previously owned Cibus shares, but has now invested in two bonds issued by the company. Cibus is a well-managed real estate company with relatively low rent risk due to its exposure to the grocery trade. The bonds the fund invested in run for three years and return just over 4.5 percent.

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Since 2nd November 2017 Carnegie Strategy Fund is a feeder of Carnegie Strategifond, the master. The fund management is therefore identical. For more specific information regarding the master fund’s holdings, please visit...

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