Strong month for credits

However, the recovery has not been at the same rate for all sectors. For example, in the real estate sector, which is diversified in terms of segments, buying interest has been more selective and the sector as a whole has experienced more modest development.

The Riksbank has continued its purchases of housing bonds, commercial paper and bonds issued by governments and local authorities, which of course provides support to the market. Discussions are also ongoing about the purchase of corporate bonds, but it remains to be seen exactly how this will happen.

“Overall, we are seeing a recovery”

Overall, we are seeing a recovery and can say that May was a strong month for credits. Carnegie Investment Grade rose 0.7 percent.

There were a number of changes to the fund this month. We increased our exposures to ICA, Arla and investment company Kinnevik, all of which are stable and have non-cyclical operations, and to Heimstaden Bostad, which we consider to be a defensive real estate company with housing exposure. We participated in an issue from SBAB, of a subordinated Tier-2 bond that pays STIBOR +210 basis points. We reduced our exposure in other parts of real estate, including in Kungsleden and Fabege, and closed our positions in Sagax and Hemsö. We also reduced in companies such as Scania, Ellevio and Hexagon.

We are at mid-year, and a major focus will be on the second-quarter reports to see the impact of the coronavirus and how companies have acted. Hopefully we will see an improvement in the situation, with increasingly stable markets. Despite the uncertainty, opportunities for attractive long-term investments do arise. Carnegie Investment Grade invests in well-managed, stable and sustainable companies. We prioritise a defensive and diversified portfolio, in line with our management philosophy.