Close

The primary market started moving when Teekay LNG, Kistefos and Heimstaden Bostad issued

The global trend has continued on the well-beaten path with the ongoing pandemic, less economic anxiety after moderate improvements in leading indicators, and companies and individuals still adjusting to a new reality. Although the virus is breaking out again in several places, there are daily reports of progress in the quest for a vaccine.

Combined with Q2 reports that exceeded expectations and the sustained support from central banks, this is driving global stock exchanges towards record levels. Once again, risk appetite reflects FOMO/TINA, but considering the discrepancy between financial markets and real economic development, it makes sense to think again about what will happen in the future when the support programmes are gradually phased out.

The gradual recovery over the summer, which continued during the month, was partially the result of a shortage of materials and primarily impacted companies with higher credit scores or high yield companies that clearly benefited from the spread of the virus. This has created a relatively large discrepancy compared to other Nordic high-yields, where investors have waited for the Q2 report cards before they were willing to buy the bonds. When the reports were released in August and the majority outperformed expectations, risk appetite returned and the market was traded up substantially. However, the question remains as to what will happen to margins when furlough support and deferred employers’ social security contributions have to be paid.

The primary market started moving when companies including Teekay LNG, Kistefos and Heimstaden Bostad issued. The new issues were made at levels that drove prices in the secondary market and we have reduced the exposure to names that delivered outstanding performance in the summer, including Volvo and Nokia. Following a two-year run-off period, we have also sold the last commercial gambling exposure in the fund after a strong price upturn in Catena Media.

The fund continued to recover and rose during the month by 1.62 percent, which lowered the downturn for the year to -3.64 percent.

Last year, we saw excellent risk appetite and strong fund inflows push credit margins down to record-low levels. The spread of Covid-19 is generating profound uncertainty and although we have seen recovery to a certain point, credit margins remain at attractive levels. We are, however, maintaining our conservative approach with a balanced and diversified portfolio with focus on liquidity. We will continue to focus on sustainable companies, which we are convinced are going to contribute to long-term returns.

More about the fund

Corporate Bond 3 SEK

Grafen ovan visar data för Carnegie Corporate Bond 3 (SEK). Carnegie Corporate Bond finns även i andelsklasserna: 3 (NOK), 3 (EUR), 1 (SEK med kvartalsvis utdelning), 1 (EUR) samt 3 (CHF)....

More info
Buy fund

More articles

Reason to be active in the secondary market
Carnegie Corporate Bond

Reason to be active in the secondary market

July was largely characterised by summer heat in the credit market. Risk assets generally rose on better risk sentiment, albeit at a slower pace than before. The gradual improvement in...

Niklas Edman 4 August 2020
Fund trading suspended

Fund trading suspended

The prevailing exceptional market turmoil has led to uncertainty in the pricing of corporate bonds. Carnegie Fonder has therefore decided to suspend trading in the funds that invest in corporate...

Erik Amcoff 20 March 2020
More cash and focus on liquidity
Carnegie Corporate Bond

More cash and focus on liquidity

February began strongly, with increased risk appetite. Stock exchanges widely rose after a somewhat weaker end to January. However, sentiment swung sharply in the last week of February after news...

Maria Andersson 4 March 2020