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December: positive month and rise according to revised forecast for 2020

The NAV rate for December was 104.28, an increase of 0.43 (0.41 %) per month and a standard deviation of 0.92. We land the year according to a revised forecast and that is good. Now we look forward to 2021 with new healthy times.

 

New lending in December was approximately SEK 15 million.

 

NAV this month is affected by IFRS adjustment before the turn of the year as well as legal costs such as auditors, on the whole it is going well. We're a bit like the turtle and the hare. It goes faster for the hare, however, we also arrive at the same goal, however, at a slower pace and with significantly smaller fluctuations than the stock markets (the hare). We contribute to a higher risk-adjusted return if you have the fund as part of your portfolio. Our annual return of just over 4 % is only slightly worse than OMX 30 seen throughout the year.

 

We had a strong settlement in March and April was weak. Apart from that, the year has been stable. We have unfortunately been in a defensive situation and have not been able to capture the opportunities offered due to the large redemption that the fund has handled in 2020. In the light of that, I am very pleased with the results we have delivered and not least proud of our dedicated and very competent employees' efforts during the year. The skills that the team possesses are unique and it is a pleasure to work with them.

 

We are starting a new fund in 2021 that only invests in market-listed “High Yield” bonds, it has a unique structure. Available to read about on our website. It will be a good complement to SCF I. Furthermore, it will further broaden the team's competence regarding analysis.

 

We continue our work with extra frequent follow-up of our companies with regard to the Corona situation. The government does everything to make the wheels spin in as many industries as possible, the fund has no exposure to industries that are directly affected by shutdowns or restrictions. Our companies are not unaffected, it would be wrong to say that, but they are doing well on the whole.

 

This week, activity data came from Asia for December. You can see that they show growth in most places (over 50) even in countries that are hard hit by the virus. Of the larger countries, China shows strong figures and Japan increases significantly in December compared with November. We must not forget Asia when we look at global growth, and especially Swedish companies.

 

December: positiv månad och uppgång enligt reviderad prognos för 2020 19

 

We also received activity data from Sweden and it shows good growth in the industry. Furthermore, the activity index from the USA shows strong growth. In summary, the industry is doing well in Sweden and the outside world in general, it guarantees a continued robust recovery.

 

2020 has been a challenging year in many ways, not least on the human level. It is certain that many of you are directly or indirectly affected and we at the fund can only regret that. I hope that 2021 will be a year when we can return to a life without Corona. However, it will take a while before the vaccine has full effect on society, we simply have to do the best we can in the meantime.

The ultra-light monetary policy will continue well beyond 2021, it will keep risky assets under its arms for the foreseeable future.

A weaker US dollar provides support for developing markets, which is also good so that their economies can spin further out of Corona's influence. Bond yields have priced in a lot of growth, now it has to materialize. However, I would like to warn that when signs of inflation begin to appear, long-term interest rates can rise rapidly regardless of central bank purchases, this is not a major scenario in the near future, it may come into play in the second half of 2021.

The Democrats are also winning the Senate and it will potentially drive up long-term interest rates in the United States. Trump continues to do his best to keep up power by all available means. It's still a potential stink bomb if he somehow manages to fire on President Biden's installation in the White House. What happened around the Capitol shows what an extremely bad leader Trump is. Hope he's just a parenthesis in US history.

 

In the environment we have been in 2020, S&P has risen by about 16 %, and this is led by technology stocks. Below you can see the sector distribution that contributed to the rise in S&P. Who could have believed this in March when everything fell into place. There, the central banks have done a good job through their ultra-light monetary policy, now it is up to fiscal policy to continue to support companies and individuals who are particularly hard hit.

 

December: positiv månad och uppgång enligt reviderad prognos för 2020 20

 

I agree with many who are pushing for fiscal policy to support investments aimed at reducing CO2 emissions. It will then cover everything from mini-nuclear power plants of the fourth generation to water, solar and wind power plants. There are certainly other sources as well, but Sweden needs electricity, a lot of electricity and there will soon be a shortage of electricity if the entire infrastructure around electricity production and its distribution is not addressed.

 

Finserve Nordic, which manages our funds, has had a strict sustainability policy since 2020. We have an employee who is dedicated to the task of ensuring that our borrowers fall within this framework. We now have a number of questions in our analysis that must be answered by prospective borrowers. We are also members of PRI, which is a global interest organization for fund managers, and we follow its sustainability standards.

 

Below you can see the return on the fund since the start. It has been five turbulent years and we are very grateful that you support and believe in us.

 

December: positiv månad och uppgång enligt reviderad prognos för 2020 21
Source: Bloomberg

 

Below you see the NAV distribution and main sectors in which the fund has invested:

 

December: positiv månad och uppgång enligt reviderad prognos för 2020 22

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