November: SCFI rose by 0.5 percent - "very good month under current circumstances"

The NAV rate for November was 103.85, an increase of 0.52 (0.50 %) per month and a standard deviation of 0.92. Under current corona conditions a very good month. We have inflows in November of SEK 26 million, thank you very much for that. New lending in September was approximately SEK 18 million.


We continue to be well in line with the revised return for 2020 of 3–5 percent after fees.


Our work with extra follow-up of our borrowers, which is driven by the second wave of covid-19, is going well. We have not had to make any concessions that affect the portfolio to any great extent. There are marginal adjustments to IFRS this month. In a few isolated cases, we will temporarily capitalize interest payments. This does not mean that the company is bad or the credit has deteriorated, but is completely in line with the recommendations that ESMA has given to everyone who complies with IFRS 9. I want to emphasize that our exposure to the hospitality industry, transport, tourism, etc. is zero.


We expect to liquidate / restructure some smaller credits that were in category 3 during the month. This means that they are removed from category 3 or from the portfolio, or alternatively get another borrower. The result is good for the portfolio.


Below you see the graph on SCF I since the start, we are very proud of the really boring graph that is shown. Boring is good in this context, we do not want a messy and jumpy curve.


November: SCFI steg med 0,5 procent – "mycket bra månad under rådande omständigheter" 13
Source Bloomberg


The graph below shows all months in the fund since the start, we have only two minus months since January 2016, very good.


November: SCFI steg med 0,5 procent – "mycket bra månad under rådande omständigheter" 14

The market:


During November, we experienced one of the best individual months for risky assets in modern times, congratulations to everyone who has been overweighted shares in, for example, Spain, UK, etc.


We have received:


  • New President of the United States Joe Biden wins convincingly, the market (and I) like it. This hopefully means that the United States will once again become a stabilizing factor in the world instead of just thinking about its voters in the Midwest. I further hope that the rhetoric will return to something that does not resemble the level of a quick-witted child and gets sand in the eyes but becomes statesmanlike and respectful of everyone's opinions.
  • The market also likes that Democrats do not win the Senate so they can pursue a policy that is stifling growth.
  • Vaccination is underway and vaccination will start in the UK next week.
  • Central banks continue to emphasize an ultra-light monetary policy and that it will last for several years to come.


Government bond yields are around zero and are not an option for those who want a return on their capital.


All this has contributed and will contribute to a positive sentiment in the near future.


In the graph you see Sweden's GDP growth since the year 2000 and with it I want to illustrate that with the right measures the economy will return to growth eventually, it will work out this time as well. The fall in GDP was actually greater during the financial crisis, but it was less noticeable because then there were no restrictions on how we should live our lives.

November: SCFI steg med 0,5 procent – "mycket bra månad under rådande omständigheter" 15
Source Bloomberg


What do any risks look like in the future?


  • Risky assets have once again run off a little too fast and the real economy with fiscal policy is lagging behind. We see signs that Poland and Hungary are preventing the EU from implementing the huge support package they voted through this summer because they cannot accept the wording that a precondition for support is that countries must follow "democratic principles" (just because Trump are gone, the powers of darkness are not gone, we have them close by)
  • The vaccination takes time, there is a setback for vaccines. I am very worried that in Europe, and especially in Sweden, the preparations for mass vaccination are poorly planned. The government believes that the regions have the responsibility and vice versa. In the end, it affects a service sector that is lame, let's hope I'm wrong.
  • Inflation will not come this year and perhaps not in the next few years. The more I shout at the wolf, the less likely someone is to listen when it comes.
  • When the asset purchases of long-term government bonds cease, long-term interest rates will rise dramatically and risky assets will be shaken. It will be a delicate balancing act for central banks to walk around the world.


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


November: SCFI steg med 0,5 procent – "mycket bra månad under rådande omständigheter" 16

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