September: Stable rise for Scandinavian Credit Fund I

The NAV rate for September was 102.84, an increase of 0.40 per month and a standard deviation of 0.92.

We have inflows in September of SEK 22 million, thank you very much for that.

New lending in September was about SEK 95 million, it is primarily a larger loan that is behind that figure.

The slightly weaker NAV figure for September comes from IFRS provisions, 30-day month and market-valued holdings.

Our pipeline at the turn of the month September / October on new loans is approximately SEK 870m until Q1 2021. There is beginning to be great demand for new loans from companies. We gratefully accept all investments in the fund and it would be fun if we could make some of these.

At the beginning of September, the fund filed a lawsuit against JOOL Markets AS Filial Sverige in Stockholm District Court for their actions in connection with the issue of the Trinitas bond. What is being tested is the organizing responsibility that JOOL has for the content of their investor material which was falsified and incorrect. It has never been tried in Sweden before, but a well-known Norwegian investment bank lost two cases of that nature despite several pages of disclaimers. We mentioned that we intended to try this in court when we announced this event in the press and we are doing so now.

It is of the utmost importance for you as a unit holder that we always do everything to recover invested capital. This is an extreme event where a criminal proceeding by the principal is the cause of the loss. In this case, there are good reasons to believe that we will succeed, otherwise we would not do it. The fund has already written down the value of its holding in the bond, which means that NAV's effect when we win will be positive. You can read about this in today's law at the following link: https://www.dagensjuridik.se/nyheter/jool-markets-kravs-pa-61-miljoner-kronor-efter-obligationsskandal/

The market:

The single most important event in the near future is the election in the United States, I believe. I wrote in last month's letter that I think Trump will win and I still think so (though I hope for Biden), although I personally think it's an unpleasant thought. As I mentioned before, I am most worried that Trump will not hand over power in the event of a Biden victory. This will probably lead to unrest, which in turn will add to the risk appetite.

In this graph you see the market's prediction of the election outcome, you can see that it is a fairly large predominance for Biden. You can also see that 6 months ago it was the next zero. A lot can happen before election day.

September: Stabil uppgång för Scandinavian Credit Fund I 1

(source Bloomberg)

Once the election is completed, I believe risky assets will continue to develop well regardless of whether Trump or Biden wins, but more so with Trump as he will probably come up with an expansive tax package that will be received positively by the market.

Covid-19 is, as earlier this year, what works in the other direction. A sharp increase is underway in Europe, however, it seems that politicians are trying to keep the wheels in motion as far as possible. It would be a disaster with shutdowns of the type that were in the spring.

Vaccine, it is the holy grail that we all long for, it would change the picture completely. I think the market expects an effective vaccine to be in place before the turn of the year or during Q1 2021. Unfortunately, the reverse is the case if it is very late.

Risky assets have had a bit of a downturn in September with high volatility. However, October has started in major and the Stockholm Stock Exchange has set a new "all time high".

I take the opportunity to show the fund's return from the start, despite the tumultuous spring, we are showing a robust return for the year.

September: Stabil uppgång för Scandinavian Credit Fund I 2

(source Bloomberg)

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

September: Stabil uppgång för Scandinavian Credit Fund I 3



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Emma Westerberg

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