Monthly commentary Pareto ESG Global Corporate Bond
During July, we received US inflation data which showed that inflation is moving in the right direction, slowly approaching the target. This led to American market interest falling back, as the market hopes that policy rates can be cut as early as September.
After a very strong first half of the year on the new issuance market, July was quieter with lower activity due to holiday periods. So far this year, the gross issuance volume for high yield in the US is around 170 billion dollars. In Europe, approximately 70 billion euros have been issued during the year.
The fund performed well during the month, driven by lower market interest rates and good cash return.
As a result of the lower activity in the market, July was a quiet month for the fund. Despite that, the fund participated in Crown and Grupo Antolin in the primary market, companies we are already invested in. In the secondary market, minor adjustments were made, where we decreased slightly in Forvia, DaVita and Eurofins, among other things.
The fund is classified as an article 9 fund under the SFDR Disclosure Regulation.
The synthetic CDS credit index strengthened. The iTraxx Crossover index went from +327 bp at the end of June to +297 bp at the end of July.
Portfolio management team
Philip Lindgren
Portfolio manager
Historical returns are no guarantee for future returns. Future returns will depend, inter alia, on, market developments, the portfolio manager’s skill, the fund’s risk profile, as well as fees for subscription, management and redemption. Returns may become negative as a result of negative price developments. This is marketing communication.