Monthly commentary Pareto ESG Global Corporate Bond
During the month, there have also been elections to the European Parliament. The outcome of the election has led to greater political uncertainty in Europe, especially in France, which announced a re-election. The market reaction was negative; especially financial assets in France sold off. Credit spreads widened because of increased political uncertainty, albeit to a limited extent.
The new issue market for corporate bonds continued to perform strongly during June. Summer holidays are approaching, and we will likely see a decline in new issuance activity. High yield gross volume in the US is around $160 billion so far in 2024, corresponding to a run rate of 174% versus 2023. In Europe roughly €55 billion has been issued during the year.
Fund performance was solid during the month, with a total return in line with the coupon yield of the fund.
During June, the fund participated in Picard’s bond issuance and was also active in the secondary market where, among other things, we sold the entire holdings in ADL Security, Topbuild and Ahlström Munksjö.
The fund is classified as an article 9 fund under the SFDR Disclosure Regulation.
The synthetic CDS credit index widened. The iTraxx Crossover index went from +296 bp at the end of May to +327 bp at the end of June.
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.