Monthly Commentary - Pareto ESG Global Corporate Bond
Corporate bonds in both investment grade and high yield performed very well. Several companies provided positive news for vaccine efficacy for Covid-19. Based on hope for a potential speedy return to normalcy, the most vulnerable sectors such as the travel industry did very well. The volume of new issues increased sharply throughout the month globally and in the Nordic market.
The fund was active in a couple of interesting Green Bonds such as UPM Kymmene and Stora Enso. The forest industry has really developed enormously in recent years, where forestry as a sustainable investment has piqued the interests of investors. The fund was exposed to both companies beforehand.
Worth noting, the fund's name has finally changed. The new name is Pareto ESG Global Corporate Bond. The name change takes place to reflect the work that is being done and to clarify the systematic process that exists between ESG and credit analysis.
The fund developed strongly during the month. Most sectors did well. When we sum up this month's Q3 reports, it is still with a cautious optimism. The companies have acted in a very disciplined manner and governments around the world have provided generous support and favorable loan terms. However, we still see Brexit as a dark cloud, but hope for an 11th hour solution is there.
In the secondary market, the fund has shaved exposure to names such as Nemak and MDC Partners.
Synthetic CDS credit indices performed very well during month of November. The iTraxx Crossover index went from +369 bp at the end of October to +265 bp at the end of November.
Portfolio management team:
Stefan Ericson
Lead portfolio manager / Branch manager Stockholm
Philip Lindgren
Credit analyst
Ingrid Johanne Nygaard
ESG analyst
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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.