September was a historically active month, both in terms of issuance volume and number of issues. This is despite the fact that credit spreads were further reduced, and the trend is consistent across most sectors. Effective interest rates, however, remain relatively high, mainly as a result of continued high key interest rates in Norway. This means that the high-yield market is still attractive - particularly in the secondary market rather than the primary market. Although the market is characterised by a high level of activity, the fund has chosen to focus on the secondary market, with the exception of participation in Gjensidige's share issue. Going forward, it will continue to be important to exercise capital control and price risk correctly.
On this basis, there have mainly been adjustments to existing positions during September. We have slightly increased our exposure to the debt collection company Intrum, as well as increasing our general exposure to property. The fund also participated in a new bond issued by Gjensidige, which was one of the few new issues we considered attractive during September.
The fund also received repayment of premium loans from Cidron Romanov following the successful IPO of NOBA Bank. These are loans we have been invested in since 2021 when Bank Norwegian was bought off the stock exchange and have given unitholders a solid return since then.
We will continue to be selective, focusing on quality, correct risk pricing and high liquidity in the portfolio
At the end of the month, the fund had a current interest rate of 7.73 %* and an effective interest rate of 10.11 %.*
*FExcess costs related to management. May change from day to day and is therefore no guarantee of the return in the period for which it is calculated.
Sincerely yours,
Øivind Thorstensen & Simen Aarsland Øgreid
