Dear customer
We're approaching Easter and many of you have probably already started the festive season. This year it will probably be a slightly different Easter for most of us, but we'll all make the best of the situation and seek the good close experiences.
Like most other equity and fixed income funds, the past six weeks have been challenging for Kraft Høyrente. However, it is gratifying to see that the markets have calmed down and seemingly stabilised. The market is slowly returning to normal, and in Kraft Høyrente we have in the last two weeks regained some of the depreciation we experienced when the market turmoil started.
However, there is still some way to go until we are back to where we should be. Of course, volatility may also return, but I strongly doubt that we will again see the hugely irrational movements we experienced in early March. We now also have the Government Bond Fund in place as a stabilising effect.
I've mentioned this before, but I'd still like to remind you that Kraft Høyrente has a solid portfolio, with companies that have healthy balance sheets and will do well in the time to come. The effective interest rate is now 14 per cent and the average maturity of the loans is no more than about three years. On average, all loans are now trading at a rate of 84 per cent, and there is a good potential capital gain in the time to come.
The coronavirus is now playing a central role in our everyday lives and the virus is in full bloom in the US. However, the virus seems to be on the wane here in Europe and Asia.
It is still too early to predict exactly what will happen and how the economic effects will develop over the next six to nine months. Most companies will have some challenging quarters ahead of them, but the gigantic aid packages will help many to get through the crisis. In addition, all the stimulus packages will contribute to positive economic growth in the years to come.
As usual, we will be following the market closely, both during Easter and not least when the festive season is over.
With that, I would like to wish you a very happy Easter.
Regards
Øivind Thorstensen, Portfolio Manager at Kraft Høyrente
