Financial markets develop continuously - often at a rapid pace. Consequently, we continuously adapt our fund management to the current conditions. Sometimes developments in the market take a big leap – this type of situation requires making more comprehensive adjustments in how the funds are managed.
Interest rates, which have fallen substantially in the past years, reflect changes in financial markets. Although falling interest rates have enabled interest-bearing investments to generate good returns for a long period of time, we believe the opportunity to achieve this type of return is now diminishing. At the same time, we see new investment opportunities, such as credit investment and alternative investments, developing.
Consequently, we intend to adjust the funds' portfolios in the coming months according to the new conditions. The changes we make will be within the framework of the funds’ current respective investment policies.
Summary of the changes:
- Our view of the market will have greater influence on the funds’ portfolios as compared to before. This is to increase the possibility of excess return.
- Considering the interest rate situation, we believe the respective fund’s portfolio will contain a larger portion of investments with a certain degree of risk. Again, this is to increase the possibility of a good return.
- We aim to make greater use of thematic investments in the portfolios, such as investing in a specific sector, when it can have a positive effect.
- Today there is a broad selection of illiquid instruments in interest rate investments available, many of which offer potentially higher returns as compared to more traditional financial instruments. We are investigating the possibility of including these types of investments in our funds.
We will implement the changes described here in the coming months. Naturally, we will take the current market situation into account as we make the changes. We firmly believe these changes will create even greater opportunities to generate a healthy return for the funds.
We will continue to report on the funds’ development and fund management in the monthly newsletter. If you wish to subscribe or have questions, you are warmly welcome to contact your private banker.
Mårten Gabrielsson, Asset class head, Multi Management