The fund had a strong month in May. The investment-grade market held up well throughout the month despite geopolitical turmoil. Technology is a key theme in the market. Major AI-driven companies such as Amazon, Meta, Alphabet, and Oracle have collectively raised $159 billion in bonds so far this year. This highlights the significant capital requirements associated with data centers and infrastructure. To diversify away from the U.S. dollar market, these companies have increasingly issued bonds in other currencies, which keeps interest among international investors high and gives the companies access to more favorable financing terms.
Inflation in the euro area came in at 3.2% in May. The rise in energy costs was the main driver of higher inflation.
The fund continues to be overweight in the real estate, banking, and insurance sectors. The fund increased its position in the euro-denominated bond issued by Alphabet Inc., also known as Google. The company’s borrowing is part of a broader international borrowing strategy to finance AI investments. The fund receives a good return for very low risk.
We will continue to exercise capital discipline and price risk correctly. The portfolio consists of solid and liquid companies, well positioned to deliver good results going forward.
As of the end of the month, the fund has a current yield of 6.05%* and an effective yield of 6.63%.*
*Forcosts related to management. Will be subject to change from day to day, and is therefore no guarantee of the return in the period for which it is calculated.
Sincerely
Øivind Thorstensen & Simen Aarsland Øgreid
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