Activity in the Nordic high-yield market was strong in the first half of the month, but then slowed as the summer vacation period began. Credit spreads narrowed marginally throughout the month.
Geopolitics continues to influence the markets. Oil prices rose more than 20% as a result of the escalating and persistent unrest in the Middle East. The U.S. and Iran have still not reached a lasting agreement, and traffic through the Strait of Hormuz is restricted. The conflict has now spread to the Red Sea, where the Houthi movement is facing off against Saudi Arabia.
Despite the turmoil, we are now operating in a more normalized market, where some sectors are priced high and others are cheaper. Sectors that have long been expensive are now gradually appearing to be cheaper, and this opens up new investment opportunities.
The changes in the portfolio during the month were primarily adjustments to existing positions. The most significant changes were an increase in exposure to Intrum and a decrease in exposure to Neo Next+.
We will continue to exercise capital discipline and price risk appropriately, and the portfolio consists of solid companies on attractive terms.
As of the end of the month, the fund has a current yield of 8.06%* and an effective yield of 9.52%*.
*Before costs 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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