Kraft Corporate Bonds yielded a return of 2.26% in May and are up 13.86% over the past 12 months.

May was a good month for the fund. The fund’s real estate exposure and Intrum were the biggest contributors to the return. Intrum announced a share issue where SEK 5 billion will be used to pay down debt. This boosted the price of the bonds. At the end of the month, Intrum was the third largest position in the fund.

In May, Kevin Warsh was confirmed as the new head of the Federal Reserve, taking over from Jerome Powell who had led the central bank since 2018. The month of May saw geopolitical turmoil related to the Iran war, as well as a changing macro outlook. Nevertheless, markets proved robust, with good momentum in both primary and secondary markets. Credit spreads in the European high-yield market narrowed during the month, and issuance activity so far this year is strong and is now ahead of last year’s level.

During the month, the fund increased its position in Vivion, a real estate company with a portfolio of hotel and office properties in central cities in the UK and Germany. The fund is well compensated for the underlying credit risk in the company. We also made some portfolio adjustments during the month.

The fund remains overweight in real estate and industrials, with a selective approach focusing on quality and liquidity.

At the end of the month, the fund had a current interest rate of 10.15%* and an effective interest rate of 11.13%*.

*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