April was a good month for the fund. In today’s volatile market, the investment grade market also came under pressure, but the increase in credit spreads was more moderate than in high yield. The market remains robust, underpinned by stable spread levels, good demand and increasing financing needs related to acquisition activities.
Inflation in the euro area came in at 3% in April, which is above the target of 2%. The ECB expects a slight increase in inflation due to high oil prices. The market is now pricing in three interest rate hikes starting in June. The Bank of Japan, the Fed, the Bank of Canada and the Bank of England have kept their key interest rates unchanged, mentioning that they need more data before making a decision.
The fund retains its overweight in real estate, banking and insurance, where we continue to receive good compensation. The fund acquired NN Group, which is a BBB+ rated Dutch insurance and finance group, with roots dating back to 1845, active in 10 countries and approximately 18 million customers.
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.
At the end of the month, the fund had a current interest rate of 6.28%* and an effective interest rate of 6.69%*.
*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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