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Nordic Factoring Fund AB (publ) reports a NAV price for December of 105.87, an increase of 0.45 percentage points compared to the previous month. The return for the year amounts to 5.87 % after fees at a volatility of 0.3% leading to an annual Sharpe ratio of 12.43.
Investing in the Finserve Nordic Factoring Fund gives investors access to a well-diversified portfolio of over 1,000 credit counterparties with high credit ratings and an asset class that exhibits low correlation with other asset classes, such as interest rates, equities, traditional credit, currencies and commodities.
The portfolio consists of approximately 150,000 invoices issued to more than 1,000 companies with an average invoice amount of EUR 2,500.
During October, the risk level in the credit portfolio remained unchanged. The strategy has consistently been in line with the target return and has shown low volatility since inception, with no negative monthly returns.
No new investments have been made during the period, but management assesses that the current portfolio composition is well positioned for future market developments during the current quarter and beyond.
We assess that there are still good prospects for an attractive risk-adjusted return with low volatility. The underlying counterparties in the portfolio have an average credit rating of A, and the entire portfolio is credit insured, protecting investors against losses in the event of bankruptcies. The low insurance premium shows that the portfolio composition is considered satisfactory by the insurance company and reflects the quality of the underlying processes and counterparties.
Forecasts
In December, both the ECB and the Riksbank lowered interest rates, which was in line with market expectations. In the Eurozone, a slight increase in inflation was noted, but at the same time there were signs of easing in growth. Sweden is now focusing on stimulating the economy and driving growth. At the same time, inflation remains stably low, which could lead to further interest rate cuts.
Global economic uncertainty remains high, particularly around the political direction of the US under the Trump administration. Major policy statements combined with a cautious FED are contributing to an unstable market. Long-term market interest rates have risen sharply in the US, and questions about inflation trends and their potential effects on the global economy are further elements that make the market uncertain.
Other factors that continue to influence the market climate include geopolitical risks, oil price developments and several global conflicts, reinforcing the need to closely monitor monetary policy and central bank actions in the coming months.
The Fund's current strategy and portfolio positioning are prepared for a scenario of potential market uncertainty and rising credit spreads. By maintaining a diversified portfolio of counterparties with strong balance sheets and good track records, the Fund is well equipped to handle increased market stress. The management will monitor developments closely. If necessary, the Fund is prepared to adjust the portfolio positions to ensure competitiveness and stability in a changing economic environment.