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Nordic Factoring Fund AB (publ) reports a NAV price for January of 100.41, an increase of 0.41 percentage points compared to the previous month. The fund has a volatility of 0.3% and a measured 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.
Andreas Konstantino has chosen to leave his role as manager of Nordic Factoring Fund. He will continue during a transition period to ensure a smooth and well-functioning transition. According to the company's guidelines, Finserve Nordic AB's CEO will initially take over responsibility as manager. No new investments have been made during the period, but the management assesses that the current portfolio composition is well positioned for the upcoming market development 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
January was marked by increased market uncertainty in connection with the inauguration of the new US president and the promised global tariffs. The protectionist measures risk hampering global trade and creating new challenges for economic growth. At the same time, inflation has risen, increasing pressure on central banks to balance between fighting inflation and economic stimulus.
The FED chose to leave the interest rate unchanged and expressed uncertainty about economic developments. The ECB and the Riksbank implemented interest rate cuts to stimulate the economy but signaled that future cuts may be paused to evaluate the effects of current policy. The increased uncertainty may lead to more cautious investment decisions and a more passive macroeconomic stance going forward, with central banks waiting to see how inflation and growth develop.
IFRS 9
The reserves in the portfolio are very low. 100 % of the fund's exposure is in category 1, and the collateral is based on over 30,000 invoices pledged in favor of the fund. The invoices are rolled over in 30 to 90 days with credit insurance with and without recourse.