October: SCFI advanced – well in line with target return

The NAV rate for October was 103.33, an increase on the month of 0.49 and a standard deviation of 0.91. A perfectly ok month.

We have inflows in September of SEK 11 million, many thanks for that.

New lending in September was approximately SEK 30 million.

We are well in line with the revised 2020 yield of 3-5% after fees. We compare very well with other funds where we are today.

Our pipeline as of the end of October/November for new loans is approximately SEK 900 million up to and including Q1 2021. There is starting to be a great demand for new loans from companies. We gratefully accept all investments in the fund and it would be great if we could make some of these.

We have a continuous dialogue with our borrowers regarding their situation in the Corona pandemic. We have no exposure to the sectors hit hardest by the shutdowns, such as hospitality and hotels. We'll see what happens in the next few months. It is possible that some companies will enter a wait-and-see mode again. Those who can will work hard, what we see now will not last forever even if the media does its best to scare society.

The market

"Sell on the rumors buy on the facts". That was certainly the theme before, during and after the US election.

The last week of October was the worst for risky assets since March this year. Stock markets went straight down despite good reports and credit spreads on "high yield" bonds fell apart with price declines as a result.

Vote counting is in full swing but there has been a strong positive turn for risky assets over the past week. Regardless of who wins, major stimulus will need to be injected into the economy. The escalating spread of infection naturally contributes to the uncertainty in the US and globally. However, it seems that most countries "only" close down businesses that make social distancing more difficult. It is good. It is not possible to shut down the economy like last spring, in the end money has no value and then we get other problems that are much worse. The vaccine tests seem to be going well so a launch in Q1 seems very likely.

I've been looking at how the stock market has reacted to surprising news lately. Why am I coming back to the stock market? - yes, it affects sentiment in large parts of other asset markets, even though it is far from the largest.

Below you see Affärsvärlden's general index and Citi's surprise index. The connection between surprising statistics and how the index performs is relatively weak over the past 5 years with mainly two exceptions and one in particular. It was last spring when everything got out of hand. We don't see that today, even though there is a similar case in the index. In my opinion, it depends on the measures that central banks add and the incentives that are and will be through fiscal policy. So my conclusion from this is that it will be anxious but we will get through this too, a number of experiences richer. In an environment like this, I want to be invested in uncorrelated assets that aren't tossed between hope and despair.

Below you see the same index but for the USA against the S&P index, it shows a similar pattern as in Sweden.

In the graph below you can see the return for the fund since inception, you can see that the fund's total return after fees is up almost 35 percent. We are very pleased with that. This shows once again that the fund is a very good investment in a well-diversified portfolio, where the fund acts as an "airbag when things fluctuate in other investments

Below you can see the NAV distribution and main sectors in which the fund is invested:

Return history

Year	January	Feb	Mar	April	May	June	Christmas	Aug	Sept	Oct	Nov	December	Annual return
2020	0,51	0,54	−0.82	0,18	0,43	0,47	0,60	0,53	0,40	0,49	0,52	0,43	4,28%
HUB	100,51	101,05	100,23	100,41	100,84	101,31	101,91	102,44	102,84	103,33	103,85	104,28
2019	0,52	0,31	0,42	0,36	0,11	0,58	0,58	0,55	0,52	0,46	0,74	0,62	5,77%
HUB	100,52	100,83	101,25	101,61	101,72	102,30	102,88	103,43	103,95	104,41	105,15	105,77
2018	0,54	0,56	0,64	0,58	0,58	0,85	0,60	0,53	0,66	0,53	0,52	0,43	7,02%
HUB	100,54	101,10	101,74	102,32	102,90	103,75	104,35	104,88	105,54	106,07	106,59	107,02
2017	0,43	0,84	0,81	0,70	0,69	0,61	0,67	0,76	0,62	0,64	0,65	0,71	8,13%
HUB	100,43	101,27	102,08	102,78	103,47	104,08	104,75	105,51	106,13	106,77	107,42	108,13
2016	−0.25	0,37	0,31	0,44	0,50	0,69	0,66	0,80	0,63	0,92	0,81	0,76	6,64%
HUB	99,75	100,12	100,43	100,87	101,37	102,06	102,72	103,52	104,15	105,07	105,88	106,64

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