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Nordic Factoring Fund AB (publ) reports a NAV price for November of 106.02, an increase of 0.54 percentage points compared to the previous month. This year’s return amounts to 6.02% after fees to a volatility of 0.3%, leading to an annual Sharpe ratio of 12.43.
Investing in Finserve Nordic Factoring Fund gives investors access to a well-diversified portfolio of over 1000 credit counterparties with high credit ratings and an asset class that exhibits low correlation with other asset classes, such as fixed income, equities, traditional credits, 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.
In November, the risk level in the credit portfolio remained unchanged. The strategy has continuously been in line with the target return and shown low volatility since its inception, with no negative monthly returns.
No new investments were made during the period, but the management believes that the current portfolio composition is well positioned for future market developments during the current quarter and beyond.
We believe that there are still good prospects for an attractive risk-adjusted return with low volatility. The underlying counterparties in the portfolio have a credit rating of A on average, and the entire portfolio is credit insured, which protects investors against losses in the event of bankruptcy. 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.
Forecast
The U.S. economy is in a vague but dynamic phase. A strong dollar has strengthened purchasing power internationally and equity markets have shown robust performance, driven in part by positive growth expectations and increased investment following the recent presidential election. At the same time, there is a high level of uncertainty about policy initiatives, such as tariffs and other protectionist measures, which risk creating bottlenecks in trade flows and contributing to more volatile inflation developments. Inflation is a particular concern, as a too rapid rise could push the Federal Reserve to keep interest rates higher for longer than the market expects, which in turn could dampen growth.
In Europe, mainly Germany and France, economic development is weak. Industrial production and exports continue to suffer under global uncertainty, and the ECB faces difficult choices. Further cuts in interest rates to stimulate the economy are seen as a necessity, but the risk is that these measures will drive inflation, especially if energy prices or other basic commodities were to rise rapidly. In addition, geopolitical uncertainty, including the impact of US trade policy on EU export markets, weighs heavily on the outlook. The
combination of low growth and weak consumer and business confidence makes the recovery uncertain in the short term.
The Swedish economy is at increased risk of a deepening recession, although the market expects some stabilisation and recovery in 2025. Core inflation rose in November, but is still below the Riksbank’s target of 2%. This means that continued monetary policy stimulus in the form of interest rate cuts will probably be required to boost domestic demand. In the longer term, however, lower interest rates may reduce households’ incentive to save and contribute to higher consumption, which could be an important driver of the recovery. GDP grew more than expected in the third quarter, however, at low levels. The assessment is currently that the Riksbank will cut the interest rate by 25 basis points on 19 December.
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 and choosing counterparties with high credit ratings and strong balance sheets, the fund is well-equipped to handle market stress