Portfolio manager comments — Q2 2025
Fund performance was positive during the quarter and rose by nearly 1% in SEK. There were significant movements in both the Swedish and international credit markets during the quarter. Initially, concerns about tariffs and corporate earnings reports contributed to increased uncertainty, but the market has since recovered. The primary market was active, particularly in April and May, with strong demand for new bond issues both in Sweden and abroad.
During the period, the US Federal Reserve (Fed), the European Central Bank (ECB), and the Riksbank all held monetary policy meetings. In the US, the Fed kept its policy rate unchanged at 4,25%–4,50%, maintaining a focus on inflation developments before considering any easing. The market is now pricing in a rate cut in September and two additional cuts in 2025.
The ECB cut its deposit rate twice. The first cut occurred in April, lowering the rate by 25 basis points to 2,25%. The second cut was implemented in June, bringing the deposit rate down to 2,00%. The ECB justified the cuts with continued disinflation and the need to stimulate the economy.
The Riksbank lowered its policy rate to 2,00%, amounting to a total of 200 basis points in cuts since May 2024. The Riksbank emphasized that future cuts will depend on economic developments and inflation outcomes. Following the latest monetary policy meeting, the market interpreted the Riksbank as more dovish than before, suggesting a greater willingness to prioritize economic growth and employment.
The fund continues to maintain an overweight in banks and companies with low leverage, while remaining more cautious toward sectors linked to real estate, as rising vacancy rates risk leading to wider spreads. The fund maintains a strong liquidity position and a portfolio with high credit quality.