SEB Sustainable High Yield Fund

Fact sheet as of 17 October, 2019

Past performance does not guarantee future performance. The value of investment funds and other financial instruments may rise as well as fall and there is no guarantee you will recover your original investment. Key investor information documents and prospectuses are available on www.sebgroup.lu/funds.

This fund aims to create long-term capital growth at a well-balanced level of risk, with consideration to specific sustainability criteria. This actively managed fund focuses on fixed-income securities from issuers in the US and Europe. The fund invests primarily in bonds issued by companies with lower credit ratings: non-investment grade or high yield bonds. The fund applies positive as well as negative screening. The positive screening aims to identify sustainable companies, where environmental, social and governance (“ESG”) factors are evaluated before investments are made. The fund follows specific exclusion criteria regarding companies whose business activities involve weapons, tobacco, alcohol, commercial gambling and pornography. Additionally, the fund does not invest in companies that extract coal, gas or oil. Up to 100 percent of the fund's assets may be invested in various transferable fixed-income securities if they are issued or guaranteed by a member state of the EU or the OECD. Since the fund invests in securities that are issued in other currencies than the base currency of the fund the return may be affected by changes in the exchange rates. See www.sebgroup.lu for the fund's sustainability profile.

INVESTMENT TEAM

The fund is managed by an experienced credit team with Jennie Nilsson, Karin Beltzér, Xuli Qian, Niklas Axelsson and Jan Bjerkeheim as the lead portfolio managers. The team, based in Stockholm, is dedicated to credits and specialising in managing high yield bonds.

Performance (EUR)

NAV: 158.13 (10/17/2019). AuM (M EUR):1,154.69 (9/30/2019)
When calculating the returns the inflation is not taken into account

Return % EUR

Accumulated
since
Fund Benchmark
1 day 0.05 -
1 month -0.08 -
6 months 2.22 -
1 year 4.29 -
2 years 1.53 -
3 years 6.96 -
5 years 15.48 -
Year to date 8.84 -
Average annual growth
3 years 2.27 -
5 years 2.92 -

Largest positions1 Share  %

iShares EUR High Yield Corp Bond UCITS ETF 2.4
US Treasury Notes 10 Year December 2019 1.5
United States Treasury Note/Bond 1.750% 220630 1.5
SFR Group SA 7.375% 260501 0.9
iShares USD High Yield Corp Bond UCITS ETF 0.8
Telesat Canada 8.875% 241115 0.7
CCO Holdings LLC / CCO Holdings Capital Corp 5.875% 270501 0.7
US Treasury Bond 20 Year Dec 2019 0.6
Albertsons Cos 6.625% 240615 0.6
CSC Holdings LLC 7.500% 280401 0.6
1Last updated 9/30/2019. Source: SEB

risk measures 1

Standard Deviation (Fund)4.1
Standard Deviation (Index)-
Tracking error-
Sharpe Ratio0.23
Information Ratio-
Alpha-
Beta-
124 months rolling. Last updated 30 September, 2019

Other information

The 12 December 2017, the fund changed name. As of 2 November 2016, the fund´s Management company is SEB Investment Management AB. SEB works actively with sustainability and follows the UN Principles for Responsible Investments. Read more at www.sebgroup.com

SEB Sustainable High Yield Fund, 17 October 2019

Investment comment

Texts as of September 2019
  • Macroeconomic data continued to be weak, in Europe in particular
  • Central banks delivered monetary easing, but failed to live up to high market expectations
  • We are neutral on investment grade and more cautious on high yield

Market Update

Central banks delivered additional monetary easing in September. The ECB reduced its deposit rate by 0.10% to a record low of -0.50% and announced a restart of its asset purchase programme, while the US Federal Reserve lowered rates by 0.25%. However, the measures failed to meet the high expectations and government rates, especially in the short end, sold off. As such, the moves in underlying government rates had a negative impact on credit returns during the month. Macroeconomic data continues to point to weak growth, with developed world PMIs (Purchasing Managers Index) stuck below 50. While there has been positive sentiment around the US-China trade situation, the damage caused by current tariffs is already done and more tariffs are in the pipeline. In addition, there is the risk of an escalation in US-Europe trade discussions. On Brexit, Boris Johnson faced significant setbacks, although the impact on credit markets was muted. Johnson is trying to secure a new deal with the EU before the 19 October deadline. New issue volumes were high in both investment grade and high yield, but well absorbed in the secondary markets.

Fund update

European high yield had a total return of -0.02% and US high yield had a total return of 0.36%. The fund generated a total return of 0.19% during the month, which was mainly contributed by security selection in the Communications and Consumer Cyclicals sectors, respectively.

Strategy going forward

We are somewhat cautious on high yield. The weak macroeconomic outlook is likely to have a greater impact on the credit quality of high yield issuers than on the investment grade segment. Further, while we expect the supply-demand balance to be supportive, high yield will not benefit as much as investment grade from central bank purchases. We like non-cyclical, defensive sectors and subordinated bonds of larger, more diversified issuers.

Key Facts

Year of launch2010
Value at launch (EUR)100.00
Fund Management CompanySEB Investment Management AB
Risk Level (SRRI-scale 1-7)3
ISINLU0456547701
Base CurrencyEUR
Share ClassC (EUR)
Available Share ClassesEUR,NOK,SEK
Morningstar rating
Turnover Ratio0.601
Use of derivativesYes2
1From 12/31/2014
2Derivatives may be used to achieve investment objectives or for hedging.

Dividend

Non-distributing share class

Costs %

Management Fee1.00
Entry Fee0.01
Ongoing Charges11.062
1The ongoing charges include the management fee and constitute payment for fund management, including marketing and distribution. The ongoing charges do not include transaction costs such as brokerage commissions on securities transactions.
2From 01/07/2019

More information

Welcome to contact your financial advisor for more information or visit www.sebgroup.lu.

Important information

This material is prepared by SEB and contains general information regarding financial instruments marketed, sold or solicited by SEB. SEB is the global brand name for Skandinaviska Enskilda Banken AB (publ), its subsidiaries and affiliated companies. Neither this material nor the products described in it are intended for distribution or sale in the United States or to US persons, and any such distribution is not allowed. The offering of shares or units in the funds may also be restricted in other jurisdictions. This document may not be used to make an offer or solicitation with respect to the sale of shares or units where such an offer or solicitation is unlawful. Although the information in this material is based on sources deemed by SEB to be reliable, SEB assumes no liability whatsoever for incorrect or missing information or for any loss, damage or claim arising from the use of this material. Past performance does not guarantee future performance. The value of investment funds and other financial instruments may rise as well as fall and there is no guarantee you will recover your original investment. If you or a fund invests in financial instruments denominated in a foreign currency, changes in currency exchange rates can affect the return on the investment. SEB makes no representation that funds whose share or unit classes aim at hedging the fund’s return from changes in currency exchange rates will succeed in achieving this. Any tax information in this material is based on regulations valid as per the date of this presentation and may be subject to change. Note that any tax information in this material is general. Kindly contact your SEB investment advisor for tax and investment advice appropriate for your situation. You are fully and solely responsible for your investment decision. This material is not intended for or suitable as the sole basis for investment decisions. Instead, you should base your decision on the information in the fund’s product documentation, including its fact sheet, Key Investor Information Document, fund regulations and prospectus. These are available on www.sebgroup.lu/funds. Saturday, October 19, 2019 3:46:34 PM