Holberg Funds doubles “valve” at its bond Holberg Credit.
With the Holberg Board and the biggest investor blessing it will now be possible for the bond fund to have 20 percent of its total assets in companies with a credit rating lower than the mandate of B or better, says Investment Director Gunnar Torgersen Holberg Funds to Dagens Næringsliv.
– we do not want to sell companies that we believe will make it through this at the levels bonds are priced to today. We want to maintain fleksbiliteten mandate. One way is to perhaps use the valve to avoid dumping things in the worst possible moment, says Torgersen to DN.
– This has been achieved so far, but we still do not know how this unfold in its full and full-width, he said.
– Ragnarok
Investment Director specifies that the valve, which today is at 10 percent, is not in use . But last week’s downgrade of the listed seismic company PGS to “CCC +” by the rating agency S & amp; P puts mandate under pressure. PGS currently represent 7.3 percent of Holberg credit (see table).
- A bond is a loan issued by companies or states.
- investors can buy shares of the loan and buy and sell these shares just like the stock. In addition, they receive an interest.
- If a company is struggling, falling bond in value and the yield increases.
- When bond yields rise, it is because of this price fall bond.
- High yield bonds are bonds issued by companies with credit rating BB + or lower. The bonds have higher interest rates, with moderate to high risk. Example: oil.
- Investment-grade bonds, also known as corporate bonds, are bonds with low interest rates and high security. Example: insurance.
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Torgersen points out that Holberg Funds not partial shade rankings and official credit ratings. So far PGS still within the mandate, according to the average of four such reviews, although it is on the way down, he explains.
– We do not sit here and hope that things will not fall. We are open during the entire oil industry is middle of an ocean Ragnarok, where some companies are already come in restructuring and must do things in balance, says Holberg top.
– Chickens in the rain
Analysis Manager Pål Ringholm in Swedbank believes it is smart to have rules as an investor has more control. But no rule without exceptions, and they indviduelle analyzes must decide whether it is the beginning of a major downturn, he said. The point is not to make the rules so rigid that you lose money, says Swedbank Peak. (Case continues below)
– If everyone has the same rule, so will all sell the same day. Ergo, run by the rules that have been agreed but have fleksbilitet to drop selling chickens in the rain, says Ringholm told DN.
Changing market view
Analysis Manager was the first to warn that it could get crowded in the door when everyone was out of it, which until a few years ago was a searing bond market.
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In terms of value he drew also the cord around the 10th of December last year, when he said one should be careful in high-yield market and went to underweight. Today he turns.
– The point is that a lot of the official these ratings and skyggeratingene have been reflected in the price. Although this is the year where things should be restructured and things will go in the wall, so upward revision of my sight for market growth having been underweight. There are plenty of bargains in the market to go to that recommendation, says Ringholm.
– The outer edge
Despite the fact that the largest investors in the fund is said to sit tight, have Holberg credit set fund shrink from 5.3 billion at the end the first half of last year, to 3.4 billion as of March 1.
In the last month has 600 million taken feet on. The fund is down 7.6 percent so far this year, while the benchmark index is up 0.1 percent. Torgersen notes that net output has been considerable Norwegian credit funds, and as one of the major affected Holberg hard.
– We have tremendous respect for customers and have tried to prepare them for this since we established ourselves in 2011, when it was abnormally low volatility and high returns. Now is perhaps the very edge of what one sees below the swings, and we’ve spent a lot of time on this and try to be as open as possible in how we think about it, says Torgersen.
Close dialogue
Holberg top is also honest that the market is demanding for both customers and managers, but says it is in the bone marrow to navigate through and that there will always be opportunities for long-term returns. The Manager is confident that choices made within the oil, will be those that succeed best through the storm.
– None of our companies are currently in restructuring situation or in default, but we are honest that it obviously can happen. says Torgersen.
See also: These companies believe Holberg funds will fare best through the downturn
He emphasizes that the Fund has a close dialogue with portfolio companies. Many of these come from double-B rating, and have seen the values respective bonds falling 30-40 percent from January to February.
Meanwhile, market sentiment is important in the very short image. An oil price that has appreciated from levels in the 20th century to the present level of $ 37, heading in a positive direction, according to investment director.
– We saw signs of recovery in mid-February. Part of the problem is that nobody is willing to sell bonds at these levels, and much of the strung rates is a liquidity discount. Thin trades and small volume makes it difficult to obtain in large holdings, says Torgersen.
| Holberg Kreditt oil / oil / selected offshoreshipping-posisjoner | Virksomhet | Selskapsrangering | Andel of the fund |
| PGS * | Seismic | B + | 7.3% |
| Aker Solutions | Offshorentreprise | BB | 2,4% |
| Prosafe | Flotell | B+ | 6,5% |
| BW Offshore | Floating Production | BB | 5.3% |
| Fred. Olsen Energy | Rigg | B + | 1.3% |
| Seadrill | Rigg | B | 4.8% |
| The Norwegian oil company | oil | BB – | 4.4% |
| Ocean Yield | Oil | BB- | 1.5% |
| Ship Finance | Shipping | BB – | 3.8% |
| Teekay Offshore Partners | Oil | BB – | 7.1% |
| Source: Holberg funds |
* S & amp; P downgraded PGS to “CCC +” Friday 26 February 2016
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