Lannebo High Yield

Companies seeking financing have traditionally looked to conventional bank loans. Now many companies turn to the capital markets to fund their business, which has increased the potential to invest in corporate bonds. A corporate bond fund is an alternative to savings in a traditional fixed income fund and is suited for those who are willing to take a little more risk than that of a traditional interest bearing savings but that do not want to invest in the stock market.

Investment policy

Lannebo High Yield is an actively managed fixed income fund that primarily invests in high yield corporate bonds predominantly from issuers in the Nordic region. More than 35 per cent of the fund’s assets can be invested in fixed income securities and other debt instruments issued or guaranteed by a state or local government in the Nordic countries. High-yield bonds are securities issued by companies with a lower credit rating. The average maturity of the fund’s holdings is 3-5 years, but may at times deviate from this range. Investments in foreign currency are always hedged.

The fund is suitable for those who

• want a higher return than traditional fixed income funds and who are willing to take on a slightly higher risk
• want an actively managed fund where a thorough company analysis creates long-term returns
• want a well-diversified fund of corporate bonds

Investments are individually evaluated, and we invest only in bonds issued by companies we are familiar with. We build a balanced fund of corporate bonds from various industries, geographic regions and varying risk profiles. We avoid securities issued by companies for a specific project and companies with excessive debt. The aim of the fund is to generate stable returns over time.

Lannebo High Yield conducts genuine active management with focus on long-term, profitability and sustainability. The funds managers choose holdings on the basis of a thorough company analysis. The managers assess factors such as the company’s business model, market position, growth opportunities and risks. How a company takes responsibility towards people, environment and society also affect its future growth. Therefore, before making an investment the portfolio managers complete an internal company sustainability analysis. The managers analyse and assess various areas of sustainability and review whether there have been previous sustainability incidents. The managers then rate the company based on the results of the analysis. The internal analysis also includes a rating from an external sustainability service provider. Lannebo’s active management means that our managers develop a deep knowledge of each holding, which we believe is a prerequisite for being able to integrate sustainability into the investment process. We are long-term investors and our task is to invest in companies that will be profitable and deliver to our fund investors a good return over time at a reasonable risk. The managers also meet with company managements regularly to monitor developments and discuss sustainability.

Exclusion
Lannebo High Yield does not invest in companies that violate international conventions or in companies that produce and/or distribute controversial weapons. The fund also refrains from investing in companies in which more than 5 per cent of the company’s turnover comes from the production and/or distribution of tobacco, cannabis, alcohol, weapons, gambling or pornography. The fund also refrains from investing in companies in which more than 5 per cent of the company’s turnover comes from extracting of fossil fuels (coal, oil and gas).