The Lannebo Företagsobligationsfond rose 1.1 per cent in May, outperforming its benchmark index which gained 1.0 per cent. Since the beginning of the year, the fund has returned 1.6 per cent, ahead of the index's 1.3 per cent increase. This is according to a monthly report from fund managers Katarina Ponsbach Carlsson, Lars Kristian Feste, and Julia Stålbro.

Performance in May was shaped by low Swedish inflation and a cautious Riksbank, alongside persistent geopolitical tensions. Meanwhile, the Swedish credit market is described as having remained resilient, leading to a compression in credit spreads.

'As expected, the Riksbank left the policy rate unchanged at its meeting earlier this month. The decision reflected a clear balancing act between inflation running somewhat below target and increased uncertainty regarding the future inflationary path. At the same time, it was noted that inflation has developed more weakly than anticipated, while risks have shifted to the upside due to rising energy prices and geopolitical concerns', the managers write.

Rising energy prices simultaneously drove US inflation, which came in at 3.8 per cent. Furthermore, market expectations for rate cuts were dampened, pushing global yields higher. Kevin Warsh took office as the new Fed Chair, while Jerome Powell transitioned to a board member role.

In the eurozone, inflation remained close to the target, although forecasts for 2026 were revised upwards due to higher energy prices. This increased uncertainty regarding future monetary policy.

'At the same time, board member Isabel Schnabel signals that a rate hike may soon be necessary, as the protracted energy price shock is now spreading more broadly across the economy and risks keeping inflation above target.'

Regarding fund performance, coupon payments and tightening credit spreads for both Nordic and European high yield contributed positively to returns. Among individual holdings, Stillfront, Snowball Software Group, and Handelsbanken were the top contributors, while European Energy and KD Pharma were the primary detractors.

Primary market activity is described as having remained robust, with most issuances well-received by the market. The fund was active in both the primary and secondary markets, participating in issuances from Hoist Finance and Polar Data Center.

In conclusion, the managers note that the fund's annual yield-to-maturity stands at approximately 3.5 per cent net of fees, assuming unchanged market conditions.

The fund's largest holdings at month-end were Swedish Orphan Biovitrum, Bilia, and B2 Impact, with portfolio weights of 2.6, 2.6, and 2.5 per cent, respectively.

Interest rate duration stood at 2.5 years and credit duration at 3.4 years.

Lannebo Företagsobligationsfond, %May, 2026
Fund MTD, percentage change1.1
Index MTD, percentage change1.0
Fund YTD, percentage change1.6
Index YTD, percentage change1.3