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Borea’s new spring – Mixed Results for April

Report: Systematic Strategies

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Stockholm (HedgeNordic) – Norway’s Borea Asset Management AS reported its European Credit fund was up 2.10% in April. Borea’s Global Equities fund, however, reported a drop of -1.15%. Borea, which has roughly NOK1.5b in AUM, suggested that April was marked by rising oil prices, the rise of the Norwegian Krone (NOK) against most other currencies, and positive macroeconomic news from the US, Germany and Emerging Markets, particularly China.

Borea European Credit experienced an extension in April of the positive trend from March with a strong price performance for the portfolio. The main reason was the decreasing strength of credit fund redemptions, which in turn helped to halt the general price decline experienced through last Autumn and Winter.

European Credit now records a general investor preference for safe and secure bonds, resulting in price rises for many of their positions. It reduced its position in Siem Industries in April, having reached its target, made individual allocation adjustments in Protector Insurance, and sold the fund’s holdings in Golar.

European Credit also purchased stock in BW Offshore, expected to mature in 2017, leaving it with a net exposure of 125% at month’s end. The fund expects to achieve an annual realized yield of 17.14%, all factors taken into account.

Borea Global Equities followed the exact same trend as the drop in international equities of 1.2% (MSCI World Net Total Return, denominated in NOK) throughout April, albeit that the Oslo Stock Exchange rose 4% as a result of strong oil development, which also strengthened the NOK.

Global Equities acquired overweight in the energy sector in April due to improving oil prices, which are expected to persist through 2016. It also hedged part of its USD-portfolio against the NOK because of the pressure on the USD affecting returns on global equities, despite good economic growth and rising interest rates.

Global Equities also sold its Japanese stocks due to the bad risk environment in Japan, though took more positive figures for Emerging Markets into account in its portfolio exposure. Its best performing holdings were Facebook, Borregaard, Subsea, Masco and Intrum Justitia. By contrast, Stericycle, Cardinal Health and Nordnet disappointed in April, and are all on their way out of the portfolio.

 

Picture: (c) shutterstock.com—pressureU

 

 

 

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Glenn Leaper, PhD
Glenn Leaper, PhD
Glenn W. Leaper, Associate Editor and Political Risk Analyst with Nordic Business Media AB, completed his Ph.D. in Politics and Critical Theory from Royal Holloway, University of London in 2015. He is involved with a number of initiatives, including political research, communications consulting (speechwriting), journalism and writing his post-doctoral book. Glenn has an international background spanning the UK, France, Austria, Spain, Belgium and his native Denmark. He holds an MA in English and a BA in International Relations.

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