The administrator begins by stating that the Stockholm Stock Exchange lost 1.9 percent in September. Global stocks fell by 4.7 percent, while stocks in growth regions fell by 3.0 percent.
In September, the fund received negative contributions from the marginal overweight it has in equities, while the active Swedish interest rate management contributed positively. “In the SPP Generation 70s, the negative contribution from the fund’s equity exposure was slightly greater than the positive contribution from the interest rate exposure, which meant that the fund performed marginally weaker than the benchmark during the month.” September.
The fund maintains a marginal overweight in Swedish shares and shares in emerging markets. “There is a lag before the effects of interest rate increases and monetary policy tightening take full effect. When governments, companies and households refinance their loans with higher borrowing costs as a result, their surpluses, margins and purchasing power will be reduced.
This in turn will dampen economic activity and ultimately also inflation,” writes the administrator. Although there is concern that the economy will end up in recession, it has decreased. The administrator writes that this does not mean that the risk of a recession is over, but that it is more likely that the economy will end up in a so-called “no landing” with low unemployment for a longer period of time.”Often, a catalyst is also required to trigger an actual recession and historically speaking, such is usually a shock that hits the economy and triggers a negative spiral.
In the late-cyclical phase, the economy is also less resilient than early in the business cycle.”The asset allocation consisted of 89.7 percent of stocks, 7.9 percent of long-term interest and 2.4 percent of short-term interest. Finance, industry and technology were the sectors with the largest allocation. The sectors accounted for 20.2, 19.9 and 19.2 percent respectively of the total managed capital. The largest holdings in the fund’s portfolio at the end of the month were the fund Storebrand Emerging Markets, Apple, Atlas Copco and Microsoft.
The holdings accounted for portfolio weights of 6.4, 2.9, 2.6 and 2.6 percent respectively.