Finserve

Nordic Factoring Fund AB (publ) reports a return of 0.57 % for March
The underlying return of the portfolio remains strong with a consistent level of risk. Future expectations for the fund's returns are projected to align with historical returns and risk levels. The fund is expected to benefit from forecasted interest rate cuts, which would make it more advantageous compared to other low-risk financial products.
In March, a major institutional investor joined, making further investments, which strongly validates the fund and its existing investors. Interest in the fund is growing among both Swedish and European institutional investors.
The managers have carefully analyzed various sectors and individual counterparties to minimize portfolio risks while maintaining low volatility. The fund's underlying counterparties have an average credit rating of A. Additionally, the fund is insured against bankruptcy with a cost-effective credit insurance, which indicates that the insurance company finds the portfolio composition satisfactory.
Despite warnings from the European Central Bank (ECB) about increased credit risk in the market, the fund's high-credit-rated counterparties remain robust. The fund has not had a single negative month since its inception in 2019 and has effectively managed both the COVID-19 crisis and the consequences of the invasion of Ukraine. By investing in the Finserve Nordic Factoring Fund, investors gain access to a well-diversified portfolio consisting of over 250 counterparties with high credit ratings, demonstrating low covariation with other asset classes such as interest rates, stocks, credits, currencies, and commodities.

Market and Economy
In the USA, inflation continues to decrease but remains at a high level. However, core inflation has increased, causing market concerns about the timing of the first interest rate cut. Recent forecasts have led to speculation that a rate cut from the Federal Reserve (Fed) might occur in the first half of the year. Both Sweden and the Eurozone are showing signs of decreased inflation, and interest rate cuts from the ECB and the Riksbank are likely at the next meeting. The Riksbank faces the challenge of a weakened krona in the first quarter, which may influence the timing of the rate cut. Market consensus is that there will be 3-4 rate cuts during 2024.
Lower interest rates will benefit sectors and companies dependent on financing: Factoring is experiencing strong growth as banks and other lenders become more restrictive. Factoring enables growth for both large and small companies with controlled indebtedness.

IFRS 9
Reserves within the portfolio are very low. Nearly 100% of the fund's exposure is in category 1, and the security is based on over 30,000 invoices pledged in favor of the fund. The invoices have a term of 30 to 90 days, with credit insurance both with and without recourse. Additionally, there is an asset insurance against fake invoices.