MARKET VIEW 13
Still on course: despite a challenging market environment, the Nordea 1 – Global Stable Equity Fund has been able to live up to its name, providing investors with stability. „
We are focusing on companies that are less economically sensitive than the broader market. Claus Vorm portfolio manager at Nordea Asset Management
potential. But in this new investment paradigm, Vorm and Næss expect the market to reward quality com- panies able to deliver steady earnings. A combination of stabilising qualities “For the Nordea 1 – Global Stable Equity Fund , we are focusing on companies that are far less econom- ically sensitive than the broader market, as these businesses produce products or offer services largely essential to everyday consumption,” says Claus Vorm. This “staple” universe is quite vast,from basic foods and personal care items, through to the provision of utilities and many IT goods and services. While such companies largely enjoy consistent demand throughout an economic cycle, for Vorm and Næss, this characteristic alone is not enough. “It is crucial to identify companies able to comple- ment steady demand with reasonable valuations and high pricing power. This last part is particularly important in an inflationary environment, such as the one we are currently witnessing, as companies with pricing power are naturally in a far better position to continue delivering earnings growth by passing on cost increases,” Vorm says. “In addition to this, we are also targeting companies with strong balance sheets, which would consequently be less sensitive to higher increasing debt servicing costs in an environment where interest rates increase rapidly.”
At a glance ` Claus Vorm and Robert Næss, portfolio managers of the Nordea 1 – Global Stable Equity Fund , believe it is imperative to be selective during this challenging economic environment ` The quality companies in NAM’s stable universe are typically less economically sensitive than the broader market, as their products or services are essential to everyday life ` In this period of heightened inflationary pressures, companies with pricing power are naturally in a far better position to achieve growth
ISSUE 02.2022
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