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Church of Sweden's CIO buys into microfinance

Church of Sweden's CIO buys into microfinance

We have interviewed several investors asking them about the biggest issues they are facing at the moment. Here's what Church of Sweden's Anders Thorendal told us.

Name: Anders Thorendal
Role: Treasurer and CIO, Church of Sweden 
Country: Sweden 

The biggest issue facing us today is to find yield without taking on too much risk in the portfolio.

With traditional fixed income instruments giving more or less zero returns, there can be a temptation to stretch too far into high yield credit for those extra basis points. Staying overweight in equities just because there are no attractive fixed-income alternatives available can be another way of increasing the risk to an unhealthy level, unless you can afford to be really long-term focused.

In light of this, we have, as along with many other investors, increased our allocation to alternatives and real estate, with the idea that giving up liquidity should pay off in better returns.

As an investor with a strong focus on sustainability, with the high conviction that there is not necessarily a trade-off between return and responsibility, there are also some interesting alternatives available in this field, especially if the size of the portfolio is around SEK6.5 billion (€760 million).

We have, for instance, invested in microfinance in addition to more traditional residential property.

The global economy is currently facing a mixed scenario. The different political risks overshadow the positive signs that do exist in Europe and elsewhere. The volatility of the stock exchanges increases the uncertainty. Against this backdrop, the focus now is to identify the next black swan.

To join the conversation and air your views, Tweet us @amoderninvestor using the hashtag #InvestorChallenge.

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