Carnegie Monthly Report

CARNEGIE STRATEGY FUND

Carnegie Strategifond is a Nordic total return fund with a focus on equities and corporate bonds. MONTHLY REPORT • Emphasis on Nordic equities with high dividend yields and corporate bonds with high interest rates. • Invests in stable companies with low valuations and attractive cash flows. SEPTEMBER 2017 • There is no predetermined weighting between equities and corporate bonds.

MANAGER COMMENT: Excessive slides for our construction stocks

Swedish construction-related companies have but the share had already lost 15 percent by been weak performers in late summer. Some then. companies with a high dependency on domestic consumption have also been relatively weak. The Given the performance of the Swedish housing media has even reported on negative signs in the market in recent years, there is a risk of a housing market. We have deliberately chosen to correction, which means that we continue to avoid companies with strong dependence on the avoid companies with high dependence directly Swedish housing market. This also applies to and indirectly on Swedish house prices. However, banks in which the fund owns bonds, Nordic we believe that the share price reactions in the JOHN STRÖMGREN banks and/or banks with lower exposure to construction-related companies that we own are Manager since 1998 and in the business since housing loans. Unfortunately, the market is not excessive given the nature of their business. 1984. always so careful in making distinctions. Skanska and Bonava have even risen slightly in September, but not by as much as the market. Start date 01/01/1994 Despite relatively strong reports from Skanska Pricing Daily and Bonava, these fell between June and This month the fund switched its SEB bonds for Morningstar rating (2017-09-30) QQQQ September by up to 13 percent. Skanska has just SEB shares. This was mainly because we believe over 10 percent of its sales related to Swedish the stock is a better option given the current Risk level 4 of 7 housing construction. Bonava is certainly a pure valuation. The bond provides interest to maturity ISIN LU0075898758 housing developer but most of its projects and of 2,5 percent while the share has a dividend yield Bloomberg BBG000BNNY79 most of its growth are outside Sweden (mainly in of 5 percent. SKF’s stock has fallen unjustifiably Germany). NCC also fell during the period and, far since the report. The fund has therefore likewise, does not have any great exposure to bought shares, mainly financed by a reduced Management fee 1.10% Swedish housing development, but instead is holding in Industrivärden. Minimum initial investment 0 SEK dominated by infrastructure and commercial projects. A profit warning in September after its - John Strömgren Asset under management 936 MSEK report caused a negative share price response, Dividend No NAV (End of month) 5129.46 SEK

RETURN % (CLOSING NAV) As of 30/09/2017

YTD 1 Year 3 Year 5 Year Since inception

7.3 11.0 33.0 92.9 1159.8 FOR SWISS INVESTORS: The Company is established as a SICAV under 5 YEAR RETURN % (CLOSING NAV) Luxembourg law and the Sub-Funds are authorised by FINMA. The Swiss representative is Carnegie Fund As of 30/09/2017 Services S.A., 11, rue du Général-Dufour, 1204 Geneva. 220 The Swiss paying agent is Banque Cantonale de Genève, 17, quai de l’Ile, 1204 Geneva. Investors in Switzerland 190 can obtain the documents of the Company, such as the Prospectus, the KIIDs, the Articles of Incorporation and 160 the semi-annual and annual reports, each in their latest version as approved by FINMA, in German, and further 130 information free of charge from the Swiss

100 representative.

70 2013 2014 2015 2016 2017

Carnegie Strategy Fund Category Morningstar: SEK Moderate Allocation

RETURN PER MONTH % (CLOSING NAV) As of 30/09/2017

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual 2017 0.28 1.66 1.12 3.47 2.06 -0.76 -1.93 -1.36 2.62 7.27 2016 -3.08 1.28 2.28 0.33 1.93 -1.63 3.87 2.45 1.70 0.50 -0.34 3.31 13.11 2015 4.47 4.71 0.24 0.69 -0.20 -3.58 3.47 -3.80 -3.29 3.40 3.01 -3.29 5.35

Historical returns are no guarantee of future returns. Money invested in the fund may both increase or decrease in value and there is no guarantee that you will be repaid all of your invested capital. Complete prospectus and fund statutes are available at www.carnegiefonder.se. The information in this document is proprietary to Morningstar and Carnegie Fonder and is intended only as general information. It should not be construed as investment advice or recommendation. The information may prove to be inaccurate, incomplete or out of date. Neither Morningstar nor Carnegie Fonder is responsible for the damage, whether direct or indirect result of any defects or errors in the information. The information may not be copied, altered or further distributed without Morningstar's consent CARNEGIE STRATEGY FUND

LARGEST ISSUER % CREDIT QUALITY BONDS% KEY STATS As of 29/09/2017 As of 29/09/2017 As of 29/09/2017

Danske Bank 2.7 AAA 0.0 Yield to maturity bonds 3.39 Dividend yield shares 3.47 Bergvik 2.6 AA+ 0.0 Capital weighted yield bonds/shares 3.35 SBB 2.4 AA 0.0 Credit duration (yrs) 5.62 Intrum 2.2 AA- 0.0 Duration (yrs) 1.54 RSA 1.6 A+ 2.6 Standard Deviation %, 1 Year 6.21 Total 11.5 A 0.0 Standard Deviation %, 3 Year 7.63 A- 0.0 Sharpe Ratio, 1 year 1.87 Sharpe ratio, 3 Year 1.25 LARGEST HOLDINGS EQUITY % BBB+ 0.5 As of 30/09/2017 BBB 1.6 BBB- 5.2 Investor Ab B 6.4 BB+ 6.6 Industrivaerden Ab C 4.4 BB 8.1 Lifco Ab B 4.2 BB- 2.4 SECTOR BREAKDOWN % Ncc Ab B 4.1 As of 29/09/2017 B+ 7.0 Holmen Ab B 4.1 B 4.2 Industrials Total 23.3 B- 1.2 Investment Company

STANDARD DEVIATION % Real Estate As of 31/10/2014 to 30/09/2017 c_Banks 10 Materials 8 Consumer Discreationary

6 c_OtherFinancials

Telecom 4 Other 2 0 5 10 15 20 25

0 2015 2016 2017 GEOGRAPHICAL BREAKDOWN % As of 29/09/2017

DISTRIBUTION OF MONTHLY RETURNS % Sweden 76% As of 30/09/2014 to 30/09/2017 Norway 12% Denmark 9% 12 Finland 2% Other 2% 10

4 ASSET ALLOCATION % 2 As of 29/09/2017

1 to 3 3 to 5 5 to 7 Shares 60% -1 to 1 -5 to -3 -3 to -1 Bonds 40% The Y-axis shows the number of months the fund has a monthly return within the defined range on the X-axis.

ABOUT CARNEGIE FONDER CONTACT INFORMATION We specialise in equity funds and fixed-income funds in Sweden, the Nordic Visiting adress: Regeringsgatan 56 Stockholm region and in the world's emerging markets. Our funds invest in a selected Postal adress: Box 7828 103 97 Stockholm Sweden number of attractively valued assets that we really believe in – an investment Homepage: www.carnegiefonder.se philosophy we call focused value management, and which we have retained since Phone: +46 8 12 15 50 00 our foundation in 1988.