Arctic Norwegian Equities Monthly Report July 2019

FUND COMMENTS Arctic Norwegian Equities (Class I) gave 0.26% return in July versus -0.23% for the OSEFX benchmark index. Year to date the fund has returned 7.7% compared to 9.0% for the OSEFX. Since inception the fund has returned 133.4% versus 103.6% for the benchmark. In July positive attribution for the Fund versus the benchmark index came from overweight in Grieg , and underweights in and Systems. rose with the other shares in farming during the first half of July. Grieg Seafood shows strong progress towards its 100,000 ton volume guidance for 2020. The Fund has increased its exposure to salmon farmers over the last couple of months. The fund is underweight in Equi- nor. The company announced earnings for the 2nd quarter which were below market expectations. Equinor had a relatively high natural gas-share in its production, due to turnarounds and operational issues at Snorre. It also had weaker margins in its trading division. The fund sold shares in Equinor earlier this summer. Arctic Norwegian Equi- ties holds no shares in Tomra Systems, which announced results for the 2nd quarter. The company’s organic growth decreased to 6 percent in Q2, from 14 percent in Q1. The company’s order intake in Sorting was disap- pointing, so Tomra is unlikely to have significant revenue growth in the second half of 2019. The Tomra share has had a high valuation. In July negative attribution for the Fund versus the benchmark index came from overweights in TGS, Ateaand Sparebank1 Nord-Norge. Many oil services shares fell in July. Seismic company TGS announced 2nd quarter results showing stronger sales than expected, but weaker operating results. Cash flow was weak in Q2, but the company retains a net cash position of 354 million dollars. The company’s acquisition of Spectrum will be finalized in August. Atea announced results for the 2nd quarter which once again showed disappointing results in Denmark. The com- pany had growing topline and operating profit in all markets, but Denmark results lag the company’s previous ex- pectations. Atea expects continued profit growth in the second half of 2019. Savings bank Sparebank1 Nord-Norge fell somewhat in August. Norwegian bank shares declined in conjunction with the rest of the Nordic sector. Year to date the strongest attributors include overweights in BW Offshore, and underweights in Equinor and . The weakest attributors include overweight in NRC Group and B2 Holding, and underweight in Tomra.

Oslo, August 2019 Albert Collett Alexander Larstedt Lager CIO Portfolio Manager

ABOUT THE FUND The investment objective is to achieve long-term capital appreciation primarily through equity investments in companies listed ro traded on markets in . The Fund may be considered as a focused equity fund – a “ picker”. Our investment team has long experience in challenging the market consensus and invests only in companies and sectors we have knowledge of and understand. We seek to achieve the investment objective through active portfolio management based on competence and analysis of companies, sectors, marketsand the macro-economic outlook. This results in selective company investments. There are no limitations of which sectors within the Norwegian stock market the Fund may invest in. The portfolio composition may deviate significantly from the reference index. The Fund’s reference index is the Mutual Fund Index (OSEFX) which is a total return index. The Fund is a UCITS fund. 15% 11.2 % 10.1 % 10.2 % 8.9 % 8.5 % 10% 7.7 % 8.3 % 7.4 %

5% 0.3 % 0% -0.2 % -5% -2.3 % -2.6 % Month YTD 12m 36m p.a. 60m p.a. Incep. p.a. Arctic Norwegian Equities Class I (15/11-10) OSEFX FUND COMPOSITION END OF MONTH

Real Estate Real Estate Energy Energy Industrials Industrials Health Care Health Care Consumer Staples Consumer Staples Materials Materials IT IT Financials Financials Consumer Discr. Consumer Discr. Telecom Telecom Utilities Utilities 0% 5% 10% 15% 20% -8% -6% -4% -2% 0% 2% 4% 6%

10 largest positions 5 largest overweights +/- 5 largest underweights +/- DNB Bank ASA 9.6 % ASA 4.9 % NRC Group ASA 6.8 % Equinor ASA -3.9 % ASA 8.6 % Equinor ASA 4.6 % Vaccibody AS 5.0 % Tomra Systems -2.7 % NRC Group ASA 6.8 % Atea ASA 4.3 % Atea 3.4 % -2.6 % Telenor ASA 6.3 % Aker BP ASA 3.9 % SpareBank 1 Nord-Norge 2.4 % Orkla -2.4 % Vaccibody AS 5.0 % P/F 3.0 % Grieg Seafood 1.7 % Schibsted ASA CL A -1.8 %

FUND PERFORMANCE AND RISK FIGURES —CLASS I NOK

3 6 Since Month months months YTD 1 year 3 years 5 years launch Fund 0.3 % -0.7 % 3.8 % 7.7 % -2.3 % 33.3 % 48.8 % 133.4 % Benchmark -0.2 % -1.6 % 4.1 % 8.9 % -2.6 % 37.6 % 43.2 % 103.6 % Difference 0.5 % 0.9 % -0.3 % -1.3 % 0.2 % -4.3 % 5.7 % 29.8 % Vinx Nordic Net, NOK -0.2 % -1.2 % 7.2 % 10.6 % 2.1 % 23.3 % 40.3 % 107.4 % Euro Stoxx 600, EUR 0.3 % -0.4 % 9.9 % 16.8 % 1.4 % 22.7 % 31.9 % 82.3 % S&P 500 TR, USD 1.4 % 1.7 % 11.3 % 20.2 % 8.0 % 45.7 % 71.1 % 198.4 % MSCI AC World, LC 0.9 % 0.5 % 9.1 % 17.0 % 4.0 % 35.8 % 48.7 % 119.4 %

5 top contribut. Fund Fund Contri- 5 bottom contribut. Fund Fund Contri- year to date weight return bution year to date weight return bution Dnb Asa 9.6 % 20.9 % 2.05 % Nrc Group Asa 6.6 % -10.1 % -0.71 % Mowi Asa 8.0 % 18.7 % 1.39 % Equinor Asa 6.7 % -11.6 % -0.71 % Yara International A 4.9 % 27.1 % 1.30 % Norsk Hydro Asa 2.9 % -19.5 % -0.67 % Bw Offshore Ltd 1.9 % 58.3 % 0.73 % Norwegian Air Shuttl 0.3 % -65.7 % -0.43 % Telenor Asa 6.7 % 10.2 % 0.66 % B2 Holding Asa 2.9 % -15.9 % -0.40 % Standard Sharpe Tracking Information Portfolio characteristics Deviation Ratio Error Ratio Arctic Norwegian Equities 9.0 % 1.1 3.0 % -0.4 Benchmark 9.7 % 1.1 *) Based on 36 months rolling performance Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD 2019 3.69 % 2.82 % -0.34 % 2.07 % -2.03 % 1.07 % 0.26 % 7.68 % 2018 -0.59 % 0.34 % -1.79 % 6.33 % 2.10 % 0.83 % 1.38 % 2.75 % 2.32 % -5.34 % -3.07 % -5.98 % -1.40 % 2017 -0.10 % -0.87 % -2.12 % 1.68 % 0.72 % -1.70 % 4.13 % 1.08 % 5.18 % 2.28 % -0.87 % 1.53 % 11.22 % 2016 -8.62 % 2.65 % 1.28 % 3.19 % 2.45 % -2.94 % 1.65 % 1.75 % 2.42 % 3.82 % 1.80 % 2.48 % 11.85 % 2015 4.11 % 0.12 % 1.53 % 3.45 % 0.94 % -1.80 % 1.84 % -5.80 % -2.34 % 3.05 % 2.87 % 2.23 % 10.19 % 2014 0.79 % 2.67 % -0.32 % 0.71 % 3.31 % 2.66 % 0.43 % 0.49 % 0.97 % -1.01 % -0.22 % 2.03 % 13.15 % 2013 4.40 % 5.27 % -0.66 % 2.24 % 3.70 % -3.49 % 3.93 % 0.44 % 1.46 % 6.51 % 4.29 % -0.03 % 31.37 % 2012 5.26 % 9.20 % 0.42 % 0.97 % -7.84 % 4.40 % 1.93 % 2.59 % 2.13 % -2.45 % -1.75 % 1.67 % 16.68 % 2011 -2.89 % 2.19 % -0.17 % -0.06 % -3.43 % -2.25 % -1.08 % -8.59 % -9.19 % 9.65 % -2.28 % 2.43 % -15.78 % 2010* 0.30 % 9.46 % 9.78 %

180.0 % Disclaimer: Historical returns are no guarantee for future returns. Future 160.0 % returns will depend, inter alia, on market developments, the fund man- 140.0 % ager’s skill, the fund’s risk profile and subscription and management fees. 120.0 % The return may become negative as a result of negative price develop- 100.0 % ments. Arctic Fund Management AS seeks to the best of its ability to ensure 80.0 % that all information given in this report is correct, however, makes reserva- tions regarding possible errors and omissions. Statements in the report 60.0 % reflect the portfolio managers’ viewpoint at a given time, and this view- 40.0 % point may be changed without notice. The report should not be perceived 20.0 % as an offer or recommendation to buy or sell financial instruments. Arctic 0.0 % Fund Management AS does not assume responsibility for direct or indirect -20.0 % loss or expenses incurred through use or understanding of the report. -40.0 % Employees of Arctic Fund Management AS may be owners of securities 11/10 11/11 11/12 11/13 11/14 11/15 11/16 11/17 11/18 issued by companies that are either referred to in this rapport or are part of Arctic Norwegian Equities Class I OSEFX the fund's portfolio.