Arctic Norwegian Value Creation Monthly Report May 2020

FUND COMMENTS Arctic Norwegian Value Creation (Class B) increased by 6.4% in May. Since inception in August 2014, the fund has returned 59.3%. The largest positive contributors to fund performance in May were XXL, Schibsted and Bonheur. The XXL share continued its strong performance from April. Product categories such as outdoor and home training seems to be in demand as fitness clubs are closed and holidays will be spent domestically. XXL reopened its five existing Austrian stores in addition to opening a new store in Vienna. In April, XXL temporarily laid off 1 450 employees in and Finland. The layoffs have gradually been withdrawn and by the end of May, XXL called back all remaining layoffs. The rights equity issue was oversubscribed, the company announced a long-term management incentive program and there were insider purchases from members of management as well as the Board. Schibsted gained primarily due to strong performance by Adevinta, its most important holding. Reopening of activities is positive for marketplaces as well as advertising. eBay is in a process of divesting its online classified business. There is strong interest for the business from industrial players as well as private equity. The size of the assets for sale might be financially challenging for Adevinta, but the company could be part of a combined transaction. High power production on the back of good wind conditions and a weaker Norwegian krone contributed to strong results in Bonheur’s key renewable segment in the first quarter of the year. The company also booked a gain of NOK 366 million on the divestment of a 51% stake in GWP, a French wind development company. However, the company’s cruise operations are still idle and power prices are at very low levels. The most negative contributors to fund performance last month were Aker BP, Hydro and . Aker BP reported a good first quarter operationally with all-time high production, but the P&L was hit by impairments of USD 653 million due to lower oil prices. Furthermore, oil and gas stocks lagged the broader market during May. Following a strong development in April, the share price of declined somewhat in May. Norwegian kroner regained ground versus the dollar, while there were a couple of broker downgrades on the company’s shares. Grameenphone, the Bangladesh subsidiary of Telenor, made a deposit of NOK 1.2 billion to the regulator (BTRC) related to a previous claim of NOK 14 billion following an audit of the 1997 to 2014 period. Furthermore, there are signs that Telenor is continuing to underperform its competitors in the important Swedish market. Year to date Europris, Tomra and Borregaard have been the most positive contributors to fund performance, while Aker ASA, Aker BP and Maersk Drilling have been the most negative. In May video conferencing company Pexip and software asset management company Crayon entered the portfolio. We participated in the rights issue in XXL while we reduced our investments in Kongsberg Gruppen. At the end of May, the portfolio was valued at 16.7 times earnings (12m fwd) and 1.3 times book value. Corresponding figures for the Norwegian market were 21.4 and 1.5, respectively. , June 2020 Sindre Sørbye Ole E. Dahl Tore Mengshoel Thomas Rasmussen Portfolio Manager Portfolio Manager Portfolio Manager Analyst

ABOUT THE FUND Arctic Norwegian Value Creation is research driven and truly index-independent UCITS fund. The investment process focus on identifying companies which are considered to be value-creating over time at a reasonable price. The portfolio is con- structed by bottom up stock picking. There are no constraints regarding sectors and the goal is to achieve the best possible long-term risk-adjusted return. The funds benchmark is Mutual Fund Index (OSEFX).

10% 6.4 % 7.2 % 8.4 % 4.5 % 4.4 % 4.9 % 5.5 % 5% 3.4 % 0% -5% -4.7 % -10% -6.2 % -15% -14.4 %-13.8 % -20% Month YTD 12m 36m p.a. 60m p.a. Incep. p.a. Arctic Norwegian Value Creation Class B (25/8-14) OSEFX FUND COMPOSITION END OF MONTH

Real Estate 0.0% 10 largest positions Energy 7.2% Europris ASA 6.3 % DNB ASA 3.9 % Industrials 15.4% Leroy Seafood Group ASA 5.4 % Borregaard ASA 3.6 % Health Care 0.0% Schibsted ASA 5.2 % ASA 3.6 % Consumer Discretionary 10.9% Kongsberg Gruppen ASA 5.0 % Norsk Hydro ASA 3.1 % Materials 13.2% Telenor ASA 4.0 % XXL ASA 3.0 % Information Technology 5.5% Financials 21.2% 5 largest overweights +/- 5 largest underweights +/- Consumer Staples 9.3% Europris ASA 5.6 % ASA -8.8 % Telecommunication Services 11.0% Lerøy Seafood Group 3.7 % ASA -5.6 % Utilities 1.2% Borregaard ASA 3.7 % DNB ASA -4.8 % Kongsberg Gruppen 3.6 % Orkla -4.1 % 0% 5% 10% 15% 20% 25% Sbanken ASA 2.8 % Telenor -3.7 %

FUND PERFORMANCE AND RISK FIGURES —CLASS B NOK (FORMER CLASS A)

3 6 Since Month months months YTD 1 year 3 years launch Fund 6.4 % -4.8 % -10.7 % -14.4 % -6.2 % 14.2 % 59.3 % Benchmark 3.4 % -3.6 % -11.0 % -13.8 % -4.7 % 13.8 % 35.9 % Difference 2.9 % -1.2 % 0.3 % -0.6 % -1.4 % 0.4 % 23.4 % Vinx Nordic Net, NOK 2.9 % 6.9 % 6.8 % 6.3 % 24.0 % 27.4 % 92.4 % Euro Stoxx 600, EUR 3.4 % -5.9 % -12.9 % -14.7 % -3.0 % -2.8 % 20.2 % S&P 500 TR, USD 4.8 % 3.6 % -2.1 % -5.0 % 12.8 % 34.0 % 71.5 % MSCI AC World, LC 4.2 % 0.2 % -5.5 % -8.0 % 6.0 % 18.1 % 44.2 %

5 top contribut. Fund Fund Contri- 5 bottom contribut. Fund Fund Contri- year to date weight return bution year to date weight return bution Europris Asa 5.4 % 24.7 % 1.54 % Aker Asa-A Shares 3.2 % -46.1 % -2.16 % Tomra Systems Asa 2.7 % 25.4 % 0.61 % Aker Bp Asa 3.4 % -44.0 % -1.67 % Borregaard Asa 3.1 % 11.0 % 0.36 % Drilling Co Of 1972/ 0.8 % -66.7 % -1.27 % Bonheur Asa 2.2 % 14.0 % 0.32 % Sparebank 1 Sr Bank 2.7 % -27.9 % -0.99 % Scatec Solar Asa 1.1 % 32.4 % 0.29 % Asa 2.9 % -27.7 % -0.97 %

Standard Sharpe Tracking Information Portfolio characteristics Deviation Ratio Error Ratio Arctic Norwegian Value Creation 17.9 % 0.2 5.0 % 0.0 Benchmark 15.6 % 0.2 *) Based on 36 months performance Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD 2020 -2.21 % -8.08 % -19.38 % 11.03 % 6.36 % -14.43 % 2019 6.64 % 4.75 % 0.42 % 1.88 % -3.92 % 2.27 % -1.84 % -0.34 % 1.98 % 1.18 % 1.74 % 4.41 % 20.41 % 2018 -0.75 % -0.84 % -0.69 % 6.85 % 4.70 % -0.03 % 0.80 % 2.02 % 1.70 % -7.32 % -0.19 % -6.84 % -1.47 % 2017 1.70 % 0.29 % -2.35 % 4.19 % 0.70 % -0.07 % 3.81 % -0.48 % 4.53 % 3.17 % -2.03 % 3.09 % 17.51 % 2016 -7.33 % 2.60 % 2.10 % 4.08 % 3.70 % -3.14 % 3.81 % 1.29 % 1.71 % 3.60 % 1.99 % 3.96 % 19.23 % 2015 4.66 % -1.15 % 1.42 % 3.48 % 0.13 % -2.25 % 1.62 % -5.13 % -1.22 % 3.68 % 4.05 % -0.76 % 8.34 % 2014 0.44 % 0.28 % -0.88 % 1.49 % 2.05 % 3.39 % *) August performance from 22.08.14 - 31.08.14 Disclaimer: Historical returns are no guarantee for future returns. Future 100.0 % returns will depend, inter alia, on market developments, the fund man- ager’s skill, the fund’s risk profile and subscription and management fees. 80.0 % The return may become negative as a result of negative price develop- 60.0 % ments. Arctic Fund Management AS seeks to the best of its ability to ensure that all information given in this report is correct, however, makes reserva- 40.0 % tions regarding possible errors and omissions. Statements in the report reflect the portfolio managers’ viewpoint at a given time, and this view- 20.0 % point may be changed without notice. The report should not be perceived 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 loss or expenses incurred through use or understanding of the report. -20.0 % Employees of Arctic Fund Management AS may be owners of securities 08/14 02/15 08/15 02/16 08/16 02/17 08/17 02/18 08/18 02/19 08/19 02/20 issued by companies that are either referred to in this rapport or are part of Arctic Norwegian Value Creation Class B (Start 22.08.14) OSEFX the fund's portfolio.