Arctic Norwegian Value Creation Monthly Report March 2019

Arctic Norwegian Value Creation Monthly Report March 2019 FUND COMMENTS Arcc Norwegian Value Creaon (Class B) increased by 0.4% in March bringing return year to date to 12.2%. Since incepon in August 2014, the fund has returned 73.5% compared to a return of 43.7% for the Norwegian OSEFX benchmark. The largest posive contribuons to fund performance in March came from Tomra, Aker BP and Bonheur. Tomra benefits from increased acceptance of the need for addional recycling iniaves. The European Parliament last month approved the Single‐Use Plascs Direcve including plasc bole collecon targets of 77% by 2025 and 90% by 2029. In addion, there is a target to incorporate 25% or recycled plasc in PET boles as from 2025 and 30% in all plasc boles by 2030. Thus, there might be business opportunies for Tomra’s Collecon as well as Sorng so‐ luons. The Aker BP share connued to perform well as the Brent crude price edged up, while the company reported a suc‐ cessful exploraon well on the “Froskelår” prospect. Furthermore, according to data from the Norwegian Petrole‐ um Directorate, producon at the “Valhall” field was up by 22% in January y‐o‐y indicang a strong start for the year for Aker BP. Bonheur announced the acquision of 50% of United Wind Logiscs adding to their offshore wind service and installaon capabilies. Following deconsolidaon of Dolphin Drilling, Bonheur is now largely a compa‐ ny involved in wind power. Moreover, Bonheur announced refinancing of GBP 400 mill. of debt at favourable terms, thereby lowering net interest expenses. The most negave contribuons to performance last month came from XXL, B2 Holding and Europris. XXL declined due to fears of connued LFL contracon and gross margin pressure. Sporng goods stascs for February showed negave growth figures in Norway and Sweden. In addion, Kesko in Finland also showed lower sales y/y in the leisure category that month. XXL’s main competor in Norway, Gresvig, reported heavy losses in 2018. Following a disappoinng Q4‐18 report released at the end of February and a connued investor skepcism towards the debt collecon industry, the share price of B2Holding connued its lackluster development. Europris fell 4% in March aer strong performance in the first two months of the year. The share price is up 19% year‐to‐date. Relevant retail stascs for Europris showed 2.6% sales growth in February following 3.1% growth in January. Europris opened its first City store in downtown Oslo last month. Year to date, Aker BP, Aker ASA and Elkem been the largest posive contributors to fund performance, while Lerøy Seafood, Veidekke and Norsk Hydro have been the largest detractors. The media company, Polaris Media, the railway infrastructure entrepreneur, NRC, and the E&P and FPSO company, BW Offshore, entered the fund in March. We increased our investments in Mowi and divested the remaining shares in Mulconsult. At the end of March, the porolio was valued at 14.2 mes earnings (12m fwd) and 1.6 mes book value. Corre‐ sponding figures for the Norwegian market were 14.9 and 1.8, respecvely. Oslo, April 2019 Sindre Sørbye Ole E. Dahl Tore Mengshoel Thomas Rasmussen Porolio Manager Porolio Manager Porolio Manager Analyst ABOUT THE FUND Arcc Norwegian Value Creaon is research driven and truly index‐independent UCITS fund. The investment process focus on idenfying companies which are considered to be value‐creang over me at a reasonable price. The porolio is con‐ structed by boom 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 Oslo Stock Exchange Mutual Fund Index (OSEFX). 20% 16.8 % 15% 13.1 % 13.7 % 12.2 % 12.7 % 10% 8.6 % 8.7 % 8.2 % 5% 0.4 % 0.1 % 0% Month YTD 12m 36m p.a. 60m p.a. Incep. p.a. Arctic Norwegian Value Crea tion II Class B (25/8‐14) OSEFX FUND COMPOSITION END OF MONTH Real Estate 0.5% 10 largest positions Energy 18.9% Aker BP ASA 5.1 % Lerøy Seafood Group 3.9 % Industrials 10.2% Kongsberg Gruppen ASA 5.0 % Europris ASA 3.8 % Health Care 0.0% Schibsted ASA 4.7 % Elkem ASA 3.7 % Consumer Discretionary 5.5% Aker ASA 4.2 % Telenor ASA 3.7 % Materials 11.6% Yara International ASA 4.1 % DNB Bank ASA 3.3 % Information Technology 6.1% Financials 25.5% 5 largest overweights +/‐ 5 largest underweights +/‐ Consumer Staples 14.2% Kongsberg Gruppen 3.8 % Equinor ASA ‐8.8 % Telecommunication Services 3.8% Elkem ASA 3.7 % Mowi ASA ‐6.7 % Utilities 1.6% Europris ASA 3.4 % Telenor ‐5.6 % Oslo Børs VPS Holding A 3.2 % DNB ASA ‐5.4 % 0% 5% 10% 15% 20% 25% 30% Sbanken ASA 2.7 % Orkla ‐4.4 % FUND PERFORMANCE AND RISK FIGURES —CLASS B NOK (FORMER CLASS A) 3 6 Since Month months months YTD 1 year 3 years launch Fund 0.4 % 12.2 % ‐3.3 % 12.2 % 13.1 % 59.5 % 73.5 % Benchmark 0.1 % 8.6 % ‐6.9 % 8.6 % 8.7 % 47.1 % 43.7 % Difference 0.3 % 3.5 % 3.6 % 3.5 % 4.4 % 12.4 % 29.8 % Vinx Nordic Net, NOK 1.2 % 8.7 % ‐0.4 % 8.7 % 7.3 % 25.7 % 59.3 % Euro Stoxx 600, EUR 2.1 % 13.0 % ‐0.1 % 13.0 % 5.2 % 22.2 % 25.6 % S&P 500 TR, USD 1.9 % 13.6 % ‐1.7 % 13.6 % 9.5 % 46.3 % 56.0 % MSCI AC World, LC 1.6 % 12.3 % ‐1.8 % 12.3 % 5.6 % 37.4 % 39.4 % 5 top contribut. Fund Fund Contri‐ 5 bottom contribut. Fund Fund Contri‐ year to date weight return bution year to date weight return bution Aker Bp Asa 5.1 % 43.2 % 1.88 % Leroy Seafood Group 3.4 % ‐5.1 % ‐0.19 % Aker Asa‐A Shares 3.7 % 42.4 % 1.33 % Veidekke Asa 1.8 % ‐6.6 % ‐0.14 % Elkem Asa 3.5 % 37.7 % 1.18 % Norsk Hydro Asa 1.1 % ‐10.9 % ‐0.10 % Schibsted Asa‐B Shs 5.0 % 17.7 % 0.85 % Fjord1 Asa 1.7 % ‐1.6 % ‐0.02 % Tomra Systems Asa 2.7 % 31.9 % 0.81 % Nordea Bank Abp 1.8 % ‐0.7 % ‐0.01 % Standard Sharpe Tracking Information Portfolio characteristics Deviation Ratio Error Ratio Arctic Norwegian Value Creation 10.9 % 1.5 4.3 % 0.7 Benchmark 10.0 % 1.3 *) Based on 36 months performance Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD 2019 6.64 % 4.75 % 0.42 % 12.17 % 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 % 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 subscripon and management fees. 80.0 % The return may become negave as a result of negave price develop‐ 60.0 % ments. Arcc Fund Management AS seeks to the best of its ability to ensure that all informaon given in this report is correct, however, makes reserva‐ 40.0 % ons regarding possible errors and omissions. Statements in the report reflect the porolio managers’ viewpoint at a given me, and this view‐ 20.0 % point may be changed without noce. The report should not be perceived as an offer or recommendaon to buy or sell financial instruments. Arcc 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 Arcc Fund Management AS may be owners of securies 08/14 01/15 06/15 11/15 04/16 09/16 02/17 07/17 12/17 05/18 10/18 03/19 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 porolio. .

Load more