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investment philosophy works and that we deliver world-class returns. Page 70 Page returns. world-class deliver we that and works philosophy investment
ves that our our that ves pro recognition international This 2006. in prizes and awards of number a received have managers portfolio our and Funds SKAGEN
Awards and commendations and Awards
share in our clients’ happiness. happiness. clients’ our in share
terms. Our fixed income funds also achieved a very competitive return. We We return. competitive very a achieved also funds income fixed Our terms. Board of directors’ report on page 44 page on report directors’ of Board
and the Netherlands. Read more in the the in more Read Netherlands. the and
2006 our equity funds delivered good returns, both in absolute and relative relative and absolute in both returns, good delivered funds equity our 2006
approval to market its funds in Finland Finland in funds its market to approval
outside the Nordic region, obtaining obtaining region, Nordic the outside
Never before have so many benefited from our funds’ performance. In In performance. funds’ our from benefited many so have before Never
increased its activities in countries countries in activities its increased
During 2006 SKAGEN Funds Funds SKAGEN 2006 During
New markets New
spending. Page 18 Page spending.
owned conglomerates and capital capital and conglomerates owned
globalisation, inflation, large, family family large, inflation, globalisation,
year. Read more about the themes themes the about more Read year.
why 2007 will be yet another good good another yet be will 2007 why
Our portfolio managers see four reasons reasons four see managers portfolio Our
Outlook 2007 Outlook
not an occupation. Page 14 Page occupation. an not
Weintraub it is all about a way of life, life, of way a about all is it Weintraub
investor”. For Portfolio manager Filip Filip manager Portfolio For investor”.
“I don’t work as an investor, I AM an an AM I investor, an as work don’t “I
investment
The art of of art The
year
successful
Another Another
Annual report 2006 report Annual
F SKAGEN
UNDS
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advisor for SKAGEN Funds in Oslo, Norway Oslo, in Funds SKAGEN for advisor
Front page photo: Liv Berit Oseid works as a client client a as works Oseid Berit Liv photo: page Front
has been excluded in this English language publication. publication. language English this in excluded been has
these funds from the Norwegian version of the report report the of version Norwegian the from funds these
dited information hereto. Other information regarding regarding information Other hereto. information dited
these funds is included in the official accounts and au- and accounts official the in included is funds these
Høyrente Institusjon in Norway. Information regarding regarding Information Norway. in Institusjon Høyrente
money market funds SKAGEN Høyrente and SKAGEN SKAGEN and Høyrente SKAGEN funds market money
SKAGEN Funds only has authorisation to market its its market to authorisation has only Funds SKAGEN
Where to find us find to Where 72
unless otherwise stated. stated. otherwise unless
All figures quoted in the report are in Norwegian kroner kroner Norwegian in are report the in quoted figures All
Client communication in SKAGEN SKAGEN in communication Client
www.skagenfondene.no.
Community contribution Community 71 version of the Annual Report 2006 is available on on available is 2006 Report Annual the of version
lation, the Norwegian text shall prevail. The Norwegian Norwegian The prevail. shall text Norwegian the lation,
flict between the Norwegian text and the English trans- English the and text Norwegian the between flict Awards and commendations and Awards 70
sions as well as erroneous translation. In case of con- of case In translation. erroneous as well as sions
with reservations regarding possible errors and omis- and errors possible regarding reservations with
Auditor’s report Auditor’s 69
Norwegian. This is a translated version that is published published is that version translated a is This Norwegian.
The Annual Report 2006 was originally prepared in in prepared originally was 2006 Report Annual The
SKAGEN Tellus Tellus SKAGEN 68
IMPORTANT INFORMATION IMPORTANT SKAGEN Avkastning SKAGEN 63
SKAGEN Kon-Tiki SKAGEN 60
Denmark, Sweden and Luxembourg. and Sweden Denmark,
Funds is a member of trade associations in Norway, Norway, in associations trade of member a is Funds
SKAGEN Global Global SKAGEN 57
The company’s auditors are PWC and KPMG. SKAGEN SKAGEN KPMG. and PWC are auditors company’s The
tered in the Central Securities Depository (of Norway). Norway). (of Depository Securities Central the in tered
Handelsbanken, and the units of the funds are regis- are funds the of units the and Handelsbanken, SKAGEN Vekst SKAGEN 54
(Kredittilsynet). The trustee bank is Svenska Svenska is bank trustee The (Kredittilsynet).
the Financial Supervisory Authority of Norway Norway of Authority Supervisory Financial the
General notes General 51
SKAGEN Funds is under the direct supervision of of supervision direct the under is Funds SKAGEN
Annual accounts Annual 50 geographic and sector balance. sector and geographic
the world. We minimise risk by maintaining a sensible sensible a maintaining by risk minimise We world. the
ers can select companies from equity markets around around markets equity from companies select can ers
Board of directors’ report directors’ of Board 44
funds have broad mandates, and our portfolio manag- portfolio our and mandates, broad have funds
ing undervalued, under-researched and unpopular. Our Our unpopular. and under-researched undervalued, ing
Fund rankings Fund 43 with a low price-tag; companies characterised by be- by characterised companies price-tag; low a with
a bottom-up approach, finding high quality companies companies quality high finding approach, bottom-up a
stock-pickers, and when selecting companies, we take take we companies, selecting when and stock-pickers, measurements
aged according to this same philosophy. We are active active are We philosophy. same this to according aged
the company started in 1993 and all funds are man- are funds all and 1993 in started company the efrac n ik risk and Performance 42
losophy. This philosophy has not been changed since since changed been not has philosophy This losophy.
by pursuing an applied value-based investment phi- investment value-based applied an pursuing by
on the funds the on
with the best possible risk adjusted return. We do so so do We return. adjusted risk possible best the with
SKAGEN Funds’ sole objective is to provide its clients clients its provide to is objective sole Funds’ SKAGEN
Portfolio managers’ report report managers’ Portfolio 26
Finland. Finland.
2007 – the year ahead ahead year the – 2007 Denmark, Sweden, Luxembourg, the Netherlands and and Netherlands the Luxembourg, Sweden, Denmark,
rently have approval to market our funds in Norway, Norway, in funds our market to approval have rently
Portfolio managers’ report: report: managers’ Portfolio 18 international market are UCITS III compliant. We cur- We compliant. III UCITS are market international
Avkastning and SKAGEN Tellus. All our funds for the the for funds our All Tellus. SKAGEN and Avkastning
and SKAGEN Kon-Tiki, and the bond funds SKAGEN SKAGEN funds bond the and Kon-Tiki, SKAGEN and with Filip Weintraub Weintraub Filip with
funds; the equity funds SKAGEN Vekst, SKAGEN Global Global SKAGEN Vekst, SKAGEN funds equity the funds;
of Norway we have approval to market five retail retail five market to approval have we Norway of Portrait interview interview Portrait 14
and denominated in Norwegian Kroner (NOK). Outside Outside (NOK). Kroner Norwegian in denominated and
institutional), all of which are domiciled in Norway Norway in domiciled are which of all institutional),
Portfolio managers Portfolio 10
SKAGEN Funds manages seven funds (both retail and and retail (both funds seven manages Funds SKAGEN
Stockholm and Copenhagen. Copenhagen. and Stockholm History milestones History 9
headquartered in Stavanger, Norway, and has offices in in offices has and Norway, Stavanger, in headquartered
and almost 120,000 direct clients. The company is is company The clients. direct 120,000 almost and
From contender to market leader market to contender From 6
approximately seven billion Euro under management management under Euro billion seven approximately
internationally. At the end of 2006 the company had had company the 2006 of end the At internationally.
Leader 4 with increasing activities in the Nordic countries and and countries Nordic the in activities increasing with
of the largest fund management companies in Norway, Norway, in companies management fund largest the of
pany has enjoyed a spectacular growth to become one one become to growth spectacular a enjoyed has pany
Funds overview Funds 3
was established in 1993, and since start-up the com- the start-up since and 1993, in established was
and fixed income fund management. SKAGEN Funds Funds SKAGEN management. fund income fixed and
Welcome to SKAGEN to Welcome 2
management company whose sole business is equity equity is business sole whose company management
SKAGEN Funds is an independent and partner owned owned partner and independent an is Funds SKAGEN
WELCOME TO SKAGEN FUNDS SKAGEN TO WELCOME CONTENTS
2 ANNUAL REPORT 2006 • SKAGEN FUNDS • FUNDS SKAGEN • 2006 REPORT ANNUAL CONTENTS • WELCOME TO SKAGEN FUNDS SKAGEN TO WELCOME • CONTENTS
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Lehman Global Treasury Index 3-5 yrs (NOK) yrs 3-5 Index Treasury Global Lehman
Tellus
-3
-2
29.09.2006
-1
RETURN SINCE START SINCE RETURN
0
-2.9
AVERAGE ANNUAL ANNUAL AVERAGE 0.7
1
2
3
4
%
2 557 (2006) 557 2 holders unit of Number
(2006) 574 (MNOK) assets Total
29th September 2006 September 29th Start
Torgeir Høien Torgeir Manager
SKAGEN Tellus SKAGEN
ST4X Governnment Bond Index Bond Governnment ST4X ST4X Governnment Bond Index Bond Governnment ST4X
OSE Benchmark Index Benchmark OSE OSE Benchmark Index Benchmark OSE
0
0.9
5
10
13.2
15
3.9 20
22.2
25
30
6.4
32.4
6.8 32.5
35
% %
RETURN SINCE START SINCE RETURN RETURN SINCE START SINCE RETURN
RETURN 2006 RETURN RETURN 2006 RETURN
AVERAGE ANNUAL ANNUAL AVERAGE AVERAGE ANNUAL ANNUAL AVERAGE
(2005) (2005) 827 2 and (2006) 020 3 (MNOK) assets Total and 8 254 (2005) (2005) 254 8 and (2006) 698 11 (MNOK) assets Total
16th September 1994 September 16th Start 1st December 1993 December 1st Start
Ross Porter Ross Manager Kristian Falnes Kristian Manager
SKAGEN Avkastning SKAGEN SKAGEN Vekst SKAGEN
MSCI World Index (NOK) Index World MSCI MSCI World Index (NOK) Index World MSCI
MSCI Emerging Markets Index (NOK) Index Markets Emerging MSCI MSCI Emerging Markets Index (NOK) Index Markets Emerging MSCI
0
3.3
5
10
10.8
15
16.7
20
24.1
22.0
23.8 22.8
25
30
31.7
35
RETURN SINCE START SINCE RETURN RETURN SINCE START SINCE RETURN
RETURN 2006 RETURN RETURN 2006 RETURN
AVERAGE ANNUAL ANNUAL AVERAGE AVERAGE ANNUAL ANNUAL AVERAGE
and 13 828 (2005) (2005) 828 13 and (2006) 113 22 (MNOK) assets Total and 8 749 (2005) (2005) 749 8 and (2006) 918 13 (MNOK) assets Total
8th August 1997 August 8th Start 14th March 2003 March 14th Start
Filip Weintraub Filip Manager J. Kristoffer C. Stensrud C. Kristoffer J. Manager
SKAGEN Global SKAGEN SKAGEN Kon-Tiki SKAGEN
a 20 percent average annual return in the long-term. the in return annual average percent 20 a
tive benchmark indices, and our equity funds exceeded our objective of achieving achieving of objective our exceeded funds equity our and indices, benchmark tive
2006 was a good year for our unit holders. All our funds outperformed their respec- their outperformed funds our All holders. unit our for year good a was 2006
World class returns class World
3 WORLD CLASS RETURNS RETURNS CLASS WORLD • ANNUAL REPORT 2006 • SKAGEN FUNDS SKAGEN • 2006 REPORT ANNUAL •
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equity funds and 6.2 billion in fixed income funds. funds. income fixed in billion 6.2 and funds equity the realisation of this ambition. this of realisation the
were NOK 58.2 billion, of which 52.0 billion were in in were billion 52.0 which of billion, 58.2 NOK were 2006 achievements made an important contribution to to contribution important an made achievements 2006
Total assets under management at the end of 2006 2006 of end the at management under assets Total excess returns and avoiding major capital losses. Our Our losses. capital major avoiding and returns excess
12 months, but to be best in the long term by achieving achieving by term long the in best be to but months, 12
its launch in 2002. 2002. in launch its Our ambition is not to be the best fund over the past past the over fund best the be to not is ambition Our
The fund has beaten its benchmark in every year since since year every in benchmark its beaten has fund The
centage points better than the Emerging Market Index. Index. Market Emerging the than better points centage beaten its benchmark (ST4X) by a strong 3.0 percent. percent. 3.0 strong a by (ST4X) benchmark its beaten
Tiki rose by 22.8 percent in 2006, which was 0.8 per- 0.8 was which 2006, in percent 22.8 by rose Tiki the end of December, the fund had risen 3.9 percent and and percent 3.9 risen had fund the December, of end the
contributed to the fund’s achievement. SKAGEN Kon- SKAGEN achievement. fund’s the to contributed SKAGEN Avkastning delivered a strong second half. At At half. second strong a delivered Avkastning SKAGEN
very strong performance from the international portfolio portfolio international the from performance strong very
Good results from the fund’s Norwegian portfolio and and portfolio Norwegian fund’s the from results Good NOK. NOK.
the world’s best performing stock exchanges in 2006. 2006. in exchanges stock performing best world’s the giving an excess return of 3.5 percent measured in in measured percent 3.5 of return excess an giving
invested on the Oslo Stock Exchange, which was among among was which Exchange, Stock Oslo the on invested The fund’s return for the first quarter was 0.7 percent, percent, 0.7 was quarter first the for return fund’s The
achievement, because only half of the fund’s assets are are assets fund’s the of half only because achievement, as a result of changes in the Euro/NOK exchange rates. rates. exchange Euro/NOK the in changes of result a as
ahead of the Oslo Stock Exchange. This is a strong strong a is This Exchange. Stock Oslo the of ahead in NOK, the fund has experienced value fluctuations fluctuations value experienced has fund the NOK, in
increased 32.5 percent and was 0.1 percentage points points percentage 0.1 was and percent 32.5 increased 3.6 percent better than its benchmark index. Measured Measured index. benchmark its than better percent 3.6
the World Index every year since 1997. SKAGEN Vekst Vekst SKAGEN 1997. since year every Index World the percent in the fund’s base currency, the Euro. This is is This Euro. the currency, base fund’s the in percent
ahead of the World Index. The fund has outperformed outperformed has fund The Index. World the of ahead did well in its first quarter, delivering a return of 1.4 1.4 of return a delivering quarter, first its in well did
risen by 24.1 percent and was 13.3 percentage points points percentage 13.3 was and percent 24.1 by risen out of the Norwegian fixed income markets. The fund fund The markets. income fixed Norwegian the of out
benchmarks. At the end of 2006, SKAGEN Global had had Global SKAGEN 2006, of end the At benchmarks. number of clients who want to diversify their holdings holdings their diversify to want who clients of number
in excess of 20 percent! All funds beat their respective respective their beat funds All percent! 20 of excess in product range. This is important for an increasing increasing an for important is This range. product
had provided their unit holders with an annual return return annual an with holders unit their provided had global bond fund – and that we are able to offer a wider wider a offer to able are we that and – fund bond global
As 2006 drew to a close, the SKAGEN equity funds funds equity SKAGEN the close, a to drew 2006 As that our clients are now able to invest their assets in a a in assets their invest to able now are clients our that
The launch of SKAGEN Tellus in September means means September in Tellus SKAGEN of launch The Returns of over 20 percent 20 over of Returns
New fixed income fund income fixed New
world-class returns to our unit holders. holders. unit our to returns world-class
focus we have delivered another year of of year another delivered have we focus
adjusted return possible, says Managing director Harald Espedal. Espedal. Harald director Managing says possible, return adjusted
another year where we provide our unit holders with the best risk risk best the with holders unit our provide we where year another
year. This inspires us to do our utmost to ensure that 2007 is yet yet is 2007 that ensure to utmost our do to us inspires This year.
the best – not the biggest – and with that that with and – biggest the not – best the
Thank you for the confidence you have shown in us once again this this again once us in shown have you confidence the for you Thank
and new employees. Our objective is to be be to is objective Our employees. new and
of countries where we market the funds funds the market we where countries of
ents, assets under management, number number management, under assets ents,
and grown in terms of number of cli- of number of terms in grown and
have received international recognition recognition international received have
took a big step out into the world. We We world. the into out step big a took
2006 was the year when SKAGEN really really SKAGEN when year the was 2006
A GOOD YEAR FOR CLIENTS FOR YEAR GOOD A
Expanding horizons Expanding
GOING INTERNATIONAL AND DELIVERING STRONG RESULTS STRONG DELIVERING AND INTERNATIONAL GOING
4 ANNUAL REPORT 2006 • SKAGEN FUNDS • FUNDS SKAGEN • 2006 REPORT ANNUAL LEADER
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equity fund provider, with a market share of 25 percent. At At percent. 25 of share market a with provider, fund equity companies and fixed income markets. income fixed and companies
Association (VFF), SKAGEN Funds is Norway’s largest largest Norway’s is Funds SKAGEN (VFF), Association time and more skills are available for the analysis of of analysis the for available are skills more and time
According to figures from the Norwegian Mutual Fund Fund Mutual Norwegian the from figures to According equity and the fixed income teams. This means more more means This teams. income fixed the and equity
size during the year, with a reinforcement of both the the both of reinforcement a with year, the during size Market shares – More satisfied clients clients satisfied More – shares Market
markets. The portfolio department almost doubled in in doubled almost department portfolio The markets.
in step with increased activity and entry into new new into entry and activity increased with step in ance opportunities for our portfolio companies. companies. portfolio our for opportunities ance
of the company’s areas of competence, and has been been has and competence, of areas company’s the of in 2007. We are optimistic with respect to the perform- the to respect with optimistic are We 2007. in
during the year. The increase has taken place in most most in place taken has increase The year. the during addition, we expect good global economic growth also also growth economic global good expect we addition,
The number of employees increased from 59 to 94 94 to 59 from increased employees of number The researched and unpopular companies to invest in. In In in. invest to companies unpopular and researched
valued. There is a good supply of undervalued, under- undervalued, of supply good a is There valued. Strengthening the organisation the Strengthening
ties, in spite of super performance, are still cheaply cheaply still are performance, super of spite in ties,
the Vestfold area to get in touch with us. us. with touch in get to area Vestfold the As we enter 2007 we are of the opinion that equi- that opinion the of are we 2007 enter we As
with two employees, making it easier for our clients in in clients our for easier it making employees, two with
In Norway, SKAGEN opened a new office in Tønsberg, Tønsberg, in office new a opened SKAGEN Norway, In ations becoming appreciably more expensive. expensive. more appreciably becoming ations
lead to an increase in share prices without equity valu- equity without prices share in increase an to lead
Iceland, and we expect an answer early in 2007. 2007. in early answer an expect we and Iceland, and increased equity for our portfolio companies. This This companies. portfolio our for equity increased and
tion for marketing authorisation has been submitted in in submitted been has authorisation marketing for tion world, with the associated significant earnings growth growth earnings significant associated the with world,
Finland, Luxembourg and the Netherlands. An applica- An Netherlands. the and Luxembourg Finland, 2006 gave strong economic growth in most of the the of most in growth economic strong gave 2006
Norway, Sweden, Denmark, Denmark, Sweden, Norway, slightly. As we predicted, predicted, we As slightly.
sation to market its funds in in funds its market to sation the long interest rates rose rose rates interest long the
unit holders unit
SKAGEN has had authori- had has SKAGEN Annual Report, whereas whereas Report, Annual
er. During the past year, year, past the During er. we predicted in the 2005 2005 the in predicted we
returns to our our to returns
as a Nordic fund provid- fund Nordic a as rose somewhat more than than more somewhat rose
tion of SKAGEN Funds Funds SKAGEN of tion rates in Western countries countries Western in rates
delivered world-class world-class delivered
and consolidated the posi- the consolidated and In 2006, the short interest interest short the 2006, In
in Copenhagen, Denmark, Denmark, Copenhagen, in
Prospects for 2007 2007 for Prospects
once again this year year this again once
doors of our new office office new our of doors
In 2006, we opened the the opened we 2006, In formance is world-class. world-class. is formance
focus we have have we focus
market – and that our per- our that and – market
Authority. Authority. thousands of funds in this this in funds of thousands
and with this in in this with and
Swedish Premium Pension Pension Premium Swedish stands out from the many many the from out stands
ers through PPM, the the PPM, through ers way of managing the funds funds the managing of way
- not the largest - - largest the not -
about 100,000 custom- 100,000 about philosophy and that our our that and philosophy
rect Swedish clients, and and clients, Swedish rect ognition of our investment investment our of ognition
be the best best the be
we have around 3,000 di- 3,000 around have we nomination, which is rec- is which nomination,
billion. At the end of 2006, 2006, of end the At billion. Awards. We treasure the the treasure We Awards.
Our goal is to to is goal Our
has now passed SEK seven seven SEK passed now has year 2006 by Funds Europe Europe Funds by 2006 year
one billion. The amount amount The billion. one Investment Director of the the of Director Investment
ket were just under SEK SEK under just were ket candidates for European European for candidates
years ago, assets under management in the Swedish mar- Swedish the in management under assets ago, years Kristoffer Stensrud was nominated as one of three three of one as nominated was Stensrud Kristoffer
When the Stockholm office opened a little over two two over little a opened office Stockholm the When
net subscriptions of any equity fund manager in Sweden. Sweden. in manager fund equity any of subscriptions net outstanding investment companies in 2006. 2006. in companies investment outstanding
uity fund savers, and in 2006 SKAGEN had the highest highest the had SKAGEN 2006 in and savers, fund uity as an Equity firm to watch, when it awarded prizes to to prizes awarded it when watch, to firm Equity an as
one else attracted as much new capital from Swedish eq- Swedish from capital new much as attracted else one Global Investor Magazine selected SKAGEN Funds Funds SKAGEN selected Magazine Investor Global
2006 Swedish customers really discovered our funds. No No funds. our discovered really customers Swedish 2006
SKAGEN Funds is still a small player in Sweden, but in in but Sweden, in player small a still is Funds SKAGEN Morningstar.
methods to evaluate the funds, in the same way as e.g. e.g. as way same the in funds, the evaluate to methods
to good management of their money. money. their of management good to petitors in the same class. Lipper uses quantitative quantitative uses Lipper class. same the in petitors
– but because we meet client expectations with respect respect with expectations client meet we because but – and most consistent performance relative to com- to relative performance consistent most and
in terms of new countries nor the number of clients clients of number the nor countries new of terms in and fund managers who have achieved the strongest strongest the achieved have who managers fund and
fied clients are not a result of our expansion – neither neither – expansion our of result a not are clients fied this prestigious awards event, which rewards funds funds rewards which event, awards prestigious this
tion and competent follow-up. We recognise that satis- that recognise We follow-up. competent and tion In addition, our equity funds won five other prizes at at prizes other five won funds equity our addition, In
best possible risk-adjusted return, service, communica- service, return, risk-adjusted possible best equity fund manager among smaller fund companies. companies. fund smaller among manager fund equity
our outmost to reach our objective of delivering the the delivering of objective our reach to outmost our SKAGEN Funds was awarded the prize for the best best the for prize the awarded was Funds SKAGEN
We thank our clients for their confidence and will do do will and confidence their for clients our thank We During the Lipper Fund Europe Awards 2006, 2006, Awards Europe Fund Lipper the During
the end of the year, we had over 119,000 clients in Norway. Norway. in clients 119,000 over had we year, the of end the International recognition International
5 • ANNUAL REPORT 2006 • SKAGEN FUNDS SKAGEN • 2006 REPORT ANNUAL • LEADER
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to market leader market to
From contender contender From
6 ANNUAL REPORT 2006 • SKAGEN FUNDS • FUNDS SKAGEN • 2006 REPORT ANNUAL FROM CONTENDER TO MARKET LEADER MARKET TO CONTENDER FROM
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>> CONTINUED NEXT PAGE NEXT CONTINUED
several European countries. It all started with three enthusiasts. three with started all It countries. European several
fund manager into a major manager with activities in Scandinavia and and Scandinavia in activities with manager major a into manager fund
Over the past 13 years, SKAGEN has developed from being a small, local local small, a being from developed has SKAGEN years, 13 past the Over
7 FROM CONTENDER TO MARKET LEADER MARKET TO CONTENDER FROM • ANNUAL REPORT 2006 • SKAGEN FUNDS SKAGEN • 2006 REPORT ANNUAL •
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• Assets under management passed one billion NOK billion one passed management under Assets •
• Office established in Ålesund in established Office •
(Dine Penger), due to its good returns and low risk low and returns good its to due Penger), (Dine • Our funds approved for sale in Sweden and Denmark and Sweden in sale for approved funds Our •
• SKAGEN Vekst selected as the best AMS fund by the media media the by fund AMS best the as selected Vekst SKAGEN • • SKAGEN Kon-Tiki launched April 5th April launched Kon-Tiki SKAGEN •
• SKAGEN Global launched August 8th August launched Global SKAGEN • 2002
1997
• Assets under management passed five billion NOK billion five passed management under Assets •
scheme) fund of the year, among a total of 22 funds 22 of total a among year, the of fund scheme) time
• SKAGEN Vekst selected as AMS (tax free investment investment free (tax AMS as selected Vekst SKAGEN • • SKAGEN offers defined contribution pensions for the first first the for pensions contribution defined offers SKAGEN •
• The SKAGEN Avkastning bond fund launched September 16th September launched fund bond Avkastning SKAGEN The • • Offices established in Bergen and Trondheim and Bergen in established Offices •
1994 2001
• 448 unit holders, and assets under management of 20 MNOK 20 of management under assets and holders, unit 448 • • Office established in Oslo in established Office •
• The SKAGEN Vekst equity fund launched December 1st December launched fund equity Vekst SKAGEN The • market (Dine Penger) (Dine market
age mutual funds mutual age • SKAGEN Vekst again selected as the best AMS fund on the the on fund AMS best the as selected again Vekst SKAGEN •
from the Financial Supervisory Authority of Norway to man- to Norway of Authority Supervisory Financial the from September 18th September
• Stavanger Fondsforvaltning AS was granted authorisation authorisation granted was AS Fondsforvaltning Stavanger • • The SKAGEN Høyrente money market fund launched launched fund market money Høyrente SKAGEN The •
1993 1998
SKAGEN FUNDS MILESTONES FUNDS SKAGEN
with other forms of saving. Saving in funds is a simple simple a is funds in Saving saving. of forms other with Funds may be the most strictly regulated investment investment regulated strictly most the be may Funds
To save in a fund has a number of advantages compared compared advantages of number a has fund a in save To you want – for almost any amount you may wish. wish. may you amount any almost for – want you
and flexibility. You may buy and sell units whenever whenever units sell and buy may You flexibility. and Why save in funds? in save Why
By saving in funds you have a great degree of freedom freedom of degree great a have you funds in saving By
boat as the unit holders. unit the as boat
invested in the funds, and are therefore in the same same the in therefore are and funds, the in invested creation taking place in companies worldwide. companies in place taking creation
The owners have large parts of their personal wealth wealth personal their of parts large have owners The and inexpensive way for you to participate in the value value the in participate to you for way inexpensive and
Falnes (2.0 percent) and Filip Weintraub (2.0 percent). percent). (2.0 Weintraub Filip and percent) (2.0 Falnes
Espedal (2.0 percent), and portfolio managers Kristian Kristian managers portfolio and percent), (2.0 Espedal
SKAGEN Funds the leader it is today. is it leader the Funds SKAGEN
(35.25 percent), as well as Managing Director Harald Harald Director Managing as well as percent), (35.25
conscious of the employees’ contribution to making making to contribution employees’ the of conscious
Åge K. Westbø (23.5 percent), Tor Dagfinn Veen Veen Dagfinn Tor percent), (23.5 Westbø K. Åge
The Chairman of the Board, Martin Gjelsvik, is very very is Gjelsvik, Martin Board, the of Chairman The
by its founders, Kristoffer Stensrud (35.25 percent), percent), (35.25 Stensrud Kristoffer founders, its by
December 2002. The management company is owned owned is company management The 2002. December
Harald Espedal has been Managing Director since since Director Managing been has Espedal Harald
management of its portfolios since the start. the since portfolios its of management
management philosophy has been the basis for the the for basis the been has philosophy management
invested in global equity markets. SKAGEN’s active active SKAGEN’s markets. equity global in invested
tion. Large parts of the equity funds’ assets are broadly broadly are assets funds’ equity the of parts Large tion.
SKAGEN immediately gaining a strong global orienta- global strong a gaining immediately SKAGEN
Knowledge of international equity markets resulted in in resulted markets equity international of Knowledge
Veen, had long experience from the securities markets. securities the from experience long had Veen,
J. Kristoffer Stensrud, Åge K. Westbø and Tor Dagfinn Dagfinn Tor and Westbø K. Åge Stensrud, Kristoffer J.
Even before the start in 1993, the founders of the company, company, the of founders the 1993, in start the before Even
iar with. iar
it is the brand name, SKAGEN, that clients are famil- are clients that SKAGEN, name, brand the is it
of the company is Stavanger Fondsforvaltning AS, but but AS, Fondsforvaltning Stavanger is company the of
funds and four are fixed income funds. The legal name name legal The funds. income fixed are four and funds
pany manages seven funds, of which three are equity equity are three which of funds, seven manages pany
was with one fund – SKAGEN Vekst. Today, the com- the Today, Vekst. SKAGEN – fund one with was
When SKAGEN was founded on December 1st 1993, it it 1993, 1st December on founded was SKAGEN When
8 ANNUAL REPORT 2006 • SKAGEN FUNDS • FUNDS SKAGEN • 2006 REPORT ANNUAL FROM CONTENDER TO MARKET LEADER MARKET TO CONTENDER FROM
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Luxembourg
• SKAGEN Funds received approval to market its funds in in funds its market to approval received Funds SKAGEN •
• Assets under management pass 39 billion NOK billion 39 pass management under Assets •
SKAGEN becomes Norway’s largest equity fund manager (VFF) manager fund equity largest Norway’s becomes SKAGEN • •
• SKAGEN Global upgraded to AAA rating by S&P by rating AAA to upgraded Global SKAGEN •
2005
• Assets under management reach almost 20 billion NOK billion 20 almost reach management under Assets •
• Office established in Stockholm in established Office • • Assets under management passed 58 billion NOK billion 58 passed management under Assets •
We become Norway’s second largest equity fund manager (VFF) manager fund equity largest second Norway’s become We • • • SKAGEN wins six awards at the Lipper Awards Europe 2006 Europe Awards Lipper the at awards six wins SKAGEN •
rating by S&P by rating Investment Fund Association) Fund Investment
• SKAGEN Global and SKAGEN Kon-Tiki upgraded to AA AA to upgraded Kon-Tiki SKAGEN and Global SKAGEN • and has the highest net subscriptions in Sweden (Swedish (Swedish Sweden in subscriptions net highest the has and
2004 • SKAGEN is Norway’s largest equity fund manager (VFF) (VFF) manager fund equity largest Norway’s is SKAGEN •
• Offices established in Tønsberg and Copenhagen Copenhagen and Tønsberg in established Offices •
• Assets under management passed 12 billion NOK billion 12 passed management under Assets • • SKAGEN Tellus launched September 29th September launched Tellus SKAGEN •
& Poor’s (S&P) Poor’s & and Finland and
• All our three equity funds received A rating from Standard Standard from rating A received funds equity three our All • • SKAGEN Funds are approved for sale in the Netherlands Netherlands the in sale for approved are Funds SKAGEN •
• SKAGEN Høyrente Institusjon launched March 14th March launched Institusjon Høyrente SKAGEN • • SKAGEN Vekst upgraded to AAA rating by S&P by rating AAA to upgraded Vekst SKAGEN •
2003 2006
of a unit holder democracy. We introduced a nominat- a introduced We democracy. holder unit a of and international expansion, Mr. Gjelsvik concludes. Gjelsvik Mr. expansion, international and
From the very start, we have stressed the development development the stressed have we start, very the From competencies within marketing, personnel development development personnel marketing, within competencies
think management has benefited from the Directors’ broad broad Directors’ the from benefited has management think
sus with respect to important decisions, says Mr. Gjelsvik. Mr. says decisions, important to respect with sus quality and thus our existing unit holders. In this context, I I context, this In holders. unit existing our thus and quality
among the Directors, and we emphasise achieving consen- achieving emphasise we and Directors, the among we have experienced in recent years does not compromise compromise not does years recent in experienced have we
- It has been important to develop a sense of community community of sense a develop to important been has It - - The Directors are committed to ensuring that the growth growth the that ensuring to committed are Directors The -
representing the unit holders. unit the representing
standing the company’s outstanding success. outstanding company’s the standing tors: Directors representing the owners, and Directors Directors and owners, the representing Directors tors:
and creative employee community, and is key to under- to key is and community, employee creative and The Board of Directors consists of two groups of direc- of groups two of consists Directors of Board The
The SKAGEN bonus system encourages an effective effective an encourages system bonus SKAGEN The
tion, says Martin Gjelsvik, Chairman of the Board. the of Chairman Gjelsvik, Martin says tion,
company for the benefit of the unit holders. unit the of benefit the for company strategic, and we also have an important control func- control important an have also we and strategic,
returns in the form of employees who stay with the the with stay who employees of form the in returns start-up phase. Now, the role of the Directors is more more is Directors the of role the Now, phase. start-up
that investments in competency building result in good good in result building competency in investments that the competence of the Directors was important in the the in important was Directors the of competence the
the company is able to attract the best employees, and and employees, best the attract to able is company the - In the beginning, the management team was small, and and small, was team management the beginning, the In -
Good wage and bonus arrangements also mean that that mean also arrangements bonus and wage Good
pany’s operations. pany’s
utilised for the benefits of the unit holders. unit the of benefits the for utilised Fondsforvaltning have played an active role in the com- the in role active an played have Fondsforvaltning
remain with the company, and that their competencies are are competencies their that and company, the with remain Ever since the start in 1993, the Directors of Stavanger Stavanger of Directors the 1993, in start the since Ever
bonuses come in. The bonus scheme ensures that people people that ensures scheme bonus The in. come bonuses Active Board of Directors of Board Active
retention of these skill sets in the company. This is where where is This company. the in sets skill these of retention
employee qualifications and personal improvement, and the the and improvement, personal and qualifications employee offices in Stockholm and Copenhagen. and Stockholm in offices
have been in favour of investing in the development of of development the in investing of favour in been have have also expanded to Sweden and Denmark, with with Denmark, and Sweden to expanded also have
possible with highly qualified people. Thus, the Directors Directors the Thus, people. qualified highly with possible Oslo, Bergen, Tønsberg, Trondheim and Ålesund. We We Ålesund. and Trondheim Tønsberg, Bergen, Oslo,
bonus schemes. Achieving the SKAGEN ambition is only only is ambition SKAGEN the Achieving schemes. bonus The main office is in Stavanger, with branch offices in in offices branch with Stavanger, in is office main The
- Every year we discuss the company’s personnel policy and and policy personnel company’s the discuss we year Every - At the start of 2007, SKAGEN Funds had 94 employees. employees. 94 had Funds SKAGEN 2007, of start the At
in Copenhagen in
development of personnel policies at SKAGEN. at policies personnel of development Six offices in Norway, one in Stockholm, one one Stockholm, in one Norway, in offices Six
The Directors are important discussion partners for the the for partners discussion important are Directors The
our funds. our
and ranked daily, so it is easy to get information about about information get to easy is it so daily, ranked and requirement, the Chairman continues. Chairman the requirement,
protection for clients. Each fund is valued, analysed analysed valued, is fund Each clients. for protection resenting the unit holders before it became a statutory statutory a became it before holders unit the resenting
vehicle and the savings form that provides the best best the provides that form savings the and vehicle ing committee to assist in the election of Directors rep- Directors of election the in assist to committee ing
9 FROM CONTENDER TO MARKET LEADER MARKET TO CONTENDER FROM • ANNUAL REPORT 2006 • SKAGEN FUNDS SKAGEN • 2006 REPORT ANNUAL •
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is responsible for his/her own fund, and makes independent decisions. independent makes and fund, own his/her for responsible is
a team and a common belief in the investment philosophy. Each portfolio manager manager portfolio Each philosophy. investment the in belief common a and team a
may sound like a contradiction in terms, but it is all about a strong sense of being being of sense strong a about all is it but terms, in contradiction a like sound may
SKAGEN portfolio managers are characterised by a collective individualism. This This individualism. collective a by characterised are managers portfolio SKAGEN
and passionate and
Long-term Long-term
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>>
CONTINUED NEXT PAGE NEXT CONTINUED
that other investors either do not see or do not rate. not do or see not do either investors other that
go against the tide by researching and emphasising aspects aspects emphasising and researching by tide the against go
The SKAGEN portfolio managers are contrarians: They They contrarians: are managers portfolio SKAGEN The
risk for our clients. our for risk
are popular among investors because this means high high means this because investors among popular are
industries or geographic areas during times when these these when times during areas geographic or industries
not speculate by offering funds directed at individual individual at directed funds offering by speculate not
companies. We do not follow fashion trends. We will will We trends. fashion follow not do We companies.
us with the flexibility to select genuinely undervalued undervalued genuinely select to flexibility the with us
research and facts. Broad investment mandates provide provide mandates investment Broad facts. and research
SKAGEN investment decisions are based on objectivity, objectivity, on based are decisions investment SKAGEN
months for the typical fund manager. fund typical the for months
portfolios has been three to five years, compared to 9-12 9-12 to compared years, five to three been has portfolios
lifespan of the holdings in the SKAGEN equity fund fund equity SKAGEN the in holdings the of lifespan
investments than most other investors. The average average The investors. other most than investments
SKAGEN has a more long-term perspective of company company of perspective long-term more a has SKAGEN
Not a follower of fashion fashion of follower a Not
changed framework conditions. framework changed
mergers, demergers, changed ownership structure and and structure ownership changed demergers, mergers,
capital structure, acquisitions, change of management, management, of change acquisitions, structure, capital
(“triggers”) for revaluation. For example changes in in changes example For revaluation. for (“triggers”)
tion to the three Us, we want to see potential catalysts catalysts potential see to want we Us, three the to tion
when deciding whether it is a good investment. In addi- In investment. good a is it whether deciding when
underlying values of a company is an important element element important an is company a of values underlying
The probability of being able to realise the assumed assumed the realise to able being of probability The
tion to geographic and industry imbalances. industry and geographic to tion
future earnings from the company. We also pay atten- pay also We company. the from earnings future
a highly leveraged situation if there is high potential for for potential high is there if situation leveraged highly a
on individual companies – not markets and sectors. sectors. and markets not – companies individual on monitor the companies’ debt exposure and may accept accept may and exposure debt companies’ the monitor
pick a few companies from all over the world, and focus focus and world, the over all from companies few a pick all aspects of risk associated with their investments. We We investments. their with associated risk of aspects all
values of the company. The portfolio managers hand- managers portfolio The company. the of values shareholder value. The portfolio managers try to map map to try managers portfolio The value. shareholder
not reflect the inherent inherent the reflect not willingness to create create to willingness
to say the share price does does price share the say to nies should also show show also should nies three to five years five to three
inely undervalued - that is is that - undervalued inely model. The compa- The model.
many equities are genu- are equities many and proven business business proven and equity fund portfolios is is portfolios fund equity
SKAGEN believes that that believes SKAGEN have an understandable understandable an have
SKAGEN invests must must invests SKAGEN holdings in the SKAGEN SKAGEN the in holdings
thorough research thorough
The companies in which which in companies The Experience and and Experience
The average lifespan of the the of lifespan average The
companies. that is worth a dollar. a worth is that
egy and tactics to select select to tactics and egy 50 cents for something something for cents 50
created, and that is why we use thorough research, strat- research, thorough use we why is that and created, put: SKAGEN is looking for companies where we pay pay we where companies for looking is SKAGEN put:
companies that are important. This is where values are are values where is This important. are that companies invest in offer potential value at a low price. Simply Simply price. low a at value potential offer in invest
three Us. For the SKAGEN portfolio managers, it is the the is it managers, portfolio SKAGEN the For Us. three The fund managers require that the companies they they companies the that require managers fund The
researched, undervalued and unpopular – known as the the as known – unpopular and undervalued researched,
view to make investments in companies that are under- are that companies in investments make to view conditions.
manager uses his/her knowledge, experience and world world and experience knowledge, his/her uses manager the companies´ development, potential and framework framework and potential development, companies´ the
In practical terms, this means that each portfolio portfolio each that means this terms, practical In SKAGEN uses macro analyses simply to understand understand to simply analyses macro uses SKAGEN
11 PORTFOLIO MANAGERS PORTFOLIO • ANNUAL REPORT 2006 • SKAGEN FUNDS SKAGEN • 2006 REPORT ANNUAL •
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since the company was established in 1993. in established was company the since
SKAGEN investment philosophy has been unchanged unchanged been has philosophy investment SKAGEN
as each of them makes independent decisions. The The decisions. independent makes them of each as
investment philosophy and the team – at the same time time same the at – team the and philosophy investment
that all portfolio managers have a strong loyalty to the the to loyalty strong a have managers portfolio all that We have no plans to change our formula for success. for formula our change to plans no have We
It may sound like a contradiction in terms, but means means but terms, in contradiction a like sound may It
who put objectivity and cooperation in the forefront. forefront. the in cooperation and objectivity put who with the highest possible risk adjusted return. adjusted risk possible highest the with
Our portfolio managers are all collective individualists individualists collective all are managers portfolio Our achieves its overall objective – to provide our clients clients our provide to – objective overall its achieves
It is through discipline of method that SKAGEN SKAGEN that method of discipline through is It
about companies in different industries and countries. and industries different in companies about research provides the basis for long-term performance. performance. long-term for basis the provides research
one important task is therefore to draw on knowledge knowledge on draw to therefore is task important one that hard work in the form of proprietary thorough thorough proprietary of form the in work hard that
experience. The portfolio managers are generalists – and and – generalists are managers portfolio The experience. application of our investment philosophy, and we know know we and philosophy, investment our of application
made by professionals with many years of equity market market equity of years many with professionals by made fund managers is that we have long experience in the the in experience long have we that is managers fund
SKAGEN assumes an active stance, and investments are are investments and stance, active an assumes SKAGEN However, what separates SKAGEN from many other other many from SKAGEN separates what However,
based fund management has become more popular. popular. more become has management fund based Not like everyone else everyone like Not
ment philosophy. In the past few years, active value- active years, few past the In philosophy. ment
believe is due to the correct application of our invest- our of application correct the to due is believe values on behalf of our unit holders. unit our of behalf on values
SKAGEN produces world-class returns, which we we which returns, world-class produces SKAGEN lyse companies and pick shares, and how we manage manage we how and shares, pick and companies lyse
into how the portfolio managers sort information, ana- information, sort managers portfolio the how into The narrow path narrow The
management of our unit holders’ assets are integrated integrated are assets holders’ unit our of management
long-term performance rather than short-term profits. short-term than rather performance long-term spread. SKAGEN´s ethical norms and guidelines for the the for guidelines and norms ethical SKAGEN´s spread.
active role in the management company and focus on on focus and company management the in role active tain regions, a given weighting or a predefined industry industry predefined a or weighting given a regions, tain
Owners and founders of SKAGEN continue to play an an play to continue SKAGEN of founders and Owners to make investments which are, for example, tied to cer- to tied example, for are, which investments make to
and not bound to any index, the managers do not have have not do managers the index, any to bound not and
commonality of interest with its clients. its with interest of commonality feet. Since all SKAGEN funds are actively managed managed actively are funds SKAGEN all Since feet.
funds they manage. SKAGEN shares therefore a unique unique a therefore shares SKAGEN manage. they funds Each individual investment has to stand on its own two two own its on stand to has investment individual Each
personal assets invested in the the in invested assets personal Exploiting market distortions market Exploiting
and have a large part of their their of part large a have and
success
are also owners in the company company the in owners also are mistake in the future. the in mistake
Several of the portfolio managers managers portfolio the of Several sight to avoid making the same same the making avoid to sight
our formula for for formula our
SKAGEN is to use this hind- this use to is SKAGEN A common interest common A
manager. What is important for for important is What manager.
plans to change change to plans
in the future. the in that of each individual portfolio portfolio individual each of that
undervalued and unpopular also also unpopular and undervalued ence of the team is greater than than greater is team the of ence
We have no no have We panies that are under-researched, under-researched, are that panies collective memory and experi- and memory collective
continue to find individual com- individual find to continue it is a great strength that the the that strength great a is it
panies – enabling SKAGEN to to SKAGEN enabling – panies nal investments. In this respect respect this In investments. nal
receive input for new approach angles for analysing com- analysing for angles approach new for input receive and assumptions that formed the basis for the origi- the for basis the formed that assumptions and
Team diversity means that the portfolio managers managers portfolio the that means diversity Team back to the starting point to discuss the assessments assessments the discuss to point starting the to back
In order to learn from these, the portfolio managers go go managers portfolio the these, from learn to order In
important and no key people have been changed. been have people key no and important However, some times it is impossible to avoid mistakes. mistakes. avoid to impossible is it times some However,
independent decisions for their funds. Team stability is is stability Team funds. their for decisions independent
the same way. Fund managers are responsible for making making for responsible are managers Fund way. same the on mistakes when conditions change. conditions when mistakes on
platform, but that does not mean that all managers act act managers all that mean not does that but platform, ensures that the portfolio managers are able to pick up up pick to able are managers portfolio the that ensures
The portfolio department shares a common research research common a shares department portfolio The continuously check their own research. This method method This research. own their check continuously
companies throughout the whole investment period and and period investment whole the throughout companies
patience, drive, enthusiasm and thoroughness. and enthusiasm drive, patience, their of valuation the monitor managers portfolio The
philosophy – a long-term approach that requires requires that approach long-term a – philosophy
is a strong shared belief in the SKAGEN investment investment SKAGEN the in belief shared strong a is occur.
ground, education and skills. Common for all however however all for Common skills. and education ground, events unforeseen if or decision, bad a makes SKAGEN
team where everyone has different experience, back- experience, different has everyone where team if materialise, risks possible if negative be may outcomes
has been strengthened to become a more versatile versatile more a become to strengthened been has Investment investment. every with associated risk is There
During 2006, the portfolio management department department management portfolio the 2006, During Learning from mistakes from Learning
12 ANNUAL REPORT 2006 • SKAGEN FUNDS • FUNDS SKAGEN • 2006 REPORT ANNUAL PORTFOLIO MANAGERS PORTFOLIO
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Avkastning SKAGEN Høyrente until 31st Dec 2006 Dec 31st until Høyrente SKAGEN daily management of portfolios of management daily as of 1st Jan 2007 Jan 1st of as
Responsible for SKAGEN SKAGEN for Responsible Responsible for SKAGEN Tellus and and Tellus SKAGEN for Responsible Responsible for global research and and research global for Responsible and SKAGEN Høyrente Institusjon Institusjon Høyrente SKAGEN and
Torgeir Høien Torgeir Porter Ross Fredrik Astrup Fredrik Responsible for SKAGEN Høyrente Høyrente SKAGEN for Responsible
Portfolio manager manager Portfolio manager Portfolio Portfolio manager manager Portfolio Portfolio manager Ola Sjöstrand Ola manager Portfolio
daily management of portfolios of management daily daily management of portfolios of management daily Global SKAGEN for Responsible Responsible for SKAGEN Vekst SKAGEN for Responsible
Responsible for global research and and research global for Responsible Responsible for global research and and research global for Responsible
Beate Bredesen Beate Omid Gholamifar Omid Weintraub Filip Kristian Falnes Kristian
Portfolio manager manager Portfolio Portfolio manager manager Portfolio manager Portfolio Portfolio manager manager Portfolio
daily management of portfolios of management daily Kon-Tiki SKAGEN for Responsible
Responsible for global research and and research global for Responsible
Knut Harald Nilsson Harald Knut Stensrud Kristoffer
Portfolio manager manager Portfolio director Investment
AND VARIED EXPERIENCE VARIED AND
PORTFOLIO MANAGERS WITH LONG LONG WITH MANAGERS PORTFOLIO
13 PORTFOLIO MANAGERS PORTFOLIO • ANNUAL REPORT 2006 • SKAGEN FUNDS SKAGEN • 2006 REPORT ANNUAL •
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you make a wrong decision, or too brave when things things when brave too or decision, wrong a make you It’s actually thousands. Every day, I still walk into the the into walk still I day, Every thousands. actually It’s
you too conservative when markets are falling or after after or falling are markets when conservative too you
Emotions can affect you both ways – they either make make either they – ways both you affect can Emotions investment decisions. Do you still get a buzz? buzz? a get still you Do decisions. investment
You have to be mentally tough, or at least in control. control. in least at or tough, mentally be to have You By now, you have made and implemented hundreds of of hundreds implemented and made have you now, By
simpler than that…” than simpler when things go badly wrong? wrong? badly go things when
Einstein: “Make things as simple as possible, but never never but possible, as simple as things “Make Einstein: Is being mentally tough essential? How do you handle it it handle you do How essential? tough mentally being Is
dom or slowly, and so should one’s decisions. Quoting Quoting decisions. one’s should so and slowly, or dom
than seven things influencing an investment decision. decision. investment an influencing things seven than them sparingly, cautiously; things often change sel- change often things cautiously; sparingly, them
more than seven parameters” - there are usually more more usually are there - parameters” seven than more new perceptions are, you need the discipline to apply apply to discipline the need you are, perceptions new
pose investment is art in the sense that “art is science with with science is “art that sense the in art is investment pose world from a different perspective. But however exciting exciting however But perspective. different a from world
in using one’s own mental tool kit to the best effect. I sup- I effect. best the to kit tool mental own one’s using in Every day I want to learn something new, or see the the see or new, something learn to want I day Every
tive. But a successful investor needs to be “whole brained” brained” “whole be to needs investor successful a But tive.
I guess I am about 70 percent logical and 30 percent crea- percent 30 and logical percent 70 about am I guess I can always improve, always. always. improve, always can
what drives me – and the desire for improvement - one one - improvement for desire the and – me drives what
living, not an occupation. The intellectual challenge is is challenge intellectual The occupation. an not living, - is investment art or science? science? or art investment is -
as an investor, I AM an investor – for me it is a way of of way a is it me for – investor an AM I investor, an as lytical or creative / intuitive)? Which is more important important more is Which intuitive)? / creative or lytical
Even in bed I often dream about stocks! I don’t work work don’t I stocks! about dream often I bed in Even Are you left brained or right brained (i.e. logical / ana- / logical (i.e. brained right or brained left you Are
decision or a missed opportunity. opportunity. missed a or decision What gets you out of bed in the morning? morning? the in bed of out you gets What
an interesting investing proposition, annoyed at a bad bad a at annoyed proposition, investing interesting an
still get a buzz: I am excited every time I come across across come I time every excited am I buzz: a get still successful SKAGEN Global Fund. Fund. Global SKAGEN successful
could affect every stock in the portfolio. Of course I I course Of portfolio. the in stock every affect could manager in the U.S.), and responsible for the hugely hugely the for responsible and U.S.), the in manager
folio anew. Every day, new information arrives which which arrives information new day, Every anew. folio SKAGEN funds for six years (after working as a fund fund a as working (after years six for funds SKAGEN
office and mentally “buy” the SKAGEN Global port- Global SKAGEN the “buy” mentally and office Filip - You are 33, Swedish, American - educated, with with educated, - American Swedish, 33, are You - Filip
British investment specialist Peter A. Scott. Scott. A. Peter specialist investment British
Filip Weintraub, manager of SKAGEN Global, is interviewed by by interviewed is Global, SKAGEN of manager Weintraub, Filip
Fear and Greed and Fear
Defeating Defeating
The Art of Investment: Investment: of Art The
14 ANNUAL REPORT 2006 • SKAGEN FUNDS • FUNDS SKAGEN • 2006 REPORT ANNUAL PORTRAIT INTERVIEW WITH FILIP WEINTRAUB FILIP WITH INTERVIEW PORTRAIT
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15 PORTRAIT INTERVIEW WITH FILIP WEINTRAUB FILIP WITH INTERVIEW PORTRAIT • ANNUAL REPORT 2006 • SKAGEN FUNDS SKAGEN • 2006 REPORT ANNUAL •
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gasbord” of the global markets to very few ideas. There There ideas. few very to markets global the of gasbord” bend a little to see a problem from a wider perspective perspective wider a from problem a see to little a bend
I prefer to distil my investments, from the huge “smor- huge the from investments, my distil to prefer I The key is to be ruthlessly logical, but still to be able to to able be to still but logical, ruthlessly be to is key The
How do you control risk? risk? control you do How manager? manager?
try to remain open to a large universe of opportunities? opportunities? of universe large a to open remain to try and characteristics are essential in a good investment investment good a in essential are characteristics and
follow a small number of stocks really closely, or do you you do or closely, really stocks of number small a follow Apart from experience and education, what skills skills what education, and experience from Apart
trated is your investment effort? I.e. do you personally personally you do I.e. effort? investment your is trated
ment – but I still sell it. sell still I but – ment How concentrated is your portfolio, and how concen- how and portfolio, your is concentrated How
I can be sentimental saying farewell to a great invest- great a to farewell saying sentimental be can I
That is how you get the best results, in my view. my in results, best the get you how is That must always question your own biases and conclusions. conclusions. and biases own your question always must
have at least a five year time horizon, probably longer. longer. probably horizon, time year five a least at have most subjective part of the analysis is yourself – you you – yourself is analysis the of part subjective most
Any one investing in equities (and equity funds) should should funds) equity (and equities in investing one Any the conclusions by researching the key variables. The The variables. key the researching by conclusions the
Objectivity (I call it the double-O’s). Always question question Always double-O’s). the it call (I Objectivity
The key in this business is constant Observation, and and Observation, constant is business this in key The to be judged? judged? be to
I can fall in love with stocks – but never marry them! them! marry never but – stocks with love in fall can I SKAGEN Global - i.e. over what period are you happy happy you are period what over i.e. - Global SKAGEN
What sort of time horizon is appropriate for investors in in investors for appropriate is horizon time of sort What
company because they have become overpriced? overpriced? become have they because company
thing really interesting, it can also be very rewarding. rewarding. very be also can it interesting, really thing e.g., do you regret having to sell the shares of a great great a of shares the sell to having regret you do e.g.,
life tough for yourself, but when you discover some- discover you when but yourself, for tough life Do you play favourites? Do you fall in love with stocks? stocks? with love in fall you Do favourites? play you Do
is true! With that assumption, you really make research research make really you assumption, that With true! is
sis to try to find if it it if find to try to sis priate context. priate
great first hypothe- first great put into the appro- the into put
tunity, but it is a a is it but tunity, world values and and values world
to make an oppor- an make to translated into real real into translated – but never marry them! marry never but –
not wrong enough enough wrong not numbers need to be be to need numbers
always wrong, or or wrong, always static analysis: the the analysis: static I can fall in love with stocks stocks with love in fall can I
is not necessarily necessarily not is bers. This is not a a not is This bers.
ian. The crowd crowd The ian. believe the num- the believe
I too am a contrar- a am too I understand and and understand
tions, but you must must you but tions,
cating humour! cating favourable situa- favourable
also both have an appreciation of sailing and self-depre- and sailing of appreciation an have both also I speak. People are crucial, of course, especially in less less in especially course, of crucial, are People speak. I
other in this business and why we are close friends. We We friends. close are we why and business this in other The language of investing is numbers and that is what what is that and numbers is investing of language The
yet we are scarily similar. This is how we found each each found we how is This similar. scarily are we yet
Kristoffer and I are from very different backgrounds; backgrounds; different very from are I and Kristoffer you judging people or numbers? or people judging you
When you look at the fundamentals of a company, are are company, a of fundamentals the at look you When
Is the crowd always wrong? wrong? always crowd the Is
risks into the portfolio. the into risks investment philosophy. He is an aggressive contrarian. contrarian. aggressive an is He philosophy. investment
Otherwise, it is too easy to introduce unintended macro macro unintended introduce to easy too is it Otherwise, Kristoffer Stensrud is the main driver of SKAGEN’s SKAGEN’s of driver main the is Stensrud Kristoffer
of only buying the most attractive ones in each sector. sector. each in ones attractive most the buying only of
the right way to invest, at all times. all at invest, to way right the across industries – this also helps to drive the discipline discipline the drive to helps also this – industries across
- about yourself, about the investment process and about about and process investment the about yourself, about - I minimize overall risk by having a portfolio diversified diversified portfolio a having by risk overall minimize I
reality will bite you. You need very strong convictions convictions strong very need You you. bite will reality tive opportunity, I tend to buy quite a lot of it. However, However, it. of lot a quite buy to tend I opportunity, tive
expensive fault in this business: try to deny reality and and reality deny to try business: this in fault expensive on the individual company. When I do find an attrac- an find do I When company. individual the on
and fear – and other traits such as pride, which is a very very a is which pride, as such traits other and – fear and in the markets at any point in time and I invest based based invest I and time in point any at markets the in
are going perfectly. It is essential to control both greed greed both control to essential is It perfectly. going are are not many great (i.e. seriously mispriced) investments investments mispriced) seriously (i.e. great many not are
16 ANNUAL REPORT 2006 • SKAGEN FUNDS • FUNDS SKAGEN • 2006 REPORT ANNUAL PORTRAIT INTERVIEW WITH FILIP WEINTRAUB FILIP WITH INTERVIEW PORTRAIT
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Filip Weintraub, manager of SKAGEN Global SKAGEN of manager Weintraub, Filip
ager, and I have no plans to find out. out. find to plans no have I and ager,
I have no clue what I would do if I wasn’t a fund man- fund a wasn’t I if do would I what clue no have I
cessful fund manager? manager? fund cessful
Finally, what would you be doing if you weren’t a suc- a weren’t you if doing be you would what Finally,
poorly.
do well, and never quite as a stupid when things go go things when stupid a as quite never and well, do
you are never quite as good as it appears when you you when appears it as good as quite never are you
down to discipline. You must always remember that that remember always must You discipline. to down
attention can be a bad influence but again it comes comes it again but influence bad a be can attention
I beg to differ, sir. We are super-nerds! Sometimes the the Sometimes super-nerds! are We sir. differ, to beg I
ego and all the attendant risks? risks? attendant the all and ego
bad influence? How do you guard against an inflated inflated an against guard you do How influence? bad
fun to be recognized, but is this rock ‘n’ roll profiling a a profiling roll ‘n’ rock this is but recognized, be to fun
dull introverts. Now top fund managers are stars. It’s It’s stars. are managers fund top Now introverts. dull
Twenty years ago, investment managers were seen as as seen were managers investment ago, years Twenty
how the world works. world the how
their spreadsheets and models and know nothing of of nothing know and models and spreadsheets their
Many people in the investment industry live through through live industry investment the in people Many
bring an amazing tool set and understanding of life. life. of understanding and set tool amazing an bring
psychology, science and especially history. This will will This history. especially and science psychology,
A broad interest is important – arts, philosophy, math, math, philosophy, arts, – important is interest broad A
key drivers over time in the most successful investors. investors. successful most the in time over drivers key
works – the thirst for knowledge and curiosity are the the are curiosity and knowledge for thirst the – works
intellectual interest in how business and the world world the and business how in interest intellectual
– to be creative. I also believe one has to have a true true a have to has one believe also I creative. be to –
17 PORTRAIT INTERVIEW WITH FILIP WEINTRAUB FILIP WITH INTERVIEW PORTRAIT • ANNUAL REPORT 2006 • SKAGEN FUNDS SKAGEN • 2006 REPORT ANNUAL •
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Instead of criss-crossing thru markets, industries and and industries markets, thru criss-crossing of Instead in 1994, all of our funds have had global mandates. mandates. global had have funds our of all 1994, in
We will try to be more forward-looking than usual. usual. than forward-looking more be to try will We followed by fixed income fund SKAGEN Avkastning Avkastning SKAGEN fund income fixed by followed
Since our first equity fund, SKAGEN Vekst in 1993, 1993, in Vekst SKAGEN fund, equity first our Since
usual portfolio chat. chat. portfolio usual
know more about us and our thinking, beyond the the beyond thinking, our and us about more know the best ticker-tape machines money can buy. can money machines ticker-tape best the
we’re nerdily excited about our work and want you to to you want and work our about excited nerdily we’re tims). We’ve had telephones since the early 1990s, plus plus 1990s, early the since telephones had We’ve tims).
reports cure insomnia really quickly. But at SKAGEN SKAGEN at But quickly. really insomnia cure reports ducted a little too robustly at times, according to the vic- the to according times, at robustly too little a ducted
Investment managers don’t win literature prizes and our our and prizes literature win don’t managers Investment voyaged far and wide to establish foreign relations (con- relations foreign establish to wide and far voyaged
always had an international perspective. Our ancestors ancestors Our perspective. international an had always
ing lower consumption of Cristal champagne. But we’ve we’ve But champagne. Cristal of consumption lower ing
few of the attributes of a global financial centre, includ- centre, financial global a of attributes the of few
falling markets. falling
ing village. Stavanger certainly has less of the noise and and noise the of less has certainly Stavanger village. ing
Some competitors describe us as hicks in a remote fish- remote a in hicks as us describe competitors Some
good markets and absolute returns in in returns absolute and markets good
provides a mix of lower risks and/or higher returns. returns. higher and/or risks lower of mix a provides
Investors want relative performance in in performance relative want Investors
lunches’, but one is spreading your bets globally, which which globally, bets your spreading is one but lunches’,
this is emotion trumping logic. There are not many ‘free ‘free many not are There logic. trumping emotion is this
nual return over longer periods of time. time. of periods longer over return nual
investing outside their home market. Some still do. But But do. still Some market. home their outside investing
Until recently, most investors thought this way about about way this thought investors most recently, Until
well above our goal of 20 percent an- percent 20 of goal our above well
people I know”, said the driver. the said know”, I people
their respective reference indices, and and indices, reference respective their
middle of its civil war! Why? “I’d rather be killed by by killed be rather “I’d Why? war! civil its of middle
until 1985. 1985! He had come back to Lebanon in the the in Lebanon to back come had He 1985! 1985. until
equity funds performed better than than better performed funds equity
accent. Had the cabbie lived in the US? Yes, in Detroit, Detroit, in Yes, US? the in lived cabbie the Had accent.
In a taxi in Beirut, a colleague detected an American American an detected colleague a Beirut, in taxi a In
difficult to replicate. Nevertheless, all all Nevertheless, replicate. to difficult
Voyages from a fishing village fishing a from Voyages
percent performance from 2005 was was 2005 from performance percent
read in 12 months’ time for added entertainment value. value. entertainment added for time months’ 12 in read
companies, long-term inflation, and the capex cycle. Re- cycle. capex the and inflation, long-term companies,
holders of SKAGEN, although the 39-59 39-59 the although SKAGEN, of holders
of this world. The themes are globalisation, big family family big globalisation, are themes The world. this of
are looking at a few major topics of the current affairs affairs current the of topics major few a at looking are
2006 was a good year for the stake- the for year good a was 2006 companies we will explain how our portfolio managers managers portfolio our how explain will we companies
- globalisation, big family companies, long-term inflation, the capex cycle. cycle. capex the inflation, long-term companies, family big globalisation, -
team is positive regarding 2007, and four themes in particular seem to be relevant relevant be to seem particular in themes four and 2007, regarding positive is team
SKAGEN’s equity and fixed income funds did really well in 2006. The portfolio portfolio The 2006. in well really did funds income fixed and equity SKAGEN’s – the year ahead year the –
2007 2007
18 ANNUAL REPORT 2006 • SKAGEN FUNDS • FUNDS SKAGEN • 2006 REPORT ANNUAL PORTFOLIO MANAGERS’ REPORT MANAGERS’ PORTFOLIO
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sulting from globalisation has lead to reduced price growth. price reduced to lead has globalisation from sulting nies, and not regions, in order to achieve excess returns. excess achieve to order in regions, not and nies,
had strong growth and falling inflation. Productivity growth re- growth Productivity inflation. falling and growth strong had makes it even more important to focus on undervalued compa- undervalued on focus to important more even it makes
As opposed to previous periods of expansion, this time we have have we time this expansion, of periods previous to opposed As Earnings multiples between regions have converged, which which converged, have regions between multiples Earnings
Source: UBS, MSCI UBS, Source: * Includes estimates, IMF data / Excluding food and energy / © BCA Research 2006 2006 Research BCA © / energy and food Excluding / data IMF estimates, Includes *
49 820 20 06 05 04 03 02 01 2000 99 98 97 96 95 94 93 92 91 90 89 88 67 08 48 89 29 69 00 98 96 94 92 90 88 86 84 82 80 78 76 20 608 06 04 02
0%
(LS) (5-year moving average) moving (5-year
2 Real per capita GDP* GDP* capita per Real 1.0 2%
Japan
USA
4
4% 1.5
on inflation on
Europe ex. UK ex. Europe
.... keeps a lid a keeps .... 6
6% 2.0
8
8%
2.5
productivity....
10
GEM
Surge in Surge
10% 3.0
12
Core** consumer prices (RS) prices consumer Core**
12%
3.5
14
Chg Chg
14%
Ann Ann%
Earnings yield by market by yield Earnings
Global supply-driven boom supply-driven Global
STRONGLY DURING THE PAST FIVE YEARS YEARS FIVE PAST THE DURING STRONGLY MEANS LOW INFLATION LOW MEANS
VALUATION OF EQUITIES BY GEOGRAPHY HAS CONVERGED CONVERGED HAS GEOGRAPHY BY EQUITIES OF VALUATION GLOBAL GROWTH WITHOUT COMPARE; RISING PRODUCTIVITY PRODUCTIVITY RISING COMPARE; WITHOUT GROWTH GLOBAL
different valuations of similar companies in different different in companies similar of valuations different
These ‘special situations’, in investment jargon, include include jargon, investment in situations’, ‘special These basement. They were too noisy and distracting. and noisy too were They basement.
now employ immigrants from Oslo to mend the nets. nets. the mend to Oslo from immigrants employ now By the way, the ticker-tape machines are now in the the in now are machines ticker-tape the way, the By
globally there remain enough to keep us very busy; we we busy; very us keep to enough remain there globally
to the discovery of mispricing and anomalies, of which which of anomalies, and mispricing of discovery the to for unit holders. unit for
What we do, in fact, is apply fishing village brainpower brainpower village fishing apply is fact, in do, we What continues therefore to guide us to exceptional returns returns exceptional to us guide to therefore continues
mantra, Unpopular/Under-researched/Undervalued, Unpopular/Under-researched/Undervalued, mantra,
mispricing and convergence in global bond markets. bond global in convergence and mispricing Globalisation is the driver behind convergence. Our Our convergence. behind driver the is Globalisation
SKAGEN Tellus opened in September 2006 to capture capture to 2006 September in opened Tellus SKAGEN
in 2002, to focus mainly on (global) emerging markets. markets. emerging (global) on mainly focus to 2002, in on page 24. 24. page on
play Euroland convergence, and SKAGEN Kon-Tiki Kon-Tiki SKAGEN and convergence, Euroland play ship – see our Family Owned Conglomerates theme theme Conglomerates Owned Family our see – ship
We established SKAGEN Global in 1997, originally to to originally 1997, in Global SKAGEN established We countries and anomalous valuations by size or owner- or size by valuations anomalous and countries
19 PORTFOLIO MANAGERS’ REPORT MANAGERS’ PORTFOLIO • ANNUAL REPORT 2006 • SKAGEN FUNDS SKAGEN • 2006 REPORT ANNUAL •
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Back to unsackable idlers and “Made in Norway” labels? labels? Norway” in “Made and idlers unsackable to Back
Globalisation: last year’s story. Failure of world trade talks. talks. trade world of Failure story. year’s last Globalisation:
nothing yet. nothing
you ain’t seen ain’t you
Globalisation: Globalisation:
20 ANNUAL REPORT 2006 • SKAGEN FUNDS • FUNDS SKAGEN • 2006 REPORT ANNUAL PORTFOLIO MANAGERS’ REPORT MANAGERS’ PORTFOLIO
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instant market leadership and super profitability just just profitability super and leadership market instant
risk premiums. risk keting lessons acquired in other countries, achieving achieving countries, other in acquired lessons keting
lower risk, which should indicate higher valuations through lower lower through valuations higher indicate should which risk, lower
Indian telecom company Bharti Airtel applied mar- applied Airtel Bharti company telecom Indian
and fixed income markets. Lower volatility is synonymous with with synonymous is volatility Lower markets. income fixed and
on the financial markets through lower volatility in both equity equity both in volatility lower through markets financial the on
tion has resulted in greater economic stability. This has rubbed off off rubbed has This stability. economic greater in resulted has tion operator in the IT supply chain. supply IT the in operator
A strong drop in the rate of change in economic growth and infla- and growth economic in change of rate the in drop strong A
world-class brand name, and becoming the lowest-cost lowest-cost the becoming and name, brand world-class
near-obscurity to being a major global company, with a a with company, global major a being to near-obscurity
© BCA Research 2006 Research BCA © ** Source: Merill Lynch / Note: Both series shown smoothed shown series Both Note: / Lynch Merill Source: ** data OECD Note:
* Source: Chicago board of options exchange options of board Chicago Source: * * Includes estimates Includes *
manufacturer Samsung Electronics, it has gone from from gone has it Electronics, Samsung manufacturer
07 08 09 00 0002 2000 05 00 95 90 85 80 75 70 406 04
10
During the time we have owned Korean electronics electronics Korean owned have we time the During
Consumer prices (RS) prices Consumer
60
volatility index** (RS) index** volatility
1,0%
15 0,9%
Treasury implied Treasury 70
resisted – and will do even better in 2007. in better even do will and – resisted
1,5% 80
20 1,0%
backed successfully on the globalisation which they they which globalisation the on successfully backed 90
2,0%
25
1,2% 100 Even fearful, job-hoarding Europeans have piggy- have Europeans job-hoarding fearful, Even
2,5%
30 110
1,4%
120
3,0%
35 inflation theme). theme). inflation
Real GDP growth* (LS) growth* GDP Real
130
volatility index* (LS) index* volatility
1,6%
supply side defeated the inflationary impetus (see our our (see impetus inflationary the defeated side supply 3,5%
40
OEX option OEX
140 deviation of global of deviation
US standard moving 10-year Bottlenecks arose in the commodity markets, but the the but markets, commodity the in arose Bottlenecks
... Declining financial market volatility market financial Declining ... stability... economic Increasing productivity growth higher in the developed world. world. developed the in higher growth productivity
prices down, suppressed wage inflation and forced forced and inflation wage suppressed down, prices
WHICH SHOULD NOT INDICATE HIGHER RISK PREMIUMS RISK HIGHER INDICATE NOT SHOULD WHICH
ble. Increased supply from the emerging giants pushed pushed giants emerging the from supply Increased ble. INCREASING ECONOMIC STABILITY RESULTS IN LOWER VOLATILITY, VOLATILITY, LOWER IN RESULTS STABILITY ECONOMIC INCREASING
faster global growth, inflation has been low and sta- and low been has inflation growth, global faster
Except to the idlers, absolutely not. Together with with Together not. absolutely idlers, the to Except
warnings of strong declines in share prices. share in declines strong of warnings
world more dangerous? dangerous? more world bubbles. Such bubbles, such as hi-tech in 2000, have often been been often have 2000, in hi-tech as such bubbles, Such bubbles.
With a good sector balance, there are still few signs of speculative speculative of signs few still are there balance, sector good a With Has this bubbling cauldron of change made the the made change of cauldron bubbling this Has
experienced to date. to experienced earch Res Bernstein Source: basis. three-month trailing a on smoothed data capitalization; By *
57 98 38 78 19 59 90 305 03 01 99 97 95 93 91 89 87 85 83 81 79 77 75
0% release even greater globalisation benefits than those those than benefits globalisation greater even release
Technology
10%
Telecom
jobs-for-life. This erosion of fat cat vested interests will will interests vested cat fat of erosion This jobs-for-life.
20%
“the professions”, excessive intellectual property rights, rights, property intellectual excessive professions”, “the 30%
40% Cyclicals
into the last bastions of protectionism - agriculture, agriculture, - protectionism of bastions last the into Growth
50% Traditional
eralisation measures, competitive pressures will leak leak will pressures competitive measures, eralisation
60%
Financials
70% is out of the bottle: with or without formal trade lib- trade formal without or with bottle: the of out is
Energy 80%
benefits from previous trade openings. But the genie genie the But openings. trade previous from benefits
90%
Others
ter enforcement of laws favouring competition drove drove competition favouring laws of enforcement ter 100%
All equity markets: Sectoral composition of mega-cap universe* mega-cap of composition Sectoral markets: equity All
The weakening of monolithic monopolies and bet- and monopolies monolithic of weakening The
SPECULATION
boom/bust) rules, bringing huge benefits in its wake. its in benefits huge bringing rules, boom/bust) GOOD SECTOR BALANCE INDICATES CONTINUED LOW DEGREE OF OF DEGREE LOW CONTINUED INDICATES BALANCE SECTOR GOOD
Schumpeterian creative destruction (qua the dotcom dotcom the (qua destruction creative Schumpeterian
the norm and adaptability the vital survival skill. skill. survival vital the adaptability and norm the revolucion!
In business, continuous re-orientation has become become has re-orientation continuous business, In to identifying winners (we hope!) in another. another. in hope!) (we winners identifying to Viva la la Viva
ity to apply knowledge learnt in one market or industry industry or market one in learnt knowledge apply to ity
huge. huge. environment. One big advantage: we now have the abil- the have now we advantage: big One environment.
– but watch this space: trade in services is going to be be to going is services in trade space: this watch but – really, understand their dynamics and those of their their of those and dynamics their understand really,
the largest bit of the global economy, are hardly traded traded hardly are economy, global the of bit largest the need to research companies even better - and really, really, and - better even companies research to need
trial migration within the developing world. Services, Services, world. developing the within migration trial Globalisation is mostly good. We like it, although we we although it, like We good. mostly is Globalisation
much more to come, plus accelerating trade and indus- and trade accelerating plus come, to more much
Migration of manufacturing to the east (and the south): south): the (and east the to manufacturing of Migration which has underinvested for 20 years. 20 for underinvested has which
organisation and brand new equipment in a sector sector a in equipment new brand and organisation
shoes, coffee, shrimps and software, but just wait). just but software, and shrimps coffee, shoes, leader of the deepwater rig market, combining good good combining market, rig deepwater the of leader
Vietnam produces the cheapest of everything (so far, far, (so everything of cheapest the produces Vietnam market psychology. Tomorrow it could be the global global the be could it Tomorrow psychology. market
the cheapest car in Europe. New WTO member member WTO New Europe. in car cheapest the how to straddle hypercyclical markets and financial financial and markets hypercyclical straddle to how
Where from? No-one cares. Romania already makes makes already Romania cares. No-one from? Where three old jackup oil rigs plus a deep understanding of of understanding deep a plus rigs oil jackup old three
ing (and receiving) better, cheaper, goods and services. services. and goods cheaper, better, receiving) (and ing Rig company Seadrill started on May 16th 2005 with with 2005 16th May on started Seadrill company Rig
revolution, the consumer is king of the world, demand- world, the of king is consumer the revolution,
century. Armed with the weaponry of the information information the of weaponry the with Armed century. Indian telecoms market. telecoms Indian
No chance. Globalisation remains the story of the the of story the remains Globalisation chance. No three years after liberalisation of the vast, slumbering slumbering vast, the of liberalisation after years three
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the short rate towards four percent. four towards rate short the
hike of indirect taxes will probably result in a rise in in rise a in result probably will taxes indirect of hike indicator of real economic activity. Here measured by the PMI Index. PMI the by measured Here activity. economic real of indicator
With low inflation, the growth of the money supply has become an an become has supply money the of growth the inflation, low With Currently, Eurozone inflation is 1.9 percent, but a a but percent, 1.9 is inflation Eurozone Currently,
Source: EcoWin Source:
9920 0120 0320 052006 2005 2004 2003 2002 2001 2000 1999
of a strong increase in inf lation. lation. inf in increase strong a of
42,5 2
PMI manufacturing (l.s.) manufacturing PMI robust growth of the real economy. This is not a sign sign a not is This economy. real the of growth robust
45,0 3
of the money supply in the Euro zone reflects the the reflects zone Euro the in supply money the of
47,5 4
inflation expectations. For example, the high growth growth high the example, For expectations. inflation
50,0 5
adjusted to the demand for money in light of the the of light in money for demand the to adjusted
52,5 6
graph), not inflation. The money supply is passively passively is supply money The inflation. not graph),
55,0 7
supply growth predicts real economic activity (see (see activity economic real predicts growth supply
57,5 8
of high inflation. With inflation targeting, money money targeting, inflation With inflation. high of
60,0 9
Money supply growth rate (r.s.) rate growth supply Money
High growth in the money supply used to be a cause cause a be to used supply money the in growth High
PMI services (l.s.) services PMI
62,5 10
ifso ne % Index Diffusion But what about the growth of the money supply? supply? money the of growth the about what But
MONEY SUPPLY AND THE REAL ECONOMY REAL THE AND SUPPLY MONEY
different national markets. national different
inflation, and whether bonds are correctly priced in in priced correctly are bonds whether and inflation,
ship between savings and investments – not about about not – investments and savings between ship
past ten years have been characterised by low and stable inflation. stable and low by characterised been have years ten past
the strategy of a bond manager is about the relation- the about is manager bond a of strategy the Inflation was high and very volatile during the 70s and 80s. The The 80s. and 70s the during volatile very and high was Inflation
the ups and downs of short-term interest rates. Now, Now, rates. interest short-term of downs and ups the Source: EcoWin Source:
9017 9018 9019 2000 1995 1990 1985 1980 1975 1970 2005 result: long bond investors no longer care much about about much care longer no investors bond long result:
-5 -5
they ought to be to keep inflation in check. The The check. in inflation keep to be to ought they
central banks will set the short interest rates where where rates interest short the set will banks central 0 0
the long interest rates, and the confidence that the the that confidence the and rates, interest long the
5 5
tion expectations, the inflation premium inherent in in inherent premium inflation the expectations, tion
Germany
10 10
inflation has been strongly reduced due to lower infla- lower to due reduced strongly been has inflation
U.S.
bond investors. The inflation premium for unexpected unexpected for premium inflation The investors. bond 15 15
Norway
power of globalisation. This has been profitable for for profitable been has This globalisation. of power
20 20
The job has been made easier by the disinflation disinflation the by easier made been has job The
Japan
25 25
to rein in any indications of increasing inflation rates. rates. inflation increasing of indications any in rein to
%%
banks will increase the short rates aggressively enough enough aggressively rates short the increase will banks
ble, and the markets have confidence that the central central the that confidence have markets the and ble,
LOW AND STABLE INFLATION STABLE AND LOW
Inflation targeting worked. Inflation is low and sta- and low is Inflation worked. targeting Inflation
two percent. two year-end.
to inflation targets, with a norm that is now around around now is that norm a with targets, inflation to gradually from 0.25 percent to up to one percent by by percent one to up to percent 0.25 from gradually
began managing monetary policy directly according according directly policy monetary managing began Bank of Japan will probably increase its policy rate rate policy its increase probably will Japan of Bank
responsibility for inflation and in the early 90s they they 90s early the in and inflation for responsibility inflation after a long period of falling prices, and the the and prices, falling of period long a after inflation
1970s? But in the 80s, the central banks assumed assumed banks central the 80s, the in But 1970s? adopted inflation targeting, has recently seen positive positive seen recently has targeting, inflation adopted
Price stability used to be elusive – remember the the remember – elusive be to used stability Price of England inflation target. Japan, which has not not has which Japan, target. inflation England of
end of the year. UK inflation is a little above the Bank Bank the above little a is inflation UK year. the of end
market anticipates a reduction to 4.75 percent at the the at percent 4.75 to reduction a anticipates market
rate of 5.25 percent may very well be the peak. The The peak. the be well very may percent 5.25 of rate What makes us so certain? certain? so us makes What
percent, is already showing signs of waning, so a Fed Fed a so waning, of signs showing already is percent,
US core inflation, having tilted upwards to about 2.5 2.5 about to upwards tilted having inflation, core US Low, stable inflation will continue in 2007. 2007. in continue will inflation stable Low,
as expected as
Infl ation: ation:
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from private equity players for one (or more) of these. these. of more) (or one for players equity private from has started, with replacement of family management management family of replacement with started, has
near future. Strong cash flows may then attract bids bids attract then may flows cash Strong future. near discount becomes 55 percent. The unlocking of value value of unlocking The percent. 55 becomes discount
the group into three separately listed companies in the the in companies listed separately three into group the stake in LG Electronics (which we also own) and the the and own) also we (which Electronics LG in stake
board plans to enhance shareholder value by splitting splitting by value shareholder enhance to plans board discount even to these. Apply fair values, including its its including values, fair Apply these. to even discount
International, in which we recently invested. Tyco’s Tyco’s invested. recently we which in International, ued, but the holding company trades at a 45 percent percent 45 a at trades company holding the but ued,
intrinsic values. A good example is American Tyco Tyco American is example good A values. intrinsic Korean LG Corp. It’s main listed assets are underval- are assets listed main It’s Corp. LG Korean
lar), they need catalysts to close the discounts to to discounts the close to catalysts need they lar), Want $1 for 30 cents? We recently bought into South South into bought recently We cents? 30 for $1 Want
losophy (under-researched, undervalued and unpopu- and undervalued (under-researched, losophy
Although conglomerates often fit SKAGEN’s ‘3U’ phi- ‘3U’ SKAGEN’s fit often conglomerates Although long run, few FOC’s will be safe from their firepower. their from safe be will FOC’s few run, long
young investment bankers and private equiteers; in the the in equiteers; private and bankers investment young
So is unlocking undervaluation, a major driver for abrasive abrasive for driver major a undervaluation, unlocking is So than 50 cents. We own seven percent of the company. the of percent seven own We cents. 50 than
cent of Alternatifbank; in total, a dollar of assets for less less for assets of dollar a total, in Alternatifbank; of cent
which are, of course, SKAGEN themes. SKAGEN course, of are, which in Yazicilar some partly listed auto operations plus 59 per- 59 plus operations auto listed partly some Yazicilar in
creation and make more contrarian purchases – both of of both – purchases contrarian more make and creation market capitalisation. For less than nothing, you also get get also you nothing, than less For capitalisation. market
One reason: families often focus on long-term value value long-term on focus often families reason: One is, extraordinarily, worth 20 percent more than its own own its than more percent 20 worth extraordinarily, is,
percent for those with widely spread shareholdings. shareholdings. spread widely with those for percent listed FOC, owns 36 percent of Anadolu Efes; the stake stake the Efes; Anadolu of percent 36 owns FOC, listed
companies returned 19.9 percent per annum versus 13.6 13.6 versus annum per percent 19.9 returned companies and value appreciation potential. Yazicilar Holding, a a Holding, Yazicilar potential. appreciation value and
16 years. It showed that the shares of family-controlled family-controlled of shares the that showed It years. 16 thirsty Russia and Eastern Europe. It has strong growth growth strong has It Europe. Eastern and Russia thirsty
We commissioned a study of 70 German companies over over companies German 70 of study a commissioned We We are big fans of Anadolu Efes, which brews beer in in beer brews which Efes, Anadolu of fans big are We
three. pending triggers. triggers. pending
Under-researched, Undervalued. Many FOC’s are all all are FOC’s Many Undervalued. Under-researched, tion of values in subsidiaries via M&A and IPO’s are are IPO’s and M&A via subsidiaries in values of tion
No! We love them. Remember our mantra: Unpopular, Unpopular, mantra: our Remember them. love We No! and increased dividends. Share buy-backs and realisa- and buy-backs Share dividends. increased and
control and/or limited liquidity. Family owned conglomerates (FOC’s). Don’t you hate them? hate you Don’t (FOC’s). conglomerates owned Family liquidity. limited and/or control
ing nepotism, low accountability, potential abuse of minorities, excessive major shareholder shareholder major excessive minorities, of abuse potential accountability, low nepotism, ing
also reflect lack of transparency and perceived weakness in corporate governance, includ- governance, corporate in weakness perceived and transparency of lack reflect also
deficits are typical; family secrets are not for outsiders. Discounts to underlying valuations valuations underlying to Discounts outsiders. for not are secrets family typical; are deficits
no neat sector boxes. They can be complex, opaque and difficult to analyse. Information Information analyse. to difficult and opaque complex, be can They boxes. sector neat no
Unsexy, dull, slow-moving, clumsy, old-fashioned. Stockbrokers ignore them - they fit into into fit they - them ignore Stockbrokers old-fashioned. clumsy, slow-moving, dull, Unsexy,
treasure in the attic the in treasure
Conglomerates: Conglomerates:
Family Owned Owned Family
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governance, we believe this discount will be reduced. be will discount this believe we governance,
thrown into the bargain. the into thrown (blue line, values on right axis). With positive changes in corporate corporate in changes positive With axis). right on values line, (blue
of the activities, which represent 45 percent of total values, are just just are values, total of percent 45 represent which activities, the of justed equity has varied from 34-61percent and is now at 45 percent percent 45 at now is and 34-61percent from varied has equity justed
with its interests in electronics and chemicals/health care. The rest rest The care. chemicals/health and electronics in interests its with (green bars, values on left axis). The discount relative to value-ad- to relative discount The axis). left on values bars, (green
When you invest in LG Corp, you only pay for the values associated associated values the for pay only you Corp, LG in invest you When Value-adjusted equity per share has risen by 26 percent in two years years two in percent 26 by risen has share per equity Value-adjusted
Chemicals & Health Care Telecom, IT & Services Royalty & Other & Royalty Services & IT Telecom, Care Health & Chemicals Electronics Discount to NAV (%) (rhs) (%) NAV to Discount (lhs) share per NAV
10-52-60 71-51-60 02-06-06 10-06-06 17-12-05 25-06-05 01-01-05 0
20 000 20 30
16 200 16
10 000 10
23 233 23
25 000 25 35
28 400 28
30 000 30 20 000 20
40 11 575 11
35 000 35
30 000 30 13 056 13 45
Share price Share
40 000 40 15 954 15
50
40 000 40
45 000 45
19 468 19
55
8 643 8
50 000 50 50 000 50
Net Asset Value Asset Net 60
55 000 55
8 643 8 60 000 60
65 60 000 60
Fair Value Fair
70 000 70
NAV (%) NAV share
Discount to Discount Won/
won/share
SINCE STOCK MARKET LISTING IN 2005 IN LISTING MARKET STOCK SINCE
GREAT DISCOUNT ON UNDERLYING VALUES IN LG CORP LG IN VALUES UNDERLYING ON DISCOUNT GREAT VALUE-ADJUSTED EQUITY PER SHARE AND DISCOUNT FOR LG CORP CORP LG FOR DISCOUNT AND SHARE PER EQUITY VALUE-ADJUSTED
25 PORTFOLIO MANAGERS’ REPORT MANAGERS’ PORTFOLIO • ANNUAL REPORT 2006 • SKAGEN FUNDS SKAGEN • 2006 REPORT ANNUAL •
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goods cycle. cycle. goods but was driven by hedge funds more than end users. users. end than more funds hedge by driven was but
We now expect a sustained strong upturn in the capital capital the in upturn strong sustained a expect now We 2006 commodities bubble was a flashing amber light, light, amber flashing a was bubble commodities 2006
heat the world? The The world? the heat
global imbalances. global Will surging capex over- capex surging Will
cycle. cycle.
also generating worrying worrying generating also
the surplus liquidity but but liquidity surplus the could be spectacular. be could
in the capital goods goods capital the in
charge, using some of of some using charge, cing back. The bounce bounce The back. cing
consumer often led the the led often consumer suppressed and is boun- is and suppressed
sustained strong upturn upturn strong sustained
red. In the past, the US US the past, the In red. capital spending has been been has spending capital
tions are being shatte- being are tions hip of cash flow. So So flow. cash of hip
We now expect a a expect now We rate earnings expecta- earnings rate prevailing ethos is wors- is ethos prevailing
at a time when corpo- when time a at vested for decades. The The decades. for vested
interest rates sky high, high, sky rates interest suppliers have underin- have suppliers
tions soar and central banks end the party by pushing pushing by party the end banks central and soar tions wake of the IT boom/bust seven years ago. Commodity Commodity ago. years seven boom/bust IT the of wake
demand. The economies overheat, inflation expecta- inflation overheat, economies The demand. is now a big part) fell below replacement levels in the the in levels replacement below fell part) big a now is
then surges and competition for capital raises credit credit raises capital for competition and surges then wing modest. Capital spending (of which technology technology which (of spending Capital modest. wing
with a lag, businesses raise their capex. Total demand demand Total capex. their raise businesses lag, a with capital are extraordinarily high and real costs of borro- of costs real and high extraordinarily are capital
As confidence rises, consumers spend more and, and, more spend consumers rises, confidence As Are we scared? A little. Almost everywhere, returns on on returns everywhere, Almost little. A scared? we Are
business confidence is still low, savings are high and money easy. money and high are savings low, still is confidence business
are fuelled by a surplus of savings over investment: in their early stages, consumer and and consumer stages, early their in investment: over savings of surplus a by fuelled are
What kills bull markets? Usually, rising capital spending (capex). Financial bull markets markets bull Financial (capex). spending capital rising Usually, markets? bull kills What
won’t kill the bull the kill won’t
This time, capex capex time, This
26 ANNUAL REPORT 2006 • SKAGEN FUNDS • FUNDS SKAGEN • 2006 REPORT ANNUAL PORTFOLIO MANAGERS’ REPORT MANAGERS’ PORTFOLIO
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of the 1980s. the of
utilisation is still somewhat below the previous peak from the end end the from peak previous the below somewhat still is utilisation
market should co-exist and bring rewards to investors. to rewards bring and co-exist should market past four years. However, in the U.S. and the G7 countries, capacity capacity countries, G7 the and U.S. the in However, years. four past
first time in decades, rising capex and a healthy stock stock healthy a and capex rising decades, in time first corporate sector, global capacity utilisation has risen during the the during risen has utilisation capacity global sector, corporate
As a result of good economic growth and “underinvestment” by the the by “underinvestment” and growth economic good of result a As those who said “This time, it’s different”, but, for the the for but, different”, it’s time, “This said who those
looks unlikely. The unemployment lines are full of of full are lines unemployment The unlikely. looks
Source: Thomson Financial, UBS Financial, Thomson Source:
BRIC (equal wgt) (equal BRIC weighted) (cap G7 US pen in 2007 but - see our inflation theme – overkill overkill – theme inflation our see - but 2007 in pen
58 99 39 79 10 05 03 01 99 97 95 93 91 89 87 85
high levels. Some further credit constriction will hap- will constriction credit further Some levels. high
68%
70%
policy worldwide in 2006, global liquidity remains at at remains liquidity global 2006, in worldwide policy
72%
74%
for a mature beast. Despite the tightening of monetary monetary of tightening the Despite beast. mature a for
76%
The bottom line: the bull is alive and surprisingly virile virile surprisingly and alive is bull the line: bottom The 78%
80%
82%
84%
has defeated inflation. defeated has
86%
in the developed countries. For once, the supply side side supply the once, For countries. developed the in 88%
90%
has increased both productivity and returns on capital capital on returns and productivity both increased has
are continuing gains from labour deregulation which which deregulation labour from gains continuing are AND MAJOR EMERGING MARKETS (BRIC) MARKETS EMERGING MAJOR AND
INDUSTRIAL CAPACITY UTILISATION IN THE U.S., THE G-7 COUNTRIES COUNTRIES G-7 THE U.S., THE IN UTILISATION CAPACITY INDUSTRIAL robust world economic growth. Plus, of course, there there course, of Plus, growth. economic world robust
capex rose at an early stage of this cycle, underpinning underpinning cycle, this of stage early an at rose capex
industrial capex is now concentrated. Emerging market market Emerging concentrated. now is capex industrial two years. two
1992-2001 period. The level has risen somewhat during the past past the during somewhat risen has level The period. 1992-2001 particularly evident in the emerging economies where where economies emerging the in evident particularly
to operating income during the past five years, compared to the the to compared years, five past the during income operating to
its accompanying economy-wide productivity gains, gains, productivity economy-wide accompanying its
Listed global companies have invested significantly less relative relative less significantly invested have companies global Listed
As important is the efficiency of today’s capex and and capex today’s of efficiency the is important As
Source: Company Accounts, Deutsche Bank Estimates Bank Deutsche Accounts, Company Source:
Global capex/sales (%) capex/sales Global
2006E
2004 2003 2002 deflated. now has bubble the and modest 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 2005
6.0 More significant, its general inflationary impetus was was impetus inflationary general its significant, More
6.5
7.0
7.5
8.0
8.5
9.0
9.5
10.0
COMPANIES
CAPITAL SPENDING RELATIVE TO OPERATING INCOME FOR GLOBAL GLOBAL FOR INCOME OPERATING TO RELATIVE SPENDING CAPITAL
27 PORTFOLIO MANAGERS’ REPORT MANAGERS’ PORTFOLIO • ANNUAL REPORT 2006 • SKAGEN FUNDS SKAGEN • 2006 REPORT ANNUAL •
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global part of SKAGEN Vekst. Vekst. SKAGEN of part global The bad news: Information Technology, which lost lost which Technology, Information news: bad The
ability which also contributed to outperformance by the the by outperformance to contributed also which ability
industries had good frame conditions and high profit- high and conditions frame good had industries cent) but most international oil and oil service indices. indices. service oil and oil international most but cent)
via cheaper shares listed on other stock markets. These These markets. stock other on listed shares cheaper via only the Oslo Energy Index (which managed +32 per- +32 managed (which Index Energy Oslo the only
and fish farming, (i.e., typical “Norwegian” industries) industries) “Norwegian” typical (i.e., farming, fish and the largest sector, was up nearly 50 percent, beating not not beating percent, 50 nearly up was sector, largest the
policy of gaining exposure to oil, oil services, shipping shipping services, oil oil, to exposure gaining of policy reflecting a strong run by Telkom Indonesia. Energy, Energy, Indonesia. Telkom by run strong a reflecting
Vekst outperformed the Norwegian part. How? By our our By How? part. Norwegian the outperformed Vekst Telecoms, up 60 percent, were our top performer, performer, top our were percent, 60 up Telecoms,
As in 2005, though, the global portfolio in SKAGEN SKAGEN in portfolio global the though, 2005, in As
The Norwegian equity market was again hard to beat. beat. to hard again was market equity Norwegian The the Oslo market. Oslo the
remained at 30 percent of the fund, about half that of of that half about fund, the of percent 30 at remained
percent. industry weightings. Oil and energy, for instance, instance, for energy, and Oil weightings. industry
dividends and measured in Norwegian Kroner, by 28.2 28.2 by Kroner, Norwegian in measured and dividends The portfolio remained well diversified with stable stable with diversified well remained portfolio The
part outperformed the MSCI World Index, adjusted for for adjusted Index, World MSCI the outperformed part
of assets) did 3.5 percent better than OSEBX; the global global the OSEBX; than better percent 3.5 did assets) of than OSEBX. than
cent. The Norwegian part of the portfolio (54 percent percent (54 portfolio the of part Norwegian The cent. objective of generating a higher risk adjusted return return adjusted risk higher a generating of objective
Exchange Benchmark Index (OSEBX) gain of 32.4 per- 32.4 of gain (OSEBX) Index Benchmark Exchange 17.4 percent. Again, therefore, SKAGEN Vekst met its its met Vekst SKAGEN therefore, Again, percent. 17.4
holders of 32.5 percent, a nose ahead of the Oslo Stock Stock Oslo the of ahead nose a percent, 32.5 of holders than that of the OSEBX – 11.8 percent compared with with compared percent 11.8 – OSEBX the of that than
In 2006, SKAGEN Vekst achieved a return to unit unit to return a achieved Vekst SKAGEN 2006, In Risk, measured by standard deviation, was again lower lower again was deviation, standard by measured Risk,
Beating the world the Beating Safer than home than Safer
valued / higher quality shares than comparators listed in Oslo. in listed comparators than shares quality higher / valued
of the portfolio is either in genres of companies not accessible in Norway or lower lower or Norway in accessible not companies of genres in either is portfolio the of
a more balanced industry exposure than a typical Norwegian fund. The global part part global The fund. Norwegian typical a than exposure industry balanced more a
SKAGEN Vekst invests 50 percent in Norwegian equities and the rest globally, with with globally, rest the and equities Norwegian in percent 50 invests Vekst SKAGEN
SKAGEN Vekst SKAGEN
report
Portfolio managers’ managers’ Portfolio
28 ANNUAL REPORT 2006 • SKAGEN FUNDS • FUNDS SKAGEN • 2006 REPORT ANNUAL PORTFOLIO MANAGERS’ REPORT MANAGERS’ PORTFOLIO
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(see Family Owned Companies theme and SKAGEN SKAGEN and theme Companies Owned Family (see made value-destructive acquisitions of competitors Kerr Kerr competitors of acquisitions value-destructive made
Towards the end of the year we bought into LG Corp Corp LG into bought we year the of end the Towards pure oil & gas by selling Anadarko Petroleum (which (which Petroleum Anadarko selling by gas & oil pure
rig contractor Seadrill. We also reduced our exposure to to exposure our reduced also We Seadrill. contractor rig
surpassed our expectations. our surpassed significantly in CGG Geophysique and the Norwegian Norwegian the and Geophysique CGG in significantly
we judge to be stretched valuations, we cut our holdings holdings our cut we valuations, stretched be to judge we spring of 2006; both the company and share price have have price share and company the both 2006; of spring
Norwegian oil company Revus Energy. Because of what what of Because Energy. Revus company oil Norwegian France KLM was a new portfolio acquisition in the the in acquisition portfolio new a was KLM France
holding in US rig contractor Pride International and and International Pride contractor rig US in holding with supply; tanker rates will come under pressure. Air Air pressure. under come will rates tanker supply; with
more than 50 percent. During the year we doubled our our doubled we year the During percent. 50 than more ing years (30+ percent) and demand will not catch up up catch not will demand and percent) (30+ years ing
CGG Geophysique in the autumn giving us a gain of of gain a us giving autumn the in Geophysique CGG There will be big additions to the tanker fleet in com- in fleet tanker the to additions big be will There
mic company Veritas DGC. The latter was acquired by by acquired was latter The DGC. Veritas company mic nificantly reducing Hanjin Shipping and Transatlantic. Transatlantic. and Shipping Hanjin reducing nificantly
(the largest land driller in the world) and the US seis- US the and world) the in driller land largest (the Marine, Brostrøm and Navigazione Montanari and sig- and Montanari Navigazione and Brostrøm Marine,
Other new energy bets in 2006 were Nabors Industries Industries Nabors were 2006 in bets energy new Other We took profits in shipping, selling Hyundai Merchant Merchant Hyundai selling shipping, in profits took We
Changing the oil the Changing Flying high Flying
related activities. activities. related commodities.
both the Fred Olsen Energy subsidiary and other energy- other and subsidiary Energy Olsen Fred the both markets tight and profit margins high within many many within high margins profit and tight markets
share price gains on the back of further value creation in in creation value further of back the on gains price share long lead times for developing new capacity will keep keep will capacity new developing for times lead long
price increase possibilities. There is still potential for for potential still is There possibilities. increase price Despite the weakness in prices at the turn of the year, year, the of turn the at prices in weakness the Despite
from 50 to 40 percent, which should indicate further further indicate should which percent, 40 to 50 from mies will continue to drive most commodity markets. markets. commodity most drive to continue will mies
During 2006 the discount to net asset value narrowed narrowed value asset net to discount the 2006 During The development of China and other emerging econo- emerging other and China of development The
2005 annual report as deep discounted value creators. creators. value discounted deep as report annual 2005
NOK 156 million). The twins were highlighted in our our in highlighted were twins The million). 156 NOK mining company Apex Silver Mines. Silver Apex company mining
nies Ganger Rolf and Bonheur (NOK 106 million and and million 106 (NOK Bonheur and Rolf Ganger nies Finnish stainless steel company Outokumpu and US US and Outokumpu company steel stainless Finnish
139 million) and the Fred Olsen controlled twin compa- twin controlled Olsen Fred the and million) 139 Norwegian fertilizer company Yara. We bought into into bought We Yara. company fertilizer Norwegian
seismic company C G G Geophysique (a gain of NOK NOK of gain (a Geophysique G G C company seismic report. Other good contributors were Korea Zinc and and Zinc Korea were contributors good Other report.
Other good energy sector contributors were French French were contributors sector energy good Other viously identified and mentioned in last year’s annual annual year’s last in mentioned and identified viously
thus releasing one of the valuation triggers we had pre- had we triggers valuation the of one releasing thus
Norsk Hydro valuation. Hydro Norsk which sold its stake in French tube maker Vallourec, Vallourec, maker tube French in stake its sold which
at market, there would be significant upside in the the in upside significant be would there market, at huge profits in the German steel company Salzgitter Salzgitter company steel German the in profits huge
in Norsk Hydro. If its aluminium activities were valued valued were activities aluminium its If Hydro. Norsk in during the period we halved our holding. We also took took also We holding. our halved we period the during
Despite this, there still is a good conglomerate discount discount conglomerate good a is still there this, Despite lion. The share price appreciated close to 200 percent; percent; 200 to close appreciated price share The lion.
second best contributor to the fund in absolute terms. terms. absolute in fund the to contributor best second tion in SKAGEN Vekst, with an uplift of NOK 199 mil- 199 NOK of uplift an with Vekst, SKAGEN in tion
of NOK 173 million. This made the company the the company the made This million. 173 NOK of in basic industries and largest contributor to value crea- value to contributor largest and industries basic in
SKAGEN Vekst in 2006 and contributed with a return return a with contributed and 2006 in Vekst SKAGEN Swedish copper and zinc company Boliden was our star star our was Boliden company zinc and copper Swedish
11 percent. Norsk Hydro was our largest holding in in holding largest our was Hydro Norsk percent. 11 Metal stars Metal
Norsk Hydro was up 40 percent whereas Statoil rose rose Statoil whereas percent 40 up was Hydro Norsk
fell slightly. During 2006 2006 During slightly. fell tion vessels. tion
20 percent while Statoil Statoil while percent 20 handlers and construc- and handlers
Hydro gained more than than more gained Hydro for sophisticated anchor anchor sophisticated for
Norsk Hydro Norsk
the announcement, Norsk Norsk announcement, the tight market, especially especially market, tight
reflects this closely. On On closely. this reflects but there will still be a a be still will there but
between Statoil and and Statoil between
tion: the merger proposal proposal merger the tion: ply vessels are on order, order, on are vessels ply
reserves base and produc- and base reserves ices. Many new sup- new Many ices.
was the proposed merger merger proposed the was
the companies relative relative companies the demand for supply serv- supply for demand
Hydro’s when considering considering when Hydro’s plus continued strong strong continued plus
The big news in Norway Norway in news big The
was twice that of Norsk Norsk of that twice was - due to low valuations valuations low to due -
Statoil’s oil & gas activities activities gas & oil Statoil’s and Eidesvik Offshore Offshore Eidesvik and
argued that the value of of value the that argued Dof, Farstad Shipping Shipping Farstad Dof,
Norsk Hydro because of the conglomerate discount. We We discount. conglomerate the of because Hydro Norsk We still like supply vessel companies - Solstad Offshore, Offshore, Solstad - companies vessel supply like still We
Statoil and Norsk Hydro. We have always preferred preferred always have We Hydro. Norsk and Statoil for oil services will continue for at least a couple of years. years. of couple a least at for continue will services oil for
Big news in Norway: the proposed merger between between merger proposed the Norway: in news Big oil reserves is at an early phase; current strong demand demand strong current phase; early an at is reserves oil
Transocean and Nabors Industries. Acquisition of new new of Acquisition Industries. Nabors and Transocean Power to please to Power
Norwegian counterparts, we hold Pride International, International, Pride hold we counterparts, Norwegian
year before. year Since US rig companies are much cheaper than their their than cheaper much are companies rig US Since
Electronics, depreciated despite better earnings than the the than earnings better despite depreciated Electronics,
us one percent. One of our largest holdings, Samsung Samsung holdings, largest our of One percent. one us McGee and Western Gas Resources.) Gas Western and McGee
29 PORTFOLIO MANAGERS’ REPORT MANAGERS’ PORTFOLIO • ANNUAL REPORT 2006 • SKAGEN FUNDS SKAGEN • 2006 REPORT ANNUAL •
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equity funds. equity fish. and shipping service, oil oil,
Stock Exchange and what is normally found in pure Norwegian Norwegian pure in found normally is what and Exchange Stock as such industries, “Norwegian” typical in assets global its invest
SKAGEN Vekst has a better industry balance than both the Oslo Oslo the both than balance industry better a has Vekst SKAGEN to chosen deliberately has fund the because is this things, other
Oslo Stock Exchange, compared to broader global equity indices. indices. equity global broader to compared Exchange, Stock Oslo Among part. Norwegian the than stronger performed has Vekst
A big energy sector results in a distorted industry balance on the the on balance industry distorted a in results sector energy big A SKAGEN of part global the benchmarks, relevant the to Relative
Relative Performance Norway Performance Relative International Performance Relative
20 05 21 06 23 08 25 06 16 03 17 04 19 11.1 24 06 28 19 13 30 29 13 05 30
......
0 1 1 0 0 0 0 0 0 1 1 0 1 0 0 0 0 0 0 0 0 1 0
1. 1.2 0. 8. 7. 5. 4. 2. 1. 1.2 0. 8. 1.2 0.2 7. 8. 5. 7. 3. 5. 2. 4. 2. 2.
2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2
006 005 005 005 005 005 005 005 005 004 004 004 004 006 004 006 006 006 004 006 004 006 003 006
%1%2%3%4%50% 40% 30% 20% 10% 0%
-20
MATERIALS
0
TELECOM
UTILITIES 20
CONS STAPLES CONS
40
ENERGY
60 HEALTH CARE HEALTH
CONS DISC CONS
80
INDUSTRIALS/OTHER
OSEBX / Synthetic Index Synthetic / OSEBX
100
INFORMATION TECHNOLOGY INFORMATION
S & P 500 P & S
FINANCIALS 120
140
%
INTERNATIONAL PAST THREE YEARS THREE PAST INTERNATIONAL SKEWED INDUSTRY BALANCE (SOURCE: FIRST SECURITIES) FIRST (SOURCE: BALANCE INDUSTRY SKEWED
SKAGEN VEKST – RELATIVE PERFORMANCE NORWAY/ PERFORMANCE RELATIVE – VEKST SKAGEN BIG ENERGY SECTOR AT THE OSLO STOCK EXCHANGE MEANS MEANS EXCHANGE STOCK OSLO THE AT SECTOR ENERGY BIG
salmon and other farmed species will continue to rise rise to continue will species farmed other and salmon Norgani Hotels, one of the largest hotel property hold- property hotel largest the of one Hotels, Norgani
Farms by adding to our previous holding. Demand for for Demand holding. previous our to adding by Farms Tryggingamiostødin. We also doubled our bet on on bet our doubled also We Tryggingamiostødin.
significantly. We also participated in the IPO of Marine Marine of IPO the in participated also We significantly. acceptable bid from the Icelandic insurance company company insurance Icelandic the from bid acceptable
we got a revaluation of Nutreco and cut our holding holding our cut and Nutreco of revaluation a got we while the insurance company NEMI was sold after an an after sold was NEMI company insurance the while
took part by investing in Pan Fish. After the transaction transaction the After Fish. Pan in investing by part took asset manager, FIM Group, was new during the year year the during new was Group, FIM manager, asset
Harvest to Pan Fish instead of exiting via an IPO. We We IPO. an via exiting of instead Fish Pan to Harvest share price appreciation. The Finnish stockbroker and and stockbroker Finnish The appreciation. price share
particularly well. Unfortunately Nutreco sold Marine Marine sold Nutreco Unfortunately well. particularly Olav Thon, at NOK 69 million following 80 percent percent 80 following million 69 NOK at Thon, Olav
but remained at very profitable levels. Our picks did did picks Our levels. profitable very at remained but ciation of 40 percent. The highest contribution: from from contribution: highest The percent. 40 of ciation
half of the year, came under pressure in the autumn autumn the in pressure under came year, the of half The financial sector did well for us with an appre- an with us for well did sector financial The
the best year since 2000. Salmon prices rose in the first first the in rose prices Salmon 2000. since year best the Banking on brokers on Banking
Fish farming: we were right to be bullish; 2006 was was 2006 bullish; be to right were we farming: Fish
major additions were made in the sector last year. last sector the in made were additions major Fish is good for you for good is Fish
sector. Alk-Abello was sold due to high valuation. No No valuation. high to due sold was Alk-Abello sector.
cant premium. premium. cant well and contributed to an 18 percent return for the the for return percent 18 an to contributed and well
Hotels, we sold our shares to a competitor for a signifi- a for competitor a to shares our sold we Hotels, portive. Several minor pharma investments performed performed investments pharma minor Several portive.
Together with most other minority shareholders in Rica Rica in shareholders minority other most with Together low valuation, 12 times free cash flow, should be sup- be should flow, cash free times 12 valuation, low
than book value, represent a good buy opportunity. opportunity. buy good a represent value, book than share price had double digit performance; the current current the performance; digit double had price share
preferential shares which are priced considerably lower lower considerably priced are which shares preferential ing. In spite of disappointing pipeline development, the the development, pipeline disappointing of spite In ing.
We believe that the current low valuation, especially for for especially valuation, low current the that believe We In pharmaceuticals, US Pfizer is still the largest hold- largest the still is Pfizer US pharmaceuticals, In
profit margins within the mobile telephony division. division. telephony mobile the within margins profit
the price had fallen considerably due to, hopefully, low low hopefully, to, due considerably fallen had price the are compelling. are
performed well. We bought into LG Electronics after after Electronics LG into bought We well. performed earnings ratio, plus continued growth in Fresh Express, Express, Fresh in growth continued plus ratio, earnings
ers DSG International (owner of Elkjøp) and Expert Expert and Elkjøp) of (owner International DSG ers ings expectations are low. The current single digit price/ digit single current The low. are expectations ings
In the consumer discretionary sector, electronics retail- electronics sector, discretionary consumer the In storms in Latin America, and E-Coli in spinach, earn- spinach, in E-Coli and America, Latin in storms
salad. After higher banana tariffs in Europe, tropical tropical Europe, in tariffs banana higher After salad.
of the share price. share the of owns Fresh Express, the largest US distributor of fresh fresh of distributor US largest the Express, Fresh owns
value of the sum of the company’s divisions is far north north far is divisions company’s the of sum the of value producer/distributor, Chiquita Brands. The company company The Brands. Chiquita producer/distributor,
SKAGEN Global) was also added. Like Trelleborg, the the Trelleborg, Like added. also was Global) SKAGEN We went bananas via the world’s second largest banana banana largest second world’s the via bananas went We
reverse. German industrial conglomerate Siemens (see (see Siemens conglomerate industrial German reverse. Going bananas Going
tive division during 2006, but trends are about to to about are trends but 2006, during division tive
high rubber prices and low margins in its automo- its in margins low and prices rubber high 2000.
erate Trelleborg was also included: it suffered from from suffered it included: also was Trelleborg erate ment situation like we saw in the previous upswing in in upswing previous the in saw we like situation ment
company Akva Group. Swedish industrial conglom- industrial Swedish Group. Akva company margins, but so far there are no signs of an overinvest- an of signs no are there far so but margins,
equipment to the fish farming industry, Norwegian Norwegian industry, farming fish the to equipment salmon will probably put pressure on profit industry industry profit on pressure put probably will salmon
Global). We also added the leading global supplier of of supplier global leading the added also We Global). for the foreseeable future. At some stage oversupply of of oversupply stage some At future. foreseeable the for
30 ANNUAL REPORT 2006 • SKAGEN FUNDS • FUNDS SKAGEN • 2006 REPORT ANNUAL PORTFOLIO MANAGERS’ REPORT MANAGERS’ PORTFOLIO
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will result in reduced profit margins. profit reduced in result will now. than lower been
tant issue going forward will be whether overinvestment again again overinvestment whether be will forward going issue tant never have they yields, bond to relation in valuations consider
gins have resulted in big investments in new capacity. An impor- An capacity. new in investments big in resulted have gins you If years. 13 past the during prevalent levels the to compared
In many of the typically “Norwegian” industries, high profit mar- profit high industries, “Norwegian” typically the of many In valuations low carry companies European earnings, to Relative Offshore supply, AHTS
Offshore supply, PSV Subsea construction Source: Clarksons Shippin, Petrodata, first Sec first Petrodata, Shippin, Clarksons Source: Car Carriers Container Semi-rig Jackups
Seismic Tankers
Reefer
LNG RoRo Bulk EcoWin Reuters, Source: LPG
2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994
2006 1993 2005 0
2
10
8.5
10.0
8 9
10
12
15
15 16
8.0
20
19 20
12.5 22 21 22
23
7.5 24 25 25
P/E
30
30
30
7.0 32 32
15.0
35
37 40
6.5
40 41 42
17.5
50
6.0 48
5.5
60 20.0
5.0
70
22.5
4.5 Share of fleet > 25 years 25 > fleet of Share
80
4.0
Orderbook in % of fleet of % in Orderbook 25.0
90 3.5
90
Bond yield Bond
3.0 27.5 100
% %
(SOURCE: FIRST SECURITIES) FIRST (SOURCE: MUCH? (SOURCE: FIRST SECURITIES) FIRST (SOURCE: MUCH?
EXPECTING HIGH ACQUISITION ACTIVITY IN EUROPE EUROPE IN ACTIVITY ACQUISITION HIGH EXPECTING BIG SPENDING ON NEW CAPACITY. WHEN WILL THEY BUILD TOO TOO BUILD THEY WILL WHEN CAPACITY. NEW ON SPENDING BIG
for our unit holders in SKAGEN Vekst. SKAGEN in holders unit our for
represents good value for money and a good investment investment good a and money for value good represents
Brazil due to deregulation, we believe that the company company the that believe we deregulation, to due Brazil
six percent. With prospects of higher energy prices in in prices energy higher of prospects With percent. six
price/earnings ratio is single digit and the dividend yield yield dividend the and digit single is ratio price/earnings
mental valuation: price compared to equity is 1/3, the the 1/3, is equity to compared price valuation: mental
our sole significant holding. We still like its low funda- low its like still We holding. significant sole our
In utilities, the Brazilian power giant Eletrobras is still still is Eletrobras giant power Brazilian the utilities, In
and service provider based on CDMA technology. CDMA on based provider service and
which we expect to become a major wireless network network wireless major a become to expect we which
two emissions of the unlisted Nordisk Mobiltelefon, Mobiltelefon, Nordisk unlisted the of emissions two
Indosat which has lagged its rival. We participated in in participated We rival. its lagged has which Indosat
Indonesia after a big gain and reinvested part into into part reinvested and gain big a after Indonesia
In telecommunications we took some profits in Telkom Telkom in profits some took we telecommunications In
Telephone exchange Telephone
prospects.
ucts are strong, and continue to show great growth growth great show to continue and strong, are ucts
as a buying opportunity so long as the company’s prod- company’s the as long so opportunity buying a as
to most hated by many analysts. We choose to see this this see to choose We analysts. many by hated most to
company went from Oslo Stock Exchange’s most loved loved most Exchange’s Stock Oslo from went company
to corporate governance and accounting issues. The The issues. accounting and governance corporate to
continues to grow fast, but its valuation collapsed due due collapsed valuation its but fast, grow to continues attractive investments. attractive
added: the company has a strong balance sheet and and sheet balance strong a has company the added: creation for shareholders, should always be considered as as considered be always should shareholders, for creation
search engine company Fast Search and Transfer was was Transfer and Search Fast company engine search Low company valuations, with good fundamental value value fundamental good with valuations, company Low
Kyocera and Teleste made good contributions. The The contributions. good made Teleste and Kyocera such as private equity companies and investment funds. funds. investment and companies equity private as such
with Eltek. On the positive side, Tandberg Television, Television, Tandberg side, positive the On Eltek. with targets for either industrial players or financial vultures vultures financial or players industrial either for targets
Eltek/Nera, the latter acquired via the Nera merger merger Nera the via acquired latter the Eltek/Nera, be possible. Many of our holdings are potential takeover takeover potential are holdings our of Many possible. be
Samsung Electronics, Global IP Sound and the merged merged the and Sound IP Global Electronics, Samsung pany valuations, good investment results in 2007 should should 2007 in results investment good valuations, pany
The main contributors to the negative returns were were returns negative the to contributors main The economic situation globally. Combined with low com- low with Combined globally. situation economic
As noted above, information technology disappointed. disappointed. technology information above, noted As uations, this will continue. We expect a continued good good continued a expect We continue. will this uations,
long as we have low interest rates and low corporate val- corporate low and rates interest low have we as long
undervalued German real estate bank. estate real German undervalued M&A activity was one of the big themes in 2006. As As 2006. in themes big the of one was activity M&A
ers in the Nordic area, and added to Aareal Bank, an an Bank, Aareal to added and area, Nordic the in ers Prospects of good investment results in 2007 in results investment good of Prospects
31 PORTFOLIO MANAGERS’ REPORT MANAGERS’ PORTFOLIO • ANNUAL REPORT 2006 • SKAGEN FUNDS SKAGEN • 2006 REPORT ANNUAL •
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book ratio. This means there are good opportunities for revaluations. for opportunities good are there means This ratio. book companies.
development, the price of equity capital has not risen, based on the price/ the on based risen, not has capital equity of price the development, as lower interest payments, indicate low equity risk for European European for risk equity low indicate payments, interest lower as
Global return on equity is now at a historically high level. In spite of this this of spite In level. high historically a at now is equity on return Global Falling gearing levels relative to company capitalisation, as well well as capitalisation, company to relative levels gearing Falling
Net debt/equity (lhs) Net interest cover (x) cover interest Net (lhs) debt/equity Net * Return on equity minus G7 inflation rate / © BCA Research 2006 Research BCA © / rate inflation G7 minus equity on Return *
2007E 2006E
2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992
08 48 89 29 69 000 40 08 06 04 02 2000 98 96 94 92 90 88 86 84 82 80
0 0
2 10
1
4 20
6 30
4%
Price-to-book ratio (RS) ratio Price-to-book
8 40
2
10 50
12 60
8%
14 70
16 80 3
BIG GAP BIG
18 90
% USA Real* return on equity (LS) equity on return Real*
12%
4 Net debt/equity (lhs) Net interest cover (x) cover interest Net (lhs) debt/equity Net
2007E 2006E
2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992
0
0
10 2
GLOBAL RETURN ON EQUITY ON RETURN GLOBAL 20
4
30
6
40
take – the new Chinese owners clearly have bad feng shui. feng bad have clearly owners Chinese new the – take
8
50
producer Ssangyong Motors looks like an investment mis- investment an like looks Motors Ssangyong producer
10 60
Nielsen suffered from an unsettled legal settlement. Car Car settlement. legal unsettled an from suffered Nielsen 12 70
% Europe
Electronics with a mixed year in mobile handsets; Stolt- handsets; mobile in year mixed a with Electronics
Pride International, with some cost overruns; Samsung Samsung overruns; cost some with International, Pride
struggling from a deteriorating wood product market; market; product wood deteriorating a from struggling LITTLE LEVERAGE IN BOTH EUROPEAN AND U.S. COMPANIES U.S. AND EUROPEAN BOTH IN LEVERAGE LITTLE
own: building goods manufacturer Lousiana-Pacific, Lousiana-Pacific, manufacturer goods building own:
Inevitably, we had a few four-legged friends of our our of friends four-legged few a had we Inevitably,
current broad composition of the portfolio. the of composition broad current
many different markets and sectors is reflected in the the in reflected is sectors and markets different many and Brazilian Petrobras. Petrobras. Brazilian and
geographically. The fact that we are finding value in in value finding are we that fact The geographically. performers included Bank Austria, Telkom Indonesia Indonesia Telkom Austria, Bank included performers
companies were devalued. The same has happened happened has same The devalued. were companies brokers are now brave enough to tip). Perennial good good Perennial tip). to enough brave now are brokers
substantially revalued, while many large, world-class world-class large, many while revalued, substantially stocks’ (more broking jargon, for a former ‘dog’ which which ‘dog’ former a for jargon, broking (more stocks’
as previously cheap smaller company shares were were shares company smaller cheap previously as at low prices before they officially become ‘recovery ‘recovery become officially they before prices low at
have become “compressed” during the last five years, years, five last the during “compressed” become have which become our star performers. We bought them them bought We performers. star our become which
have more in larger companies. Valuations globally globally Valuations companies. larger in more have car producer Volkswagen, were all former pariahs pariahs former all were Volkswagen, producer car
investment is picked on its own merits, but we now now we but merits, own its on picked is investment chain Sainsbury, animal feed producer Nutreco and and Nutreco producer feed animal Sainsbury, chain
tions (i.e., stocked up on - hopefully ex - dogs). Each Each dogs). - ex hopefully - on up stocked (i.e., tions KLM, consumer products company SCA, supermarket supermarket SCA, company products consumer KLM,
ation, and reinvigorated the portfolio with new posi- new with portfolio the reinvigorated and ation, ex-canines. Mining company Boliden, Air France- Air Boliden, company Mining ex-canines.
to many great winners as they approached full valu- full approached they as winners great many to tion for SKAGEN Global: we made lots of money from from money of lots made we Global: SKAGEN for tion
job to make brokers rich. However, we said goodbye goodbye said we However, rich. brokers make to job propitious for investment. This was a happy conjunc- happy a was This investment. for propitious
Turnover remained at miserly 20 percent; it is not our our not is it percent; 20 miserly at remained Turnover Last year was also the Chinese year of the dog, generally generally dog, the of year Chinese the also was year Last
Buying big Buying capers Canine
until these are highly visible. highly are these until
label then blinds the market to improving fundamentals fundamentals improving to market the blinds then label
owning. The power of social psychology is such that the the that such is psychology social of power The owning.
ommend and fund managers become embarrassed about about embarrassed become managers fund and ommend
can quickly become a pariah, which brokers cease to rec- to cease brokers which pariah, a become quickly can
a company which has screwed up and disappointed. A dog dog A disappointed. and up screwed has which company a
“Dog” is stockbroking abuse for an underperforming share, share, underperforming an for abuse stockbroking is “Dog”
Solid returns Solid
SKAGEN Global SKAGEN
32 ANNUAL REPORT 2006 • SKAGEN FUNDS • FUNDS SKAGEN • 2006 REPORT ANNUAL PORTFOLIO MANAGERS’ REPORT MANAGERS’ PORTFOLIO
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have exploded. The money is used to acquire listed companies. listed acquire to used is money The exploded. have
During the past three years, the total assets in private equity funds funds equity private in assets total the years, three past the During
analysts that survived the 2000-2002 bear market? bear 2000-2002 the survived that analysts
sistently lagged behind actual earnings. Was it only the conservative conservative the only it Was earnings. actual behind lagged sistently
Since 2003, analysts’ expectations for corporate earnings have per- have earnings corporate for expectations analysts’ 2003, Since Source: Priate Equity Analyst, Steven N. Keplan N. Steven Analyst, Equity Priate Source:
2006 2005 2004 2003 2002 2001 2000 1989 1988 1987 1986 1984 1983 1982 1991 1990 1989 1988 1987 1986 1985 1984 1983 1982 1981 198
0
Kilde: IBES, UBS IBES, Kilde:
88 09 29 49 69 89 000 20 40 06 05 04 03 02 01 2000 99 98 97 96 95 94 93 92 91 90 89 88 20
-40%
40
-30% 60
80
-20%
Realised 100
-10%
120
0%
140
160 10%
Private Equity funds under management (annualised) management under funds Equity Private
D bn D
20%
30%
12m Fwd Growth Fwd 12m
TOTAL ASSETS IN EQUITY FUNDS EQUITY IN ASSETS TOTAL
40%
Index in 2006. 2006. in Index 2003
than twice the 10.8 percent return on the MSCI World World MSCI the on return percent 10.8 the twice than COMPANIES HAVE EXCEEDED ANALYSTS’ EXPECTATIONS SINCE 2002- SINCE EXPECTATIONS ANALYSTS’ EXCEEDED HAVE COMPANIES
SKAGEN Global returned 24.1 percent in 2006, more more 2006, in percent 24.1 returned Global SKAGEN
on being close to your customer, and your customer’s customer’s your and customer, your to close being on
exit. An advantage to the bank is the network effect based based effect network the is bank the to advantage An exit. rate governance alone, the potential in LG Corp is big. is Corp LG in potential the alone, governance rate
ment of the borrower, with regular dividends and a natural natural a and dividends regular with borrower, the of ment guide to possible revaluation from improvement in corpo- in improvement from revaluation possible to guide
interest. The lender participates in the return on invest- on return the in participates lender The interest. has clearly increased; if Samsung Electronics is a rough rough a is Electronics Samsung if increased; clearly has
operating according to the prohibition against charging charging against prohibition the to according operating ously murky corporate governance. The ambition level level ambition The governance. corporate murky ously
Islamic finance. Bank Asya is the largest Turkish bank bank Turkish largest the is Asya Bank finance. Islamic in English and seems keen to distance itself from previ- from itself distance to keen seems and English in
You don’t need to be Muslim to make money out of of out money make to Muslim be to need don’t You Conglomerates theme). The group has started to report report to started has group The theme). Conglomerates
book and the P/E is below 9. (See our Family Owned Owned Family our (See 9. below is P/E the and book Turkish delight Turkish
from its subsidiaries. The valuation is just over once once over just is valuation The subsidiaries. its from
and real estate. The company also receives licensing fees fees licensing receives also company The estate. real and ing the conglomerate discount, the shares are cheap. cheap. are shares the discount, conglomerate the ing
Healthcare, plus meaningful value in private companies companies private in value meaningful plus Healthcare, more potential, than the current whole. Even before los- before Even whole. current the than potential, more
LG Chemical, LG Telecom, and LG Household & & Household LG and Telecom, LG Chemical, LG expect the parts to be worth considerably more, and have have and more, considerably worth be to parts the expect
holding company). The holdings include LG Electronics, Electronics, LG include holdings The company). holding company will split into three separate units in 2007; we we 2007; in units separate three into split will company
a conglomerate of many companies gathered round a a round gathered companies many of conglomerate a has been repaid and equity has grown by 50 percent. The The percent. 50 by grown has equity and repaid been has
in South Korea. (Chaebol is a Korean expression for for expression Korean a is (Chaebol Korea. South in balance sheet has improved noticeably; one third of debt debt of third one noticeably; improved has sheet balance
LG Corp is the holding company of the LG chaebol chaebol LG the of company holding the is Corp LG been on the recovery path since 2002, since when the the when since 2002, since path recovery the on been
capital should be around 20 percent. The company has has company The percent. 20 around be should capital Lucky break Lucky
ing businesses with stable margins, and return on invested invested on return and margins, stable with businesses ing
company grew through acquisitions of smaller but lead- but smaller of acquisitions through grew company highlight the value of these positions. positions. these of value the highlight
electronics, healthcare and engineered products. The The products. engineered and healthcare electronics, Current merger activity among Asian telecoms should should telecoms Asian among activity merger Current
American-based Tyco International is in fire & security, security, & fire in is International Tyco American-based as yet underappreciated in the company’s valuation. valuation. company’s the in underappreciated yet as
drive Singtel’s subscriber and earnings growth, but are are but growth, earnings and subscriber Singtel’s drive Fire three Fire
Thai AIS, and Globe in the Philippines. These will will These Philippines. the in Globe and AIS, Thai
include Indian Bharti Airtel, Indonesian Telkomsel, Telkomsel, Indonesian Airtel, Bharti Indian include cheap in both absolute and relative terms. relative and absolute both in cheap
- in some of Asia’s leading telecom operators. Stakes Stakes operators. telecom leading Asia’s of some in - rate structure will improve dramatically and Siemens is is Siemens and dramatically improve will structure rate
ing significant positions - often bought at low prices prices low at bought often - positions significant ing venture with Nokia on favourable terms. The corpo- The terms. favourable on Nokia with venture
company to pay a dividend of 4.5 percent, while build- while percent, 4.5 of dividend a pay to company work equipment division is to be merged into a joint joint a into merged be to is division equipment work
vider in Australia (Optus). Stable cash flow enables the the enables flow cash Stable (Optus). Australia in vider been aggressively restructuring. For example, the net- the example, For restructuring. aggressively been
bent telecom operator in Singapore and a leading pro- leading a and Singapore in operator telecom bent However, profitability is low, so new management has has management new so low, is profitability However,
Singapore Telecommunication (SingTel) is the incum- the is (SingTel) Telecommunication Singapore This is reflected in the company’s growing order book. book. order growing company’s the in reflected is This
history, more people will live in urban than rural areas. areas. rural than urban in live will people more history, Talk is cheap is Talk
of mega cities: by 2008, for the first time in human human in time first the for 2008, by cities: mega of
medical technology. Siemens is a play on the growth growth the on play a is Siemens technology. medical We bought into the bank on under two times book value. book times two under on bank the into bought We
is a leader in automation, energy, transport systems and and systems transport energy, automation, in leader a is Growth is conservatively financed from retained earnings. earnings. retained from financed conservatively is Growth
glomerate Siemens, an infrastructure developer which which developer infrastructure an Siemens, glomerate on assets of over four percent and on equity of 30 percent. percent. 30 of equity on and percent four over of assets on
New positions include large German industrial con- industrial German large include positions New agement. Bank Asya is an intermediary making a return return a making intermediary an is Asya Bank agement.
customer, which generates growth and improves risk man- risk improves and growth generates which customer, Moving to the city the to Moving
33 PORTFOLIO MANAGERS’ REPORT MANAGERS’ PORTFOLIO • ANNUAL REPORT 2006 • SKAGEN FUNDS SKAGEN • 2006 REPORT ANNUAL •
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the achievements of his hero, Fidel Castro - are are - Castro Fidel hero, his of achievements the prices. prices.
and Venezuela’s Hugo Chavez’ promise to replicate replicate to promise Chavez’ Hugo Venezuela’s and last ten years, which are not yet reflected in today’s today’s in reflected yet not are which years, ten last
Occasional mistakes - Thailand’s currency fiasco, fiasco, currency Thailand’s - mistakes Occasional in the companies and macro environment over the the over environment macro and companies the in
by year-end, fuelled mainly by domestic buying.) buying.) domestic by mainly fuelled year-end, by July 1997. A lot of positive things have happened happened have things positive of lot A 1997. July
(although they then more than fully recovered recovered fully than more then they (although them just above the peak prior to the Asia crises of of crises Asia the to prior peak the above just them
ing markets plunged by an average 26 percent, percent, 26 average an by plunged markets ing highs in the global emerging market indices took took indices market emerging global the in highs
in June US$20 billion was pulled out and emerg- and out pulled was billion US$20 June in done by previous crises: December 2006 all-time all-time 2006 December crises: previous by done
emerging markets. After starting 2006 strongly, strongly, 2006 starting After markets. emerging been spectacular, but this only erased the damage damage the erased only this but spectacular, been
mines the large but fickle investment flows into into flows investment fickle but large the mines kets only 4.5 percent. True, the last five years have have years five last the True, percent. 4.5 only kets
lio managers (and their risk appetite) which deter- which appetite) risk their (and managers lio index has returned 7.3 percent p.a., emerging mar- emerging p.a., percent 7.3 returned has index
Traditionally it is the ebb and flow of global portfo- global of flow and ebb the is it Traditionally we launched SKAGEN Vekst (in late ‘93) the world world the ‘93) late (in Vekst SKAGEN launched we
Investment returns, though, have not kept up: since since up: kept not have though, returns, Investment Fickle foreigners... Fickle
the developing world. developing the
chip company – wherever domiciled – now derives a large percentage of its growth from from growth its of percentage large a derives now – domiciled wherever – company chip
using fat cash flows to vacuum up Western household names. Almost every major blue blue major every Almost names. household Western up vacuum to flows cash fat using
corporate giants are huge, successful and increasingly engaged in ‘reverse colonisation’, colonisation’, ‘reverse in engaged increasingly and successful huge, are giants corporate
world population, half the world economy and two-thirds of global growth. Emerging Emerging growth. global of two-thirds and economy world the half population, world
(but not just) China – is without parallel in history. They represent over 80 percent of of percent 80 over represent They history. in parallel without is – China just) not (but
Why emerging markets? Recent economic expansion of developing countries – especially especially – countries developing of expansion economic Recent markets? emerging Why
emerging markets emerging
Still strong in in strong Still
SKAGEN Kon-Tiki SKAGEN
34 ANNUAL REPORT 2006 • SKAGEN FUNDS • FUNDS SKAGEN • 2006 REPORT ANNUAL PORTFOLIO MANAGERS’ REPORT MANAGERS’ PORTFOLIO
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towards its ambitions created a good opportunity. good a created ambitions its towards Pan Fish, budding agro-giant Cresud in Argentina. Argentina. in Cresud agro-giant budding Fish, Pan
negative oil sentiment and capital market scepticism scepticism market capital and sentiment oil negative drinks manufacturer Yazicilar Holding, Norwegian Norwegian Holding, Yazicilar manufacturer drinks
products in Eastern Europe at the end of the year as as year the of end the at Europe Eastern in products positive early benefits: Pivo Lasko in Slovenia, soft soft Slovenia, in Lasko Pivo benefits: early positive
a major Polish refiner and marketer of petroleum petroleum of marketer and refiner Polish major a We also added consumer staple names with some some with names staple consumer added also We
sell spades in the Klondike. We added PKN Orlen, Orlen, PKN added We Klondike. the in spades sell
coffers offer huge profit opportunities to those who who those to opportunities profit huge offer coffers travel operator China Travel. China operator travel
NOC’s with longer time horizons and brimming brimming and horizons time longer with NOC’s Conglomerates theme and SKAGEN Global) and and Global) SKAGEN and theme Conglomerates
costs when energy prices fall, has been suspended. suspended. been has fall, prices energy when costs Grupo Elektra; LG Corp (see the Family Owned Owned Family the (see Corp LG Elektra; Grupo
The ‘normal’ cycle, in which oil companies slash slash companies oil which in cycle, ‘normal’ The in 2006); Mexican retailer and consumer financier financier consumer and retailer Mexican 2006); in
The world energy infrastructure is badly neglected. neglected. badly is infrastructure energy world The (too early – we lost NOK 216 million on this holding holding this on million 216 NOK lost we – early (too
infrastructure, Russian consumer); LG Electronics Electronics LG consumer); Russian infrastructure, Spades in the Klondike the in Spades
and shipyards and bought Enka Insaat (Middle East East (Middle Insaat Enka bought and shipyards and
a result, we reduced our interest in ocean shipping shipping ocean in interest our reduced we result, a and political risk. risk. political and
The emerging market consumer has come of age. As As age. of come has consumer market emerging The exposure to companies directly exposed to oil price price oil to exposed directly companies to exposure
over 20 percent during the year, but reduced our our reduced but year, the during percent 20 over First time buyers time First
We increased the energy content in the portfolio to to portfolio the in content energy the increased We
(NOC’s) to increase reserves and build capacity. capacity. build and reserves increase to (NOC’s) in 2007. in
cially ambitious plans by National Oil Companies Companies Oil National by plans ambitious cially This can proved good investment opportunities opportunities investment good proved can This
momentum in international E&P activity, espe- activity, E&P international in momentum in line with fluctuations in commodity prices. prices. commodity in fluctuations with line in
gas and oil price down and disregarded the strong strong the disregarded and down price oil and gas towards companies will be liable to mood swings swings mood to liable be will companies towards
oil service companies followed the North American American North the followed companies service oil these at 28 percent of the portfolio. Attitudes Attitudes portfolio. the of percent 28 at these
International and National Oilwell Varco. The US US The Varco. Oilwell National and International universe. SKAGEN Kon-Tiki is ‘underweight’ in in ‘underweight’ is Kon-Tiki SKAGEN universe.
(COSL) offset a poor performance from Pride Pride from performance poor a offset (COSL) percent of earnings in the global emerging market market emerging global the in earnings of percent
returns from Seadrill and China Oilfield Services Services Oilfield China and Seadrill from returns Energy and materials together represent close to 40 40 to close represent together materials and Energy
In energy, good good energy, In
revaluation in 2007. 2007. in revaluation Gaining energy Gaining
file are triggers for for triggers are file
22.8 percent in 2006 in percent 22.8
international pro- international NOK.
sibilities and a rising rising a and sibilities percent measured in in measured percent
delivered a return of of return a delivered
nickel. Spinoff pos- Spinoff nickel. which returned 22 22 returned which
Inco, world leader in in leader world Inco, traded Net index index Net traded
SKAGEN Kon-Tiki Kon-Tiki SKAGEN via the takeover of of takeover the via mark, the MSCI EM EM MSCI the mark,
tional mining giant giant mining tional p.a. and our bench- our and p.a.
company to interna- to company goal of 20 percent percent 20 of goal
state dominated local local dominated state both our long-term long-term our both
which in 2006 completed its transformation from from transformation its completed 2006 in which Tiki, the 22.8 percent return marginally beating beating marginally return percent 22.8 the Tiki,
Tiki instead backed Brazilian C. Vale Rio Doce, Doce, Rio Vale C. Brazilian backed instead Tiki 2006 was a reasonably good year for SKAGEN Kon- SKAGEN for year good reasonably a was 2006
sold a major part of our holding. SKAGEN Kon- SKAGEN holding. our of part major a sold
was only slightly revalued during the year, but we we but year, the during revalued slightly only was good returns. good
infrastructure (Mexican Railroads). The company company The Railroads). (Mexican infrastructure the journey from here to there will produce years of of years produce will there to here from journey the
this recently acquired solidity a new backbone in in backbone new a solidity acquired recently this will eventually command premium ratings – and and – ratings premium command eventually will
company (Southern Copper Co) and built upon upon built and Co) Copper (Southern company Superior growth rates and high returns on capital capital on returns high and rates growth Superior
pleted its restructuring into a pure copper/metals copper/metals pure a into restructuring its pleted value seekers globalise the capital markets as well. well. as markets capital the globalise seekers value
commodity prices. Grupo Mexico successfully com- successfully Mexico Grupo prices. commodity traged away as ambitious locals and hungry global global hungry and locals ambitious as away traged
profitability, low company valuations and galloping galloping and valuations company low profitability, ners from globalisation? Discounts will be arbi- be will Discounts globalisation? from ners
als, in which tighter global money played monster monster played money global tighter which in als, growth: who needs fickle foreigners? Hardly win- Hardly foreigners? fickle needs who growth:
The difficult match to call in 2006 was materi- was 2006 in call to match difficult The els are increasingly available to finance domestic domestic finance to available increasingly are els
for domestic savings means that high savings lev- savings high that means savings domestic for Brazil’s new giant new Brazil’s
ing markets. The development of better channels channels better of development The markets. ing
still attractive, undervalued opportunities in emerg- in opportunities undervalued attractive, still and still delivering a five percent dividend yield. yield. dividend percent five a delivering still and
All this is good news: it guarantees that there are are there that guarantees it news: good is this All Petrobras, growing its asset base by 10-15 percent pa, pa, percent 10-15 by base asset its growing Petrobras,
SKAGEN Vekst, we are holding onto the undervalued undervalued the onto holding are we Vekst, SKAGEN ...make way for locals for way ...make
and global operators (China Oilfield Services). Unlike Unlike Services). Oilfield (China operators global and
valued assets (Pride), industry consolidators (Seadrill) (Seadrill) consolidators industry (Pride), assets valued one-offs. isolated than rather
At year end, the portfolio was balanced between under- between balanced was portfolio the end, year At contagion of sources potential as misconstrued
35 PORTFOLIO MANAGERS’ REPORT MANAGERS’ PORTFOLIO • ANNUAL REPORT 2006 • SKAGEN FUNDS SKAGEN • 2006 REPORT ANNUAL •
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By our own standards, 2006 was a mixed year for for year mixed a was 2006 standards, own our By tion would be markedly higher. With huge free cash cash free huge With higher. markedly be would tion
change their handset every 18 months?) – the valua- the – months?) 18 every handset their change Keeping the faith the Keeping
“consumer staples” - which indeed it is (who doesn’t doesn’t (who is it indeed which - staples” “consumer
for 2004; we are still waiting. waiting. still are we 2004; for included in this sector. If it was categorized as as categorized was it If sector. this in included
value release trigger. This was originally scheduled scheduled originally was This trigger. release value major investment, Samsung Electronics, is wrongly wrongly is Electronics, Samsung investment, major
“normal” global ADR trading of the shares, a major major a shares, the of trading ADR global “normal” categorised as either industrials or services. Our Our services. or industrials either as categorised
the next ten years. We await US SEC clearance for for clearance SEC US await We years. ten next the boom 1999/2000 – previously companies had been been had companies previously – 1999/2000 boom
with earnings growing 12-17 percent annually over over annually percent 12-17 growing earnings with as a misunderstanding during the technology technology the during misunderstanding a as
underlying assets), a dividend yield of six percent, percent, six of yield dividend a assets), underlying information technology. This sector came about about came sector This technology. information
to book value (maybe more than 75 percent to to percent 75 than more (maybe value book to One of the sectors which was derated in 2006: 2006: in derated was which sectors the of One
returns. These prefs trade at a 65 percent discount discount percent 65 a at trade prefs These returns.
and a major contributor to our 2006 investment investment 2006 our to contributor major a and below book value. value. book below
ence shares, a good performer, the largest holding, holding, largest the performer, good a shares, ence land China) earning decent returns, and still valued valued still and returns, decent earning China) land
The proceeds were reinvested in Eletrobras prefer- Eletrobras in reinvested were proceeds The (gritting their teeth over lost opportunities in main- in opportunities lost over teeth their (gritting
Asya. We also own some Taiwanese stockbrokers stockbrokers Taiwanese some own also We Asya.
having been one of 2006’s best performers. best 2006’s of one been having Management, and Turkish shariah financier Bank Bank financier shariah Turkish and Management,
remaining holding was sold just after Christmas, Christmas, after just sold was holding remaining UK-Asian oriented fund manager Aberdeen Asset Asset Aberdeen manager fund oriented UK-Asian
the rise of the shares in 2006 gave us vertigo. Our Our vertigo. us gave 2006 in shares the of rise the such as Indonesian Trimegah, Korean Kiwom.com, Kiwom.com, Korean Trimegah, Indonesian as such
of Russia. Politically poisoned, oligark tainted, tainted, oligark poisoned, Politically Russia. of rewards from deregulation of local capital markets, markets, capital local of deregulation from rewards
the vast power generating and distributing assets assets distributing and generating power vast the also holds some innovative companies reaping reaping companies innovative some holds also
sure to Russian power producer UES, which runs runs which UES, producer power Russian to sure Brasil) performed beautifully. SKAGEN Kon-Tiki Kon-Tiki SKAGEN beautifully. performed Brasil)
One of our best bets in 2006 was our modest expo- modest our was 2006 in bets best our of One ing Latin American consumer finance (Banco do do (Banco finance consumer American Latin ing
European banking (Bank Austria) and develop- and Austria) (Bank banking European Russian power play power Russian
Our other financial holdings representing East East representing holdings financial other Our
regulatory and structural changes. changes. structural and regulatory
the speculative wave. wave. speculative the come, as a result of strong growth, good results and and results good growth, strong of result a as come,
in the short term we benefited from partaking in in partaking from benefited we term short the in They should outperform their peers in the year to to year the in peers their outperform should They
assets and (soon) 50 percent of earnings. However, However, earnings. of percent 50 (soon) and assets Indosat, both underperformed their local markets. markets. local their underperformed both Indosat,
emerging markets, which represents 30 percent of of percent 30 represents which markets, emerging instead. Thailand operator TAC and Indonesian Indonesian and TAC operator Thailand instead.
buyer overshadowed a sparkling performance in the the in performance sparkling a overshadowed buyer PLDT, hopes they will start talking to each other other each to talking start will they hopes PLDT,
“dying” British house house British “dying” ing Philippine telco telco Philippine ing
consumer and the the and consumer major holder in lead- in holder major
the “sick” American American “sick” the ing First Pacific, Pacific, First ing
2006
HSBC’s, exposure to to exposure HSBC’s, sages. Our new hold- new Our sages.
third largest bank, bank, largest third sending SMS mes- SMS sending
which was derated in in derated was which
benefit. The world’s world’s The benefit. record holders for for holders record
was no immediate immediate no was Filipinos are world world are Filipinos
IT was one of the sectors sectors the of one was IT
higher returns. There There returns. higher
book, for less risk and and risk less for book, the company. the
HSBC at two times times two at HSBC tinued revaluation of of revaluation tinued
tling for boring old old boring for tling should lead to con- to lead should
Chinese banking IPO’s at three times book, set- book, times three at IPO’s banking Chinese Increasing earnings and a soaring return on capital capital on return soaring a and earnings Increasing
wasn’t much of a temptation) to buy overvalued overvalued buy to temptation) a of much wasn’t at least 800 million more to join the conversation. conversation. the join to more million 800 least at
In financials we resisted the temptation (well, it it (well, temptation the resisted we financials In connected to the world and each other – there are are there – other each and world the to connected
leaves us breathless. 100 million people are now now are people million 100 breathless. us leaves Free(d) banking Free(d)
development (organisationally as well as financially) financially) as well as (organisationally development
Leading Indian mobile operator Bharti Airtel’s Airtel’s Bharti operator mobile Indian Leading we sold Pfizer to make space. space. make to Pfizer sold we
more than 7.5 percent of the portfolio at year-end; year-end; at portfolio the of percent 7.5 than more Telephone numbers Telephone
valuations and global potential. They represented represented They potential. global and valuations
the best names in generics, with high growth, low low growth, high with generics, in names best the should create opportunities in 2007. in opportunities create should
Richter and Hanmi Pharma in Korea are some of of some are Korea in Pharma Hanmi and Richter but a more unified appraisal of branches and sectors sectors and branches of appraisal unified more a but
2; Turkish Eczabaci Group, Hungarian Gedeon Gedeon Hungarian Group, Eczabaci Turkish 2; tech boom? We are still underweight in the sector, sector, the in underweight still are We boom? tech
the world, with a median P/E of ten and a P/B of of P/B a and ten of P/E median a with world, the ued. Let’s hope for a reclassification soon – or a new new a or – soon reclassification a for hope Let’s ued.
and lowest valued portfolio of pharmaceuticals in in pharmaceuticals of portfolio valued lowest and are still great and the company remains underval- remains company the and great still are
SKAGEN Kon-Tiki probably has the best spread spread best the has probably Kon-Tiki SKAGEN returns in cash to shareholders, the fundamentals fundamentals the shareholders, to cash in returns
flows, 20 percent+ return on capital and increasing increasing and capital on return percent+ 20 flows, Cheap pills Cheap
36 ANNUAL REPORT 2006 • SKAGEN FUNDS • FUNDS SKAGEN • 2006 REPORT ANNUAL PORTFOLIO MANAGERS’ REPORT MANAGERS’ PORTFOLIO
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does not fully reflect the return gap. return the reflect fully not does
than the global return on equity. The relative price/book ratio still still ratio price/book relative The equity. on return global the than
For six years, emerging market return on equity has been stronger stronger been has equity on return market emerging years, six For
Kilde: UBS UBS Kilde:
09 49 820 20 06 04 02 2000 98 96 94 92 90
-10 -70
-60
-8
-50
-6 -40
P/BV relative (rhs) relative P/BV
-30
-4
-20
-2
-10
0 0
10
2
20
ROE Differential ROE
4 30
% %
STILL LOW VALUATIONS FOR GLOBAL EMERGING MARKETS MARKETS EMERGING GLOBAL FOR VALUATIONS LOW STILL
this sector the global winner in 2006. in winner global the sector this
experienced falling multiples, whereas strong earnings growth made made growth earnings strong whereas multiples, falling experienced
rising multiples. An interesting point is that commodity companies companies commodity that is point interesting An multiples. rising
ple sectors, such as utilities and telecommunications, experienced experienced telecommunications, and utilities as such sectors, ple
pharmaceuticals, experienced falling multiples, whereas low-multi- whereas multiples, falling experienced pharmaceuticals,
divergence of multiples in 2006. High-multiple sectors, such as IT and and IT as such sectors, High-multiple 2006. in multiples of divergence
In spite of big earnings differences among global sectors, we did see see did we sectors, global among differences earnings big of spite In Source: UBS, MSCI, IBES MSCI, UBS, Source: Consumer Stap. Consumer Disc. Health Care Industrials Financials Materials Telecom
Utilities Energy
IT
-10
-5
0
5
10
15
20
25
30
Dividends expansion Multiple growth Earnings
35
%
BETWEEN GLOBAL SECTORS IN 2006 IN SECTORS GLOBAL BETWEEN
BIG DIFFERENCE IN RETURN AND MULTIPLE DEVELOPMENT DEVELOPMENT MULTIPLE AND RETURN IN DIFFERENCE BIG
relative performance by the emerging markets. emerging the by performance relative
With strong economic growth, we still see opportunities for strong strong for opportunities see still we growth, economic strong With
oped markets for some years, we are still far from the peak of 1994. 1994. of peak the from far still are we years, some for markets oped
Even though emerging market equities have done better than devel- than better done have equities market emerging though Even
good year for SKAGEN Kon-Tiki. SKAGEN for year good * Rebased to january 1986 = 100 / Kilde: Morgan Stanley Capital International Capital Stanley Morgan Kilde: / 100 = 1986 january to Rebased *
68 09 49 80 06 02 98 96 94 92 90 88 86 408 04 2000 in 2006. This means that 2007 should be another another be should 2007 that means This 2006. in
2007 and companies will grow and earn more than than more earn and grow will companies and 2007
100 triggered. More undervaluation will be corrected in in corrected be will undervaluation More triggered.
correction
a bull market bull a
of how the correction of undervaluation will be be will undervaluation of correction the how of
2004 was 2004 150
value at a discount, with a practical understanding understanding practical a with discount, a at value
200 our basic approach – buying good quality and good good and quality good buying – approach basic our
We remain very comfortable with, and confident in, in, confident and with, comfortable very remain We
250
major holdings lagged, diluting the overall numbers. numbers. overall the diluting lagged, holdings major
faith’, together with perennial dependables. Some Some dependables. perennial with together faith’, 300
the peak the
1994 marked 1994 in Croatia and Slovenia) where we had ‘kept the the ‘kept had we where Slovenia) and Croatia in
including previously underperforming stocks (e.g., (e.g., stocks underperforming previously including
SKAGEN Kon-Tiki. We had some good winners, winners, good some had We Kon-Tiki. SKAGEN GLOBAL EMERGING MARKETS FAR FROM HISTORICAL PEAK HISTORICAL FROM FAR MARKETS EMERGING GLOBAL
37 PORTFOLIO MANAGERS’ REPORT MANAGERS’ PORTFOLIO • ANNUAL REPORT 2006 • SKAGEN FUNDS SKAGEN • 2006 REPORT ANNUAL •
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tion targets. Inflation targets provide a clear indication indication clear a provide targets Inflation targets. tion years, the global real rate of interest has remained low low remained has interest of rate real global the years,
Several central banks, e.g. the Fed, have implicit infla- implicit have Fed, the e.g. banks, central Several Despite strong growth in the global economy the past past the economy global the in growth strong Despite
inflation targets, and many more are expected to follow. follow. to expected are more many and targets, inflation Where is the global rate heading? rate global the is Where
Currently two dozen countries have explicit numerical numerical explicit have countries dozen two Currently
inflationary developments and targets. targets. and developments inflationary
our inflation theme) and free capital movement. movement. capital free and theme) inflation our at whether monetary policy is correct compared to to compared correct is policy monetary whether at
SKAGEN Tellus: widespread inflation targeting (see (see targeting inflation widespread Tellus: SKAGEN also be undervalued. But in this case the analysis looks looks analysis the case this in But undervalued. be also
Two significant developments justify the launch of of launch the justify developments significant Two (corrected for country risk premium). Short bonds can can bonds Short premium). risk country for (corrected
expected inflation and the global real rate of interest interest of rate real global the and inflation expected Playing globalisation Playing
ued if long nominal rates are higher than the sum of of sum the than higher are rates nominal long if ued
value in long euro bonds. bonds. euro long in value buy bonds that are undervalued. A bond is underval- is bond A undervalued. are that bonds buy
governments in the euro zone. Currently we see little little see we Currently zone. euro the in governments whether government bonds are correctly valued; we we valued; correctly are bonds government whether
and certificates issued by solid European banks and and banks European solid by issued certificates and is simple. We analyse local bond markets and estimate estimate and markets bond local analyse We simple. is
portfolio has been in short euro denominated bonds bonds denominated euro short in been has portfolio Based on this SKAGEN Tellus’s investment philosophy philosophy investment Tellus’s SKAGEN this on Based
In order to diversify currency risk, 35 percent of the the of percent 35 risk, currency diversify to order In
SKAGEN Tellus uses the euro as its base currency. currency. base its as euro the uses Tellus SKAGEN of the county’s inflation target and global real rates. rates. real global and target inflation county’s the of
rates. Long nominal rates therefore become a function function a become therefore rates nominal Long rates.
Thailand were duds. duds. were Thailand together and contributes to convergence in the long real real long the in convergence to contributes and together
made positive contributions. Iceland, the US, and and US, the Iceland, contributions. positive made of capital ties individual country’s capital markets markets capital country’s individual ties capital of
Hungarian government bonds. Australia and Israel Israel and Australia bonds. government Hungarian risk premium in long nominal rates. Free movement movement Free rates. nominal long in premium risk
We did well in Brazilian, Turkish, South African, and and African, South Turkish, Brazilian, in well did We of expected inflation in the long term and reduce the the reduce and term long the in inflation expected of
on the Lehman Global Treasury 3-5 years reference index. index. reference years 3-5 Treasury Global Lehman the on
aged global bond fund, returned 1.4 percent in euros, 3.6 percent above the return return the above percent 3.6 euros, in percent 1.4 returned fund, bond global aged
Since its inception on 29th September 2006, SKAGEN Tellus, our new actively man- actively new our Tellus, SKAGEN 2006, September 29th on inception its Since
for new fund new for
Good start start Good
SKAGEN Tellus SKAGEN
38 ANNUAL REPORT 2006 • SKAGEN FUNDS • FUNDS SKAGEN • 2006 REPORT ANNUAL PORTFOLIO MANAGERS’ REPORT MANAGERS’ PORTFOLIO
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riod, the benchmark lost 2.2 percent. 2.2 lost benchmark the riod, percent. 2.9 lost benchmark the period, same
Tellus yielded 1.4 percent, measured in EUR. During the same pe- same the During EUR. in measured percent, 1.4 yielded Tellus the During NOK. in measured percent, 0.7 yielded Tellus SKAGEN
From its launch on September 29th until the end of 2006, SKAGEN SKAGEN 2006, of end the until 29th September on launch its From 2006, of end the until 29th September on launch its From
Kilde: Lehman og SKAGEN og Lehman Kilde:
Kilde: Lehman og SKAGEN og Lehman Kilde:
Sept. 2006 Oct. 2006 Nov. 2006 Dec. 2006 Dec. 2006 Nov. 2006 Oct. 2006 Sept.
Sept. 2006 Oct. 2006 Nov. 2006 Dec. 2006 Dec. 2006 Nov. 2006 Oct. 2006 Sept.
96
11,8 11,8
97 97
11,9 11,9
98 98
Lehman Global Treasury Index 3-5 years 3-5 Index Treasury Global Lehman Lehman Global Treasury Index 3-5 years 3-5 Index Treasury Global Lehman
12,0 12,0
99 99
100 100 12,1 12,1
101 101
12,2 12,2
102 102
12,3 12,3
103 103
SKAGEN Tellus SKAGEN
SKAGEN Tellus SKAGEN
12,4 12,4
104 104
FUND PRICE MEASURED IN NOK IN MEASURED PRICE FUND FUND PRICE MEASURED IN EUR IN MEASURED PRICE FUND
U.S. economic slowdown in 2007. We do not share share not do We 2007. in slowdown economic U.S.
analysts expect aggressive Fed easing to follow a sharp sharp a follow to easing Fed aggressive expect analysts Patient investors, though, should be well rewarded. rewarded. well be should though, investors, Patient
downwards movements in the Fed policy rate. Many Many rate. policy Fed the in movements downwards should have an investment horizon of at least a year. year. a least at of horizon investment an have should
This U.S. bet is not based on a view on short term term short on view a on based not is bet U.S. This impact the fund’s monthly performance; unit holders holders unit performance; monthly fund’s the impact
term fluctuations in currency and interest rates will will rates interest and currency in fluctuations term
approximately 80 basis points to fall. fall. to points basis 80 approximately to achieve high rates of return in several markets. Short Short markets. several in return of rates high achieve to
means that nominal yields on long U.S. bonds have have bonds U.S. long on yields nominal that means The fund’s portfolio is well diversified, and positioned positioned and diversified, well is portfolio fund’s The
within that zone in the not too distant future. This This future. distant too not the in zone that within We have high expectations for SKAGEN Tellus in 2007. 2007. in Tellus SKAGEN for expectations high have We
we expect it to implement an explicit inflation target target inflation explicit an implement to it expect we High expectations to 2007 to expectations High
that its comfort zone for inflation is one to two percent; percent; two to one is inflation for zone comfort its that
percent. We think the Fed is serious when it stresses stresses it when serious is Fed the think We percent. upward pressure on the dollar in 2007. 2007. in dollar the on pressure upward
that market participants expect inflation to average 2.3 2.3 average to inflation expect participants market that prudent monetary policies will most likely put some some put likely most will policies monetary prudent
U.S. securities s e t a c i d n i s e i t i r u c e s y r u s a e r t . S . U d e t s u j d a - n o i t a l f n i ances”, will sink much further. A resilient economy and and economy resilient A further. much sink will ances”,
Currently the spread between yields on nominal and and nominal on yields between spread the Currently looming U.S. recession or accelerating “external imbal- “external accelerating or recession U.S. looming
share the consensus view that the dollar, due to a a to due dollar, the that view consensus the share
rates of interest and long term inflation expectations. inflation term long and interest of rates We are not short term currency traders, but we don’t don’t we but traders, currency term short not are We
percent. This is higher than warranted by long run real real run long by warranted than higher is This percent.
ing in 2025, with a yield that currently stands at 4.9 4.9 at stands currently that yield a with 2025, in ing in real interest rates at the end of 2006. of end the at rates interest real in
Our US investment is in a government bond matur- bond government a in is investment US Our indicators were already reflected in the world-wide hike hike world-wide the in reflected already were indicators
US investments. In addition, better than expected U.S. U.S. expected than better addition, In investments. US
disagree. ioned by the global capital market which is available for for available is which market capital global the by ioned
Many investors currently hate long U.S. bonds. We We bonds. U.S. long hate currently investors Many ness investment, but the effect on long yields is cush- is yields long on effect the but investment, ness
yields is limited. Higher growth might spur U.S. busi- U.S. spur might growth Higher limited. is yields Betting against the U.S. consensus consensus U.S. the against Betting
than expected GDP growth on long U.S. treasury treasury U.S. long on growth GDP expected than
savings without driving the real interest rate up. up. rate interest real the driving without savings our case for long bonds? We think the effect of higher higher of effect the think We bonds? long for case our
Increased investments can be financed by increasing increasing by financed be can investments Increased upward pressure on long interest rates and undermine undermine and rates interest long on pressure upward
for additional increases in the global real interest rate. rate. interest real global the in increases additional for Could higher than currently expected U.S. growth put put growth U.S. expected currently than higher Could
through 2007, but we do not anticipate much room room much anticipate not do we but 2007, through
growth. We expect the global expansion to continue continue to expansion global the expect We growth. be cut marginally by the end of the year. year. the of end the by marginally cut be
to better than expected indicators of real economic economic real of indicators expected than better to continue throughout 2007, the policy rate might well well might rate policy the 2007, throughout continue
point - increase in the global real rate of interest, due due interest, of rate real global the in increase - point core inflation that began in late 2006 will probably probably will 2006 late in began that inflation core
two percent. In December there was a small – 25 basis basis 25 – small a was there December In percent. two its outlook for inflation. Since the trend of contracting contracting of trend the Since inflation. for outlook its
estimate is a global long run real rate of slightly above above slightly of rate real run long global a is estimate expect the Fed to adjust short term rates according to to according rates term short adjust to Fed the expect
as a result of an aging population. Currently our best best our Currently population. aging an of result a as to cut rates to stimulate the economy. We do, however, however, do, We economy. the stimulate to rates cut to
due to an increase in the savings rate in many countries countries many in rate savings the in increase an to due this bearish view and don’t therefore expect the Fed Fed the expect therefore don’t and view bearish this
39 PORTFOLIO MANAGERS’ REPORT MANAGERS’ PORTFOLIO • ANNUAL REPORT 2006 • SKAGEN FUNDS SKAGEN • 2006 REPORT ANNUAL •
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began 2006 at a staggering seven percent adjusted adjusted percent seven staggering a at 2006 began our guess for Norwegian money rates. money Norwegian for guess our
The real yield on the Brazilian government bond bond government Brazilian the on yield real The fund against market volatility; it is also well ahead of of ahead well also is it volatility; market against fund
are better value. Today’s high yield will bolster the the bolster will yield high Today’s value. better are ...and the carnival goes on goes carnival the ...and
bonds in Norway since longer maturities elsewhere elsewhere maturities longer since Norway in bonds
3.4 percent. We still hold mostly short duration floater floater duration short mostly hold still We percent. 3.4 Mexican peso lost us two percent. percent. two us lost peso Mexican
Iceland. This is much better than last year’s start of of start year’s last than better much is This Iceland. added 8 percent to the total return; a depreciating depreciating a return; total the to percent 8 added
enhanced mainly by higher rates in Norway and and Norway in rates higher by mainly enhanced generated 14 percent. The appreciating Brazilian real real Brazilian appreciating The percent. 14 generated
The fund starts this year with a yield of 5.2 percent, percent, 5.2 of yield a with year this starts fund The government bond fell from 8.3 to 7.4 percent, which which percent, 7.4 to 8.3 from fell bond government
return of 25 percent. The yield on our Mexican Mexican our on yield The percent. 25 of return Looking sexy Looking
12.5 to 10.2 percent, which generated us a (local) (local) a us generated which percent, 10.2 to 12.5
the second half. The Brazilian bond yield fell from from fell yield bond Brazilian The half. second the percent for the year. the for percent
due to election worries, but gave fabulous returns in in returns fabulous gave but worries, election to due Norwegian three month state bill index returned 2.9 2.9 returned index bill state month three Norwegian
Brazilian government bonds. They both started poorly poorly started both They bonds. government Brazilian first six months but was reached over 12 months. The The months. 12 over reached was but months six first
Our two biggest plays in 2006 were Mexican and and Mexican were 2006 in plays biggest two Our Norwegian money market fell short of target in the the in target of short fell market money Norwegian
SKAGEN Avkastning’s target of out-doing the the out-doing of target Avkastning’s SKAGEN Samba and salsa rocked... salsa and Samba
ond consecutive year that the fund beat its benchmark by north of three percent. three of north by benchmark its beat fund the that year consecutive ond
Norwegian three year bond index, which did only 0.9 percent. 2006 was the sec- the was 2006 percent. 0.9 only did which index, bond year three Norwegian
SKAGEN Avkastning returned 3.9 percent. This was a whole lot better than the the than better lot whole a was This percent. 3.9 returned Avkastning SKAGEN
2007: promising 2007: –
2006: average average 2006:
SKAGEN Avkastning SKAGEN
40 ANNUAL REPORT 2006 • SKAGEN FUNDS • FUNDS SKAGEN • 2006 REPORT ANNUAL PORTFOLIO MANAGERS’ REPORT MANAGERS’ PORTFOLIO
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perspective. We have a maximum investment horizon horizon investment maximum a have We perspective.
expectations are favourable from an absolute value value absolute an from favourable are expectations
ing interest rate risk. We only add risk if risk/reward risk/reward if risk add only We risk. rate interest ing
SKAGEN Avkastning has a flexible mandate regard- mandate flexible a has Avkastning SKAGEN
they continue to underperform. underperform. to continue they
over the year and we may increase holdings of these if if these of holdings increase may we and year the over
ment bonds are still expensive but that may change change may that but expensive still are bonds ment
money market. Norwegian longer maturity govern- maturity longer Norwegian market. money
cent compared with 2.2 percent for the Norwegian Norwegian the for percent 2.2 with compared cent
three years, with a yearly average return of 5.1 per- 5.1 of return average yearly a with years, three
bonds globally. This worked out well over the last last the over well out worked This globally. bonds
longer maturity bets on undervalued government government undervalued on bets maturity longer
short duration Norwegian bonds and 20 percent percent 20 and bonds Norwegian duration short
The fund’s portfolio still comprises about 80 percent percent 80 about comprises still portfolio fund’s The
Safety first Safety
most compelling interest rate story around. around. story rate interest compelling most
below one percent during the year, making Iceland the the Iceland making year, the during percent one below
decreased private consumption. Inflation could fall to to fall could Inflation consumption. private decreased
(which are included in CPI), falling energy prices and and prices energy falling CPI), in included are (which
percent; it will fall rapidly due to stable housing prices prices housing stable to due rapidly fall will it percent;
peaked at 8.6 percent in August but is now below seven seven below now is but August in percent 8.6 at peaked
The economic fundamentals are also better: inflation inflation better: also are fundamentals economic The
rency is perhaps ten percent undervalued. undervalued. percent ten perhaps is rency
cheapest government paper in the world. The cur- The world. the in paper government cheapest
on the longest maturity Icelandic bond makes it the the it makes bond Icelandic maturity longest the on
percent, higher than most ‘junk’ bonds, the real rate rate real the bonds, ‘junk’ most than higher percent,
percent to below ten percent in 2007. At about 6.5 6.5 about At 2007. in percent ten below to percent
the current account deficit will contract from 24 24 from contract will deficit account current the
stability is returning. The financial system is stronger; stronger; is system financial The returning. is stability
The harsh monetary policy is not much changed but but changed much not is policy monetary harsh The
Crashes, however, create investment opportunities. opportunities. investment create however, Crashes,
on amphetamines. on
expect monetary management to be a stock car race race car stock a be to management monetary expect
return; normally we like crises but even we didn’t didn’t we even but crises like we normally return;
shaving an alarming 1.5 percent from the fund’s fund’s the from percent 1.5 alarming an shaving
Our Icelandic bonds fluctuated violently in 2006, 2006, in violently fluctuated bonds Icelandic Our
Iceland: in the right direction right the in Iceland:
ment bond maturing in 2016. in maturing bond ment
should release a lot more value from our long govern- long our from value more lot a release should
central bank to cut its rate below ten percent. This This percent. ten below rate its cut to bank central
a responsible fiscal policy will hold - and enable the the enable and - hold will policy fiscal responsible a
of the inflation target, a freely moving currency and and currency moving freely a target, inflation the of
we expect more pleasant surprises. The three pillars pillars three The surprises. pleasant more expect we
13.2 percent in 2006, far more than consensus, and and consensus, than more far 2006, in percent 13.2
The central bank’s target rate was reduced from 18 to to 18 from reduced was rate target bank’s central The
nominal interest rate to squeeze it further in 2007. 2007. in further it squeeze to rate interest nominal
2006; we expect falling commodity prices and a high high a and prices commodity falling expect we 2006;
Brazilian inflation fell from 4.5 to three percent in in percent three to 4.5 from fell inflation Brazilian volatility is an acceptable two percent. percent. two acceptable an is volatility
particularly volatile last spring, but three year average average year three but spring, last volatile particularly
high. unit holders), which limits total risk. The fund was was fund The risk. total limits which holders), unit
for credit risk; now down to 4.7 percent, it is still too too still is it percent, 4.7 to down now risk; credit for of six months (and a minimum of six months for for months six of minimum a (and months six of
41 PORTFOLIO MANAGERS’ REPORT MANAGERS’ PORTFOLIO • ANNUAL REPORT 2006 • SKAGEN FUNDS SKAGEN • 2006 REPORT ANNUAL •
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invested 80 percent in the benchmark and 20 percent in risk-free securities (ST1X). A A (ST1X). securities risk-free in percent 20 and benchmark the in percent 80 invested fund has achieved a higher return than the benchmark. The total of positive and nega- and positive of total The benchmark. the than return higher a achieved has fund
fund has suffered a loss corresponding to the loss it would have suffered if it were were it if suffered have would it loss the to corresponding loss a suffered has fund ing the relevant period. If positive divergences are greater than the negative ones, the the ones, negative the than greater are divergences positive If period. relevant the ing
cal upturns and downturns, respectively. A relative loss of 80 percent means that the the that means percent 80 of loss relative A respectively. downturns, and upturns cal shows positive or negative annual divergence dur- divergence annual negative or positive shows divergence index Positive/negative
is a measure of the ability to achieve excess returns in cycli- in returns excess achieve to ability the of measure a is loss gain/relative Relative
measure of a fund’s independence of the benchmark. the of independence fund’s a of measure
deviation may indicate high risk. high indicate may deviation ability to create regular excess returns relative to the benchmark, but is often used as a a as used often is but benchmark, the to relative returns excess regular create to ability
ard deviations from the expected return is approximately five percent. A high standard standard high A percent. five approximately is return expected the from deviations ard benchmark during the relevant period. Relative volatility measures the manager’s manager’s the measures volatility Relative period. relevant the during benchmark
one standard deviation. The probability that returns will deviate more than two stand- two than more deviate will returns that probability The deviation. standard one is the standard deviation of the annual excess return relative to the the to relative return excess annual the of deviation standard the is volatility Relative
mately a 65 percent probability that annual returns will be in the range of plus/minus plus/minus of range the in be will returns annual that probability percent 65 a mately
is a measure of the variation of annual returns. There is approxi- is There returns. annual of variation the of measure a is deviation Standard or lower than the benchmark. the than lower or
standard deviation, these measures may explain why the standard deviation is higher higher is deviation standard the why explain may measures these deviation, standard
All calculations of measurements are based on monthly observations. monthly on based are measurements of calculations All is performing better than the market in a cyclical upturn. If you compare with a fund’s fund’s a with compare you If upturn. cyclical a in market the than better performing is
in a cyclical downturn. A relative gain of more than 100 percent means that the fund fund the that means percent 100 than more of gain relative A downturn. cyclical a in
EXPLANATION OF TERMS OF EXPLANATION relative loss of less than 100 percent means that the fund is losing less than the market market the than less losing is fund the that means percent 100 than less of loss relative
UPDATED AS OF 31.12.2006 OF AS UPDATED
INDEX DIVERGENCE RATIO 1,92 2,99 3,13 1,15 1,15 3,13 2,99 1,92 RATIO DIVERGENCE INDEX
RELATIVE GAIN/LOSS RATIO 1,43 1,81 1,33 1,23 1,23 1,33 1,81 1,43 RATIO GAIN/LOSS RELATIVE
EFRAC ESRMNSSNESAT START SINCE MEASUREMENTS PERFORMANCE
NEGATIVE INDEX DIVERGENCE 8,43 8,65 5,58 3,38 3,38 5,58 8,65 8,43 DIVERGENCE INDEX NEGATIVE
POSITIVE INDEX DIVERGENCE 16,14 25,84 17,49 3,89 3,89 17,49 25,84 16,14 DIVERGENCE INDEX POSITIVE
RELATIVE LOSS 73 % 96 % 99 % 81 % % 81 % 99 % 96 % 73 LOSS RELATIVE
RELATIVE GAIN 103 % 173 % 132 % 100 % % 100 % 132 % 173 % 103 GAIN RELATIVE
IKMAUEET IC TR START SINCE MEASUREMENTS RISK
INDEX DIVERGENCE RATIO 1,62 4,05 - 1,04 1,04 - 4,05 1,62 RATIO DIVERGENCE INDEX
INFORMATION RATIO 0,78 2,32 - 0,05 0,05 - 2,32 0,78 RATIO INFORMATION
SHARPE RATIO BENCHMARK INDEX 0,84 -0,19 - 0,68 0,68 - -0,19 0,84 INDEX BENCHMARK RATIO SHARPE
SHARPE RATIO FUND 1,29 0,97 - 1,01 1,01 - 0,97 1,29 FUND RATIO SHARPE
RELATIVE GAIN/LOSS RATIO 1,28 1,97 - 1,21 1,21 - 1,97 1,28 RATIO GAIN/LOSS RELATIVE
EFRAC ESRMNSLS 0MNH MONTHS 60 LAST MEASUREMENTS PERFORMANCE
NEGATIVE INDEX DIVERGENCE 7,81 5,76 - 2,87 2,87 - 5,76 7,81 DIVERGENCE INDEX NEGATIVE
POSITIVE INDEX DIVERGENCE 12,64 23,35 - 2,99 2,99 - 23,35 12,64 DIVERGENCE INDEX POSITIVE
RELATIVE VOLATILITY 7,69 8,44 - 2,33 2,33 - 8,44 7,69 VOLATILITY RELATIVE
STANDARD DEVIATION BENCHMARK INDEX 21,47 15,87 - 2,68 2,68 - 15,87 21,47 INDEX BENCHMARK DEVIATION STANDARD
STANDARD DEVIATION FUND 18,59 18,71 - 1,92 1,92 - 18,71 18,59 FUND DEVIATION STANDARD
RELATIVE LOSS 78 % 84 % - 71 % % 71 - % 84 % 78 LOSS RELATIVE
RELATIVE GAIN 100 % 166 % - 86 % % 86 - % 166 % 100 GAIN RELATIVE
IKMAUEET AT6 OTS MONTHS 60 LAST MEASUREMENTS RISK
ININDEX DIVERGENCE RATIO 1,03 3,51 2,85 1,94 1,94 2,85 3,51 1,03 RATIO DIVERGENCE ININDEX
INFORMATION RATIO 0,02 2,07 1,42 1,01 1,01 1,42 2,07 0,02 RATIO INFORMATION
SHARE RATIO BENCHMARK INDEX 2,03 0,71 1,19 0,33 0,33 1,19 0,71 2,03 INDEX BENCHMARK RATIO SHARE
SHARPE RATIO FUND 2,39 1,68 1,63 1,46 1,46 1,63 1,68 2,39 FUND RATIO SHARPE
RELATIVE GAIN/LOSS RATIO 1,11 1,57 1,20 2,05 2,05 1,20 1,57 1,11 RATIO GAIN/LOSS RELATIVE
EFRAC ESRMNSLS 6MNH MONTHS 36 LAST MEASUREMENTS PERFORMANCE
NEGATIVE INDEX DIVERGENCE 9,56 5,50 4,19 2,13 2,13 4,19 5,50 9,56 DIVERGENCE INDEX NEGATIVE
POSITIVE INDEX DIVERGENCE 9,89 19,29 11,93 4,12 4,12 11,93 19,29 9,89 DIVERGENCE INDEX POSITIVE
EAIEVLTLT 81 81 67 2,15 6,77 8,18 8,18 VOLATILITY RELATIVE
TNADDVAINBNHAKIDX 71 1,8 80 2,12 18,04 11,08 17,14 INDEX BENCHMARK DEVIATION STANDARD
TNADDVAINFN 1,8 56 2,3 1,97 21,13 15,64 14,58 FUND DEVIATION STANDARD
RELATIVE LOSS 87 % 104 % 100 % 66 % 66 % 100 % 104 % 87 LOSS RELATIVE
RELATIVE GAIN 97 % 163 % 119 % 136 % 136 % 119 % 163 % 97 GAIN RELATIVE
RISK MEASUREMENTS LAST 36 MONTHS SKAGEN VEKST SKAGEN GLOBAL SKAGEN KON-TIKI SKAGEN AVKASTNING AVKASTNING SKAGEN KON-TIKI SKAGEN GLOBAL SKAGEN VEKST SKAGEN MONTHS 36 LAST MEASUREMENTS RISK
UPDATED AS OF 31.12.2006 OF AS UPDATED
ST4X BOND INDEX 0,89 % 1,72 % 2,96 % 4,95 % 5,53 % 5,36 % 6,35 % 6,35 % 5,36 % 5,53 % 4,95 % 2,96 % 1,72 % 0,89 INDEX BOND ST4X
SKAGEN AVKASTNING 3,85 % 4,84 % 5,13 % 5,38 % 5,65 % 5,23 % 6,79 % 6,79 % 5,23 % 5,65 % 5,38 % 5,13 % 4,84 % 3,85 AVKASTNING SKAGEN
LEHMAN GLOBAL TREASURY INDEX 3-5 YR -2,87 % -2,87 YR 3-5 INDEX TREASURY GLOBAL LEHMAN
SKAGEN TELLUS 0,66 % 0,66 TELLUS SKAGEN
21,96 % 34,91 % 27,66 % 32,89 % 16,70 % 16,70 % 32,89 % 27,66 % 34,91 % 21,96 (NOK) INDEX MARKETS EMERGING STANLEY MORGAN
SKAGEN KON-TIKI 22,75 % 39,82 % 37,28 % 51,37 % 31,69 % 31,69 % 51,37 % 37,28 % 39,82 % 22,75 KON-TIKI SKAGEN
MORGAN STANLEY WORLD INDEX (NOK) 10,79 % 16,22 % 12,16 % 15,94 % 2,31 % 3,28 % 3,28 % 2,31 % 15,94 % 12,16 % 16,22 % 10,79 (NOK) INDEX WORLD STANLEY MORGAN
SKAGEN GLOBAL 24,07 % 31,42 % 29,09 % 36,80 % 21,88 % 23,85 % 23,85 % 21,88 % 36,80 % 29,09 % 31,42 % 24,07 GLOBAL SKAGEN
OSE BENCHMARK INDEX 32,43 % 36,40 % 37,08 % 39,82 % 21,37 % 11,74 % 13,15 % 13,15 % 11,74 % 21,37 % 39,82 % 37,08 % 36,40 % 32,43 INDEX BENCHMARK OSE
SKAGEN VEKST 32,49 % 40,10 % 37,26 % 44,00 % 27,41 % 21,33 % 22,24 % 22,24 % 21,33 % 27,41 % 44,00 % 37,26 % 40,10 % 32,49 VEKST SKAGEN
RETURNS 12 MONTHS 24 MONTHS 36 MONTHS 48 MONTHS 60 MONTHS 120 MONTHS SINCE START SINCE MONTHS 120 MONTHS 60 MONTHS 48 MONTHS 36 MONTHS 24 MONTHS 12 RETURNS
RETURN AND RISK MEASUREMENTS RISK AND RETURN
42 ANNUAL REPORT 2006 • SKAGEN FUNDS • FUNDS SKAGEN • 2006 REPORT ANNUAL RETURN AND RISK MEASUREMENTS RISK AND RETURN
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strues the risk as irregular excess returns (not necessarily negative excess returns). excess negative necessarily (not returns excess irregular as risk the strues volatility measures the ability to generate regular excess return. excess regular generate to ability the measures volatility
chance of negative index divergences, as opposed to the Information Ratio, which con- which Ratio, Information the to opposed as divergences, index negative of chance ratio measures the manager’s ability to create certain excess returns, whereas relative relative whereas returns, excess certain create to ability manager’s the measures ratio
negative benchmark divergence. The benchmark divergence ratio interprets risk as the the as risk interprets ratio divergence benchmark The divergence. benchmark negative where risk is construed as the chance of uneven excess returns. Thus, the information information the Thus, returns. excess uneven of chance the as construed is risk where
rather than a passive manager. The higher the number, the better you get paid for each each for paid get you better the number, the higher The manager. passive a than rather returns. The information ratio is also used as a measure of risk-adjusted excess returns, returns, excess risk-adjusted of measure a as used also is ratio information The returns.
divergences. This is a measure of the ability to create excess returns by being an active active an being by returns excess create to ability the of measure a is This divergences. the benchmark. The higher the score, the higher the probability of achieving excess excess achieving of probability the higher the score, the higher The benchmark. the
shows the ratio between positive and negative benchmark benchmark negative and positive between ratio the shows ratio divergence Index measures the probability of the fund generating a higher return than than return higher a generating fund the of probability the measures Ratio Information
only be used to compare funds investing in the same market. same the in investing funds compare to used be only used as an absolute measure of risk-adjusted returns. risk-adjusted of measure absolute an as used
used to compare funds in different markets, as opposed to the Sharpe Index, which may may which Index, Sharpe the to opposed as markets, different in funds compare to used equity market. Thus, the value may be used as a long-term measure of risk, but is often often is but risk, of measure long-term a as used be may value the Thus, market. equity
return is better than the risk-adjusted return of the market. Thus, the measure may be be may measure the Thus, market. the of return risk-adjusted the than better is return the probability, the more certain are the chances of achieving excess returns in the the in returns excess achieving of chances the are certain more the probability, the
is strongly correlated with the Sharpe Index, but also shows whether the risk-adjusted risk-adjusted the whether shows also but Index, Sharpe the with correlated strongly is the risk-free interest rate. The higher the score, the higher the probability. The higher higher The probability. the higher the score, the higher The rate. interest risk-free the
tive to the benchmark. When ranking funds investing in the same market, the measure measure the market, same the in investing funds ranking When benchmark. the to tive measures the probability of the fund generating a higher return than than return higher a generating fund the of probability the measures Index Sharpe The
A value above one means that the fund is getting better paid for the risk assumed rela- assumed risk the for paid better getting is fund the that means one above value A
shows the ratio between relative gain and relative loss. loss. relative and gain relative between ratio the shows ratio loss gain/relative Relative tive divergences is a measure of the fund’s independence from the benchmark. the from independence fund’s the of measure a is divergences tive
result of negative price developments. Investments in foreign currencies are not hedged. hedged. not are currencies foreign in Investments developments. price negative of result
associated with subscription and management. The investment return may become negative as a a as negative become may return investment The management. and subscription with associated
NOTE TO FUND RATING TABLE: TABLE: RATING FUND TO NOTE pend on market developments, the fund manager’s skill, the fund’s risk profile as well as expenses expenses as well as profile risk fund’s the skill, manager’s fund the developments, market on pend
Historical returns are no guarantee for future returns. Future returns will, among other things, de- things, other among will, returns Future returns. future for guarantee no are returns Historical
Empty fields indicate that ratings have not been carried out for the fund. the for out carried been not have ratings that indicate fields Empty
Ratings updated as of 31st December 2006. 2006. December 31st of as updated Ratings
rating) Best = (5 Wassum ● ● ● ● ● ● ● ● ● ● WWWW WWW W
★★ ★★ ★★ ★★★ ★★★★★ ★★★★★ ★★★★★ Morningstar (5 = Best rating) Best = (5 Morningstar
EM Global EM Nordic Equity Global Equity
2006 Europe Awards Fund
3 yrs yrs 3 yrs 3&5 yrs 3&5
Lipper
Best fund Best fund Best fund Best
o f54N.1o 0 102 of 1 No. 554 of 1 No. performance) year (3 Citywire
A A AA AAA AAA Standard & Poor (AAA = Best rating) Best = (AAA Poor & Standard
Standard & Poor (5 = Best rating) Best = (5 Poor & Standard ✪ ✪ ✪ ✪ ✪ ✪ ✪ ✪ ✪ ✪ ✪ ✪ ✪ ✪ ✪ ✪ ✪ ✪ ✪ ✪ ✪ ✪ ✪ ✪ ✪ ✪ ✪ ✪ ✪ ✪ ✪ ✪ ✪ ✪ ✪ ✪ ✪ ✪ ✪ ✪
Kon-Tiki Vekst Global Avkastning
FUND RATING FUND
SKAGEN SKAGEN SKAGEN SKAGEN
Fund rating Fund
43 FUND RATING RATING FUND • ANNUAL REPORT 2006 • SKAGEN FUNDS SKAGEN • 2006 REPORT ANNUAL •
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due to increased volume in Sweden and internationally. internationally. and Sweden in volume increased to due portfolio performing a little better than the Norwegian Norwegian the than better little a performing portfolio
lion NOK, a new record. The increase was primarily primarily was increase The record. new a NOK, lion Vekst. Excess returns were due to the Norwegian sub- Norwegian the to due were returns Excess Vekst.
year, net subscriptions in equity funds were 8.74 bil- 8.74 were funds equity in subscriptions net year, Exchange is an outstanding achievement by SKAGEN SKAGEN by achievement outstanding an is Exchange
billion NOK to 58.20 billion NOK. Throughout the the Throughout NOK. billion 58.20 to NOK billion invested in Norwegian shares, beating the Oslo Stock Stock Oslo the beating shares, Norwegian in invested
In 2006, assets under management rose from 39.50 39.50 from rose management under assets 2006, In that the fund only has a little over 50 percent of its assets assets its of percent 50 over little a has only fund the that
the world’s best performing stock exchanges. Considering Considering exchanges. stock performing best world’s the Assets under management management under Assets
Exchange. In 2006, the Oslo Stock Exchange was one of of one was Exchange Stock Oslo the 2006, In Exchange.
more than justified. than more 0.05 percentage points better than the Oslo Stock Stock Oslo the than better points percentage 0.05
investments proved to be be to proved investments highest absolute return, return, absolute highest
for the funds’ equity equity funds’ the for SKAGEN Vekst had the the had Vekst SKAGEN
by 47 percent in 2006 in percent 47 by
formance opportunities opportunities formance With 32.5 percent, percent, 32.5 With
mism regarding the per- the regarding mism
management increased increased management
Nevertheless, the opti- the Nevertheless, percent for the year. year. the for percent
oped world than expected. expected. than world oped absolute return of 24.1 24.1 of return absolute
Assets under under Assets increases in the devel- the in increases mark. The fund had an an had fund The mark.
were more interest rate rate interest more were of its World Index bench- Index World its of
folios. However, there there However, folios. age point outperformance outperformance point age
earnings growth for the companies in the funds’ port- funds’ the in companies the for growth earnings Global had the best relative return, with a 13.3 percent- 13.3 a with return, relative best the had Global
continued good global economic growth with related related with growth economic global good continued of both absolute and relative performance. SKAGEN SKAGEN performance. relative and absolute both of
At the start of 2006, SKAGEN correctly predicted predicted correctly SKAGEN 2006, of start the At For the equity funds, 2006 was a good year in terms terms in year good a was 2006 funds, equity the For
Good returns – both absolute and relative and absolute both – returns Good
return, service and communication. and service return,
providing its clients with the best possible risk-adjusted risk-adjusted possible best the with clients its providing percent for equity funds for 2006. for funds equity for percent
maintained its focus on quality, and the objective of of objective the and quality, on focus its maintained funds was removed in 2006, whereas it will remain at 20 20 at remain will it whereas 2006, in removed was funds
that, during this period of high activity, SKAGEN has has SKAGEN activity, high of period this during that, wealth tax discount on assets invested in fixed income income fixed in invested assets on discount tax wealth
and the launch of a new fund. We are pleased to note note to pleased are We fund. new a of launch the and with related redemptions at the beginning of 2006. The The 2006. of beginning the at redemptions related with
the establishment of new offices, hiring of employees employees of hiring offices, new of establishment the motivated inflow of client capital in December 2005, 2005, December in capital client of inflow motivated
SKAGEN Funds in an extended number of countries, countries, of number extended an in Funds SKAGEN 2005. This drop must be seen in light of the great tax- great the of light in seen be must drop This 2005.
increased assets under management, the marketing of of marketing the management, under assets increased 0.52 billion NOK, a decline from 3.60 billion NOK in in NOK billion 3.60 from decline a NOK, billion 0.52
2006 was a year characterised by growth, through through growth, by characterised year a was 2006 For the fixed income funds, net subscriptions totalled totalled subscriptions net funds, income fixed the For
fund manager, and our fixed income market share increased to over five percent. percent. five over to increased share market income fixed our and manager, fund
cation. During 2006, SKAGEN also solidified its position as Norway’s largest equity equity largest Norway’s as position its solidified also SKAGEN 2006, During cation.
world-class performance together with good client service, follow-up and communi- and follow-up service, client good with together performance world-class
and is on its way into new markets. At the same time SKAGEN continues to deliver deliver to continues SKAGEN time same the At markets. new into way its on is and
has become the leading equity fund manager in Sweden in terms of net subscriptions, subscriptions, net of terms in Sweden in manager fund equity leading the become has
2006 was the year when SKAGEN really became an international company. SKAGEN SKAGEN company. international an became really SKAGEN when year the was 2006
BOARD OF DIRECTORS’ REPORT DIRECTORS’ OF BOARD
– and happy clients happy and –
Continued growth Continued
44 ANNUAL REPORT 2006 • SKAGEN FUNDS • FUNDS SKAGEN • 2006 REPORT ANNUAL BOARD OF DIRECTORS’ REPORT DIRECTORS’ OF BOARD
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The SKAGEN Tellus bond fund was launched on on launched was fund bond Tellus SKAGEN The countries. In addition to receiving subscriptions from from subscriptions receiving to addition In countries.
end of the year, SKAGEN had clients in 75 different different 75 in clients had SKAGEN year, the of end Introduction of a new fund new a of Introduction
the Nordic region that want to become clients. At the the At clients. become to want that region Nordic the
launch in 2003.* 2003.* in launch from individuals and institutions in countries outside outside countries in institutions and individuals from
has beaten its benchmark (ST1X) every year since its its since year every (ST1X) benchmark its beaten has SKAGEN receives an increasing number of inquiries inquiries of number increasing an receives SKAGEN
Høyrente Institusjon returned 2.77 percent. The fund fund The percent. 2.77 returned Institusjon Høyrente New markets New
tically the same as the NIBOR three months. SKAGEN SKAGEN months. three NIBOR the as same the tically
SKAGEN Høyrente achieved a 2.90 percent return, prac- return, percent 2.90 a achieved Høyrente SKAGEN Global Treasury Index 3-5 years). 3-5 Index Treasury Global
and the outperformance of its benchmark (Lehman (Lehman benchmark its of outperformance the and
the fund’s performance. performance. fund’s the ance to date, both the absolute return measured in Euro, Euro, in measured return absolute the both date, to ance
tors, and in light of this we are particularly pleased with with pleased particularly are we this of light in and tors, rate fluctuations. We are happy with the fund’s perform- fund’s the with happy are We fluctuations. rate
past year. 2006 was a difficult year for most bond inves- bond most for year difficult a was 2006 year. past value per unit is sensitive to the NOK/EUR exchange exchange NOK/EUR the to sensitive is unit per value
3.85 percent return in the the in return percent 3.85 MNOK. The net asset asset net The MNOK.
achieved a respectable respectable a achieved amounted to 574 574 to amounted
SKAGEN Avkastning Avkastning SKAGEN at the end of the year year the of end the at
launched in the autumn the in launched
net asset value, which which value, asset net
term ambitions. term showed good growth in in growth good showed
SKAGEN Tellus was was Tellus SKAGEN
with SKAGEN’s long- SKAGEN’s with of existence, the fund fund the existence, of
launched, which is in line line in is which launched, In its first three months months three first its In
The global bond fund fund bond global The
return since they were were they since return
20 percent average annual annual average percent 20 rate. rate.
funds have achieved over over achieved have funds to the NOK exchange exchange NOK the to
launch in 1997 and 2002 respectively. All three equity equity three All respectively. 2002 and 1997 in launch good alternative for foreign investors who are not tied up up tied not are who investors foreign for alternative good
beaten their respective benchmarks every year since their their since year every benchmarks respective their beaten the fund is the Euro, and the fund is therefore also a a also therefore is fund the and Euro, the is fund the
Both SKAGEN Global and SKAGEN Kon-Tiki have have Kon-Tiki SKAGEN and Global SKAGEN Both solely in the Norwegian market. The base currency of of currency base The market. Norwegian the in solely
compared to the Emerging Markets Index’s 22.0 percent. percent. 22.0 Index’s Markets Emerging the to compared clients with excess returns compared with investments investments with compared returns excess with clients
SKAGEN Kon-Tiki achieved a 22.8 percent return, return, percent 22.8 a achieved Kon-Tiki SKAGEN fixed income market, the objective is to provide our our provide to is objective the market, income fixed
SKAGEN’s active investment philosophy to the global global the to philosophy investment active SKAGEN’s
far better than the World Index. Index. World the than better far investing in creditworthy bonds worldwide. By applying applying By worldwide. bonds creditworthy in investing
benchmark, whereas the international sub-portfolio did did sub-portfolio international the whereas benchmark, September 29th, 2006. The fund is a global bond fund fund bond global a is fund The 2006. 29th, September
Johansson, Sigve Erland and Ulrik Scheen. Ulrik and Erland Sigve Johansson,
Extremely happy: The board expects that SKAGEN’s investment philosophy will also provide good returns in the future. From left left From future. the in returns good provide also will philosophy investment SKAGEN’s that expects board The happy: Extremely Barbro Barbro
45 BOARD OF DIRECTORS’ REPORT DIRECTORS’ OF BOARD • ANNUAL REPORT 2006 • SKAGEN FUNDS SKAGEN • 2006 REPORT ANNUAL •
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The establishment of a branch office in Copenhagen Copenhagen in office branch a of establishment The of IPAs and life annuities have opened new opportunities opportunities new opened have annuities life and IPAs of
the Copenhagen office quickly will be fully operational. operational. fully be will quickly office Copenhagen the and the proposal to remove the favourable tax treatment treatment tax favourable the remove to proposal the and
establishment of its office in Stockholm and hopes that that hopes and Stockholm in office its of establishment team. The introduction of mandatory company pensions pensions company mandatory of introduction The team.
pany is benefiting from its experience gained from the the from gained experience its from benefiting is pany 2006 was an exciting year for the SKAGEN pension pension SKAGEN the for year exciting an was 2006
office in Copenhagen in December 2006. The com- The 2006. December in Copenhagen in office 2006 – the year of the pension the of year the – 2006
After the success in Sweden, SKAGEN established an an established SKAGEN Sweden, in success the After
be closer to clients in this region. region. this in clients to closer be Office in Denmark in Office
it was only natural to establish an office in Tønsberg, to to Tønsberg, in office an establish to natural only was it
SKAGEN as a worthy national fund product provider. provider. product fund national worthy a as SKAGEN ents from the counties of Vestfold and Telemark. Thus, Thus, Telemark. and Vestfold of counties the from ents
ing continuously to ensure that Swedes will experience experience will Swedes that ensure to continuously ing growth in assets under management and number of cli- of number and management under assets in growth
increase is planned for next year. SKAGEN is work- is SKAGEN year. next for planned is increase has over a longer period of time experienced very good good very experienced time of period longer a over has
from three to seven full time equivalents, and a further further a and equivalents, time full seven to three from Ålesund, Trondheim, Oslo and Tønsberg. SKAGEN SKAGEN Tønsberg. and Oslo Trondheim, Ålesund,
market effective January 1st, 2006. Staffing was increased increased was Staffing 2006. 1st, January effective market now has six offices in Norway: Stavanger, Bergen, Bergen, Stavanger, Norway: in offices six has now
asset base, Sweden was defined as part of SKAGEN’s home home SKAGEN’s of part as defined was Sweden base, asset The office opened with two employees, and SKAGEN SKAGEN and employees, two with opened office The
Based on successful operations and the steadily growing growing steadily the and operations successful on Based established an office in Tønsberg in December 2006. 2006. December in Tønsberg in office an established
SKAGEN has strengthened its presence in Norway, and and Norway, in presence its strengthened has SKAGEN
one percent market share by the end of 2007. of end the by share market percent one New office in Norway in office New
and is therefore well on the way to achieving its goal of of goal its achieving to way the on well therefore is and
SKAGEN had a 0.8 percent share of the Swedish market, market, Swedish the of share percent 0.8 a had SKAGEN option for an increasing number of Danes. of number increasing an for option
in equity funds in Sweden. At the end of the year, year, the of end the At Sweden. in funds equity in that the funds will appear as an attractive investment investment attractive an as appear will funds the that
highest net subscription subscription net highest the Danish market, and and market, Danish the
2006. SKAGEN has the the has SKAGEN 2006. becomes better known in in known better becomes
ered fantastic results in in results fantastic ered agement as SKAGEN SKAGEN as agement
new European countries European new
the Swedish office deliv- office Swedish the in assets under man- under assets in
operating year in 2005, 2005, in year operating will result in an increase increase an in result will
Marketing approval in in approval Marketing
After a successful first full full first successful a After presence in Copenhagen Copenhagen in presence
We hope that SK AGEN´s AGEN´s SK that hope We Good results in Sweden in results Good
SKAGEN’s English language web pages and market reports. reports. market and pages web language English SKAGEN’s Exchange. Exchange.
Sweden and Denmark is carried out by distributors and via via and distributors by out carried is Denmark and Sweden tain the listing of its funds on the Copenhagen Stock Stock Copenhagen the on funds its of listing the tain
authorisation in Iceland. Marketing outside Norway, Norway, outside Marketing Iceland. in authorisation external partners. In addition, SKAGEN will main- will SKAGEN addition, In partners. external
Luxembourg and the Netherlands, and has applied for for applied has and Netherlands, the and Luxembourg SKAGEN will initially distribute its funds through through funds its distribute initially will SKAGEN
market its funds in Norway, Sweden, Denmark, Finland, Finland, Denmark, Sweden, Norway, in funds its market As was the case with the establishment in Sweden, Sweden, in establishment the with case the was As
countries. At the end of 2006 SKAGEN is authorised to to authorised is SKAGEN 2006 of end the At countries.
for authorisation for cross-border activities in several new new several in activities cross-border for authorisation for Scandinavia as a home market. market. home a as Scandinavia
clients directly, SKAGEN has, during the year, applied applied year, the during has, SKAGEN directly, clients is a step towards the long-term strategy of establishing establishing of strategy long-term the towards step a is
Martin Gjelsvik, Chairman of the board the of Chairman Gjelsvik, Martin Barbro Johansson, elected by the shareholders the by elected Johansson, Barbro
46 ANNUAL REPORT 2006 • SKAGEN FUNDS • FUNDS SKAGEN • 2006 REPORT ANNUAL BOARD OF DIRECTORS’ REPORT DIRECTORS’ OF BOARD
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possible SKAGEN experience – including good service, service, good including – experience SKAGEN possible the best place to work as well as the best place to invest. to place best the as well as work to place best the
all departments to ensure that clients receive the best best the receive clients that ensure to departments all all employees for their contribution to making SKAGEN SKAGEN making to contribution their for employees all
clients. The model also strengthens cooperation between between cooperation strengthens also model The clients. The board would like to take the opportunity to thank thank to opportunity the take to like would board The
ees to work to achieve the highest possible return for the the for return possible highest the achieve to work to ees
model to be on target with respect to stimulating employ- stimulating to respect with target on be to model employment and pay. and employment
vidually. The Board of Directors considers the incentive incentive the considers Directors of Board The vidually. opportunities for both genders with respect to terms of of terms to respect with genders both for opportunities
tive models as motivating, both collectively and indi- and collectively both motivating, as models tive were 37 female and 57 male employees. There are equal equal are There employees. male 57 and female 37 were
employees state that they perceive the company’s incen- company’s the perceive they that state employees male and female employees. At the end of the year, there there year, the of end the At employees. female and male
In the employee and welfare survey, fund management management fund survey, welfare and employee the In grounds and also focuses on achieving a balance between between balance a achieving on focuses also and grounds
SKAGEN recruits employees with many different back- different many with employees recruits SKAGEN
illness of 1.7 percent. percent. 1.7 of illness
This is also reflected by the low rate of absence due to to due absence of rate low the by reflected also is This suited to their own work situation. work own their to suited
to work, with a safe and trusting working environment. environment. working trusting and safe a with work, to a great degree of freedom in choosing training courses courses training choosing in freedom of degree great a
welfare survey, experience SKAGEN as a good place place good a as SKAGEN experience survey, welfare tion of financial advisors. In addition, each employee has has employee each addition, In advisors. financial of tion
to note that the employees, through the employee and and employee the through employees, the that note to Sweden’s leading institutes for certification and educa- and certification for institutes leading Sweden’s
back-up of all functions. The Board of Directors is happy happy is Directors of Board The functions. all of back-up lished a collaboration with Financial Education – one of of one – Education Financial with collaboration a lished
increased capacity, new competencies and formalised formalised and competencies new capacity, increased cluded with an exam. In Sweden, the company has estab- has company the Sweden, In exam. an with cluded
our operations by providing providing by operations our versity credits and are con- are and credits versity
in 2006 in
employees have strengthened strengthened have employees grammes qualify for uni- for qualify grammes
94 employees. The new new The employees. 94 personal finance. All pro- All finance. personal
equity funds in Sweden Sweden in funds equity
the year, the company had had company the year, the economics, finance and and finance economics,
during 2006. At the end of of end the At 2006. during for employees within macro macro within employees for
net subscriptions in in subscriptions net
recruited 35 new employees employees new 35 recruited offer educational programs programs educational offer
increased activity, SKAGEN SKAGEN activity, increased Business Administration to to Administration Business
SKAGEN had the had SKAGEN highest highest
To be able to handle the the handle to able be To School of Economics and and Economics of School
nered with the Norwegian Norwegian the with nered 35 new employees new 35
training programs. Since 2004, SKAGEN has part- has SKAGEN 2004, Since programs. training
manage their pension assets. assets. pension their manage School, which takes place nine times a year, and external external and year, a times nine place takes which School,
rate and retail clients who have chosen to let SKAGEN SKAGEN let to chosen have who clients retail and rate ment, both through internal training at the SKAGEN SKAGEN the at training internal through both ment,
say thank you for the confidence shown by those corpo- those by shown confidence the for you thank say SKAGEN has continued to prioritise employee develop- employee prioritise to continued has SKAGEN
good products also for pension clients, and would like to to like would and clients, pension for also products good
companies. SKAGEN is convinced that the funds are are funds the that convinced is SKAGEN companies. resources, which may characterise such arrangements. arrangements. such characterise may which resources,
to a large extent is constructed to accommodate these these accommodate to constructed is extent large a to tion of own expertise and poor utilisation of employee employee of utilisation poor and expertise own of tion
big life insurance companies, and where the framework framework the where and companies, insurance life big avoiding the danger of unhealthy competition, protec- competition, unhealthy of danger the avoiding
enter a market that until now has been dominated by the the by dominated been has now until that market a enter compensation directly tied to subscription volume. Thus, Thus, volume. subscription to tied directly compensation
for SKAGEN. At the same time, it was a challenge to to challenge a was it time, same the At SKAGEN. for follow-up and communication. No employees have their their have employees No communication. and follow-up
Anne Sophie K. Stensrud, deputy, elected by the shareholders the by elected deputy, Stensrud, K. Sophie Anne Sigve Erland, elected by the unit holders unit the by elected Erland, Sigve
47 BOARD OF DIRECTORS’ REPORT DIRECTORS’ OF BOARD • ANNUAL REPORT 2006 • SKAGEN FUNDS SKAGEN • 2006 REPORT ANNUAL •
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eventful and exciting year on this front too in 2007. in too front this on year exciting and eventful lios’ investments sult of the SKAGEN investment philoso- investment SKAGEN the of sult investments lios’
enjoying SKAGEN events. The board hopes it will be an an be will it hopes board The events. SKAGEN enjoying that may affect the funds. The spread of the equity portfo- equity the of spread The funds. the affect may that
in 101 meetings. It is wonderful to see so many clients clients many so see to wonderful is It meetings. 101 in internal procedures aimed at reducing the risk of errors errors of risk the reducing at aimed procedures internal
for Women” meetings. In total, 8182 clients participated participated clients 8182 total, In meetings. Women” for with throughout the year. SKAGEN has also developed developed also has SKAGEN year. the throughout with
directed at select target audiences, for example the “Saving “Saving the example for audiences, target select at directed portfolios, and these requirements have been complied complied been have requirements these and portfolios,
arranging meetings in more cities, and by arranging events events arranging by and cities, more in meetings arranging for example, industry balance and liquidity within the the within liquidity and balance industry example, for
information meetings more accessible for clients, both by by both clients, for accessible more meetings information In addition, SKAGEN applies internal requirements to, to, requirements internal applies SKAGEN addition, In
During 2006, SKAGEN tried to make its town-hall town-hall its make to tried SKAGEN 2006, During
weighting relative to the statutory requirements. statutory the to relative weighting
back actively to ensure continuous improvement. improvement. continuous ensure to actively back reports showing the portfolio risk of each fund and its its and fund each of risk portfolio the showing reports
SKAGEN in these surveys. SKAGEN will use this feed- this use will SKAGEN surveys. these in SKAGEN exposure is monitored continuously with the aid of daily daily of aid the with continuously monitored is exposure
shown by the high ratings that the clients have given given have clients the that ratings high the by shown the percentage of unlisted securities. The funds’ risk risk funds’ The securities. unlisted of percentage the
all languages. The board is pleased with the confidence confidence the with pleased is board The languages. all to portfolio diversification, ownership limitations and and limitations ownership diversification, portfolio to
and website, where traffic has increased considerably in in considerably increased has traffic where website, and exposure, legislation stipulates requirements with respect respect with requirements stipulates legislation exposure,
SKAGEN carries out surveys for the market reports reports market the for surveys out carries SKAGEN company specific issues. To prevent unreasonable risk risk unreasonable prevent To issues. specific company
two client surveys on behalf of SKAGEN. In addition, addition, In SKAGEN. of behalf on surveys client two rency, interest rate and cyclical developments, as well as as well as developments, cyclical and rate interest rency,
the right direction, every year Synnovate MMI conducts conducts MMI Synnovate year every direction, right the The funds’ risk arises from market movements, cur- movements, market from arises risk funds’ The
their investments. In order to check that we are headed in in headed are we that check to order In investments. their
receive the information they need to get the most out of of out most the get to need they information the receive that the client receives transaction notifications. notifications. transaction receives client the that
is important that all clients feel welcome, and that they they that and welcome, feel clients all that important is the correct number of units for each client, and ensuring ensuring and client, each for units of number correct the
helped the company pass 100,000 clients this year. It It year. this clients 100,000 pass company the helped registry, and is responsible for maintaining registration of of registration maintaining for responsible is and registry,
chosen to invest money with SKAGEN, and thereby thereby and SKAGEN, with money invest to chosen Securities Depository maintains SKAGEN’s unit holder holder unit SKAGEN’s maintains Depository Securities
The board would like to thank all clients who have have who clients all thank to like would board The tions for the funds’ portfolios. The Norwegian Central Central Norwegian The portfolios. funds’ the for tions
responsible for the registration and settlement of transac- of settlement and registration the for responsible Putting the client first client the Putting
Handelsbanken acts as custodian for SKAGEN and is is and SKAGEN for custodian as acts Handelsbanken
clients during the entire building period. building entire the during clients ties of the countries in which the activities are executed. executed. are activities the which in countries the of ties
same building, and SKAGEN will be open to Stavanger Stavanger to open be will SKAGEN and building, same but SKAGEN is also subject to the regulatory authori- regulatory the to subject also is SKAGEN but
be ready by March 2008. The offices will remain in the the in remain will offices The 2008. March by ready be of Norway monitors SKAGEN’s international activities, activities, international SKAGEN’s monitors Norway of
ent service and hospitality. The new office premises will will premises office new The hospitality. and service ent relevant legislation. The Financial Supervisory Authority Authority Supervisory Financial The legislation. relevant
the new offices will enable us to provide even better cli- better even provide to us enable will offices new the the activities to ensure that they are in compliance with with compliance in are they that ensure to activities the
offices will undergo a full refurbishment. We hope that that hope We refurbishment. full a undergo will offices the Financial Supervisory Authority of Norway monitors monitors Norway of Authority Supervisory Financial the
to approximately 2,000 square meters, and the existing existing the and meters, square 2,000 approximately to are subject to the Norwegian Securities Funds Act, and and Act, Funds Securities Norwegian the to subject are
expand the premises from around 800 square meters meters square 800 around from premises the expand as a fund management company. SKAGEN’s activities activities SKAGEN’s company. management fund a as
sion of the number of employees. Work has started to to started has Work employees. of number the of sion by the Financial Supervisory Authority of Norway to act act to Norway of Authority Supervisory Financial the by
have not been able to keep up with the rapid expan- rapid the with up keep to able been not have Fondsforvaltning AS (”SKAGEN”), which is authorised authorised is which (”SKAGEN”), AS Fondsforvaltning
Unfortunately, SKAGEN’s office premises in Stavanger Stavanger in premises office SKAGEN’s Unfortunately, SKAGEN Funds is managed by Stavanger Stavanger by managed is Funds SKAGEN
New office premises office New SKAGEN Funds’ organisation Funds’ SKAGEN
Jan Henrik Hatlem, elected by the unit holders unit the by elected Hatlem, Henrik Jan Tor Dagfinn Veen, elected by the shareholders the by elected Veen, Dagfinn Tor
48 ANNUAL REPORT 2006 • SKAGEN FUNDS • FUNDS SKAGEN • 2006 REPORT ANNUAL BOARD OF DIRECTORS’ REPORT DIRECTORS’ OF BOARD
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Chairman of the board the of Chairman
Martin Gjelsvik Martin Sigve Erland Sigve Veen Dagfinn Tor Johansson Barbro Jan Henrik Hatlem Henrik Jan
*SKAGEN Høyrente and SKAGEN Høyrente Institusjon are only available for sale in the Norwegian market. market. Norwegian the in sale for available only are Institusjon Høyrente SKAGEN and Høyrente *SKAGEN
TOTAL 2 685 3 745 2 303 102 61,7 9 0,046 0,046 9 61,7 102 303 2 745 3 685 2 TOTAL
0 0 3 6, 1 9,035 11 62,0 133 0 0 0 HOLDERS UNIT TO DISTRIBUTION FOR ALLOCATED
8 375 0 -1 03 1 -8,989 -1 -0,3 -31 303 2 745 3 685 2 EQUITY RETAINED TO/FROM TRANSFERRED
DISTRIBUTION DISTRIBUTION
NULPOI NMO 265 4 233 0 6, 9 0,046 9 61,7 102 303 2 745 3 685 2 MNOK IN PROFIT ANNUAL
VEKST GLOBAL KON-TIKI AVKASTNING HØYRENTE RENTE INST. TELLUS TELLUS INST. RENTE HØYRENTE AVKASTNING KON-TIKI GLOBAL VEKST 2006 ACCOUNTS ANNUAL
SKAGEN SKAGEN SKAGEN SKAGEN SKAGEN SKAGEN HØY- SKAGEN HØY- SKAGEN SKAGEN SKAGEN SKAGEN SKAGEN SKAGEN
DISTRIBUTION OF FUNDS’ PROFITS FUNDS’ OF DISTRIBUTION
SKAGEN maintains its investment philosophy and and philosophy investment its maintains SKAGEN and communication. communication. and
risk-adjusted return and the best client service, follow-up follow-up service, client best the and return risk-adjusted
funds have been included in the table below. table the in included been have funds ents in all countries – in the form of the best possible possible best the of form the in – countries all in ents
Act is fulfilled. Proposals for distribution of profits in the the in profits of distribution for Proposals fulfilled. is Act efforts and purposeful work to improve services to cli- to services improve to work purposeful and efforts
pursuant to section 3-3a) of the Norwegian Accounting Accounting Norwegian the of 3-3a) section to pursuant 2007 will be a year filled with continued international international continued with filled year a be will 2007
The board confirms that the going concern requirement requirement concern going the that confirms board The
holders next year as well. well. as year next holders Future prospects Future
ment philosophy to provide a good return for the unit unit the for return good a provide to philosophy ment
and are able to reap the benefits of their investments. investments. their of benefits the reap to able are and The board expects SKAGEN’s application of the invest- the of application SKAGEN’s expects board The
that as many clients as possible achieve their return targets targets return their achieve possible as clients many as that
ing. At the same time, SKAGEN will do its best to ensure ensure to best its do will SKAGEN time, same the At ing. analyses of the market and individual bonds. bonds. individual and market the of analyses
to have such a stable client base focusing on long-term sav- long-term on focusing base client stable a such have to are actively managed based on the portfolio manager’s manager’s portfolio the on based managed actively are
of redemption during the year. SKAGEN is very pleased pleased very is SKAGEN year. the during redemption of managers of the SKAGEN fixed income funds: The funds funds The funds: income fixed SKAGEN the of managers
funds have experienced extraordinary or disruptive levels levels disruptive or extraordinary experienced have funds undervalued companies. The same principle applies to the the to applies principle same The companies. undervalued
In spite of restless markets in May/June 2006, none of the the of none 2006, May/June in markets restless of spite In managers search for unpopular, under-researched and and under-researched unpopular, for search managers
investment philosophy, according to which the portfolio portfolio the which to according philosophy, investment
conditions in the country in which the issuer resides. resides. issuer the which in country the in conditions for clients, in the future as in the past, is to have an active active an have to is past, the in as future the in clients, for
worthiness of individual issuers and the general economic economic general the and issuers individual of worthiness is convinced that the best way of creating excess returns returns excess creating of way best the that convinced is
income funds are also based on an evaluation of the credit- the of evaluation an on based also are funds income familiar with SKAGEN and what it stands for. SKAGEN SKAGEN for. stands it what and SKAGEN with familiar
the liquidity of the security. The investments of the fixed fixed the of investments The security. the of liquidity the expanding into new countries where the players are not not are players the where countries new into expanding
product/market matrix, the company’s debt exposure and and exposure debt company’s the matrix, product/market philosophy and business concept is important when when important is concept business and philosophy
phy, which contains requirements for company valuation, valuation, company for requirements contains which phy, business concept. The communication of the investment investment the of communication The concept. business
Ulrik Scheen, deputy, elected by the shareholders the by elected deputy, Scheen, Ulrik holders unit the by elected deputy, Oftedal, Siv
49 BOARD OF DIRECTORS’ REPORT DIRECTORS’ OF BOARD • ANNUAL REPORT 2006 • SKAGEN FUNDS SKAGEN • 2006 REPORT ANNUAL •
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Chairman of the board the of Chairman
Martin Gjelsvik Martin Jan Henrik Hatlem Henrik Jan Erland Sigve Veen Dagfinn Tor Barbro Johansson Barbro
STAVANGER, 29TH JANUARY 2007 JANUARY 29TH STAVANGER,
6 2 9 5 0 853 523 8 202 59 198 23 061 746 891 209 702 257 696 -46 070 754 862 110 117 785 468 162 1 499 349 632 908 = 31.12. OF AS DEPOSITS BANK
-5 9 -254 1497 5737 377 -577 937 -114 554 -22 999 -553 2 23 -409 355 013 -2 007 -634 973 977 -2 906 983 -4 082 038 -4 269 605 -5 857 -636 600 998 -1 = ALLOCATION TOTAL
NET DISTRIBUTION TO UNIT HOLDERS ------102 974 -25 504 -53 149 -22 755 -7 150 -4 73 -4 150 -7 755 -22 149 -53 504 -25 974 -102 ------HOLDERS UNIT TO DISTRIBUTION NET - - 5
99 -584 -1 011 011 -1 -584 99 -4 900 -3 463 -5 763 -6 079 -18 595 -158 175 -306 415 -243 432 -404 750 -321 397 -341 - EXPENSES OPERATING
-27 888 37 658 -11 896 896 -11 658 37 888 -27 971 113 865 -119 422 -4 584 -49 285 67 223 -78 836 82 705 61 002 135 402 10 +/- ITEMS UNSETTLED IN CHANGE
67 -230 755 -641 314 12 984 -147 276 -564 469 469 -564 276 -147 984 12 314 -641 755 -230 67 6 976 -1 370 -463 663 886 -2 508 599 -4 503 877 -3 542 262 -5 109 -450 605 667 -1 +/- SECURITIES OF PURCHASE NET
APPLICATION APPLICATION
- - -
34 -13 450 180 151 585 900 900 585 151 180 450 -13 34 8 268 1 938 -126 558 242 2 609 329 534 533 3 698 340 4 956 568 4 619 982 5 306 840 732 557 2 = INFLOWS TOTAL
7 6 6 8 1 9 865 8 683 8 695 8 490 12 288 60 064 72 404 104 814 139 381 70 252 305 288 208 298 451 692 174 729 269 +/- TAX) (AFTER RECEIVED DIVIDENDS AND INTEREST
384 -842 1 363 363 1 -842 384 -1 996 -2 587 -4 464 11 706 11 137 382 355 153 1 153 696 017 958 575 799 954 474 1 +/- GAINS REALIZED NET
1 211 542 -24 556 172 298 575 854 854 575 298 172 556 -24 542 211 1 415 -194 690 126 2 088 178 016 081 3 091 882 2 516 664 3 304 573 4 961 -133 049 813 +/- FEES) REDEMPTION AND
NET SUBSCRIPTIONS (INCL. SUBSCRIPTION SUBSCRIPTION (INCL. SUBSCRIPTIONS NET
INFLOWS INFLOWS
22 602 - 012 -6 202 59 225 31 061 746 500 28 702 257 509 198 070 754 243 254 117 785 050 146 499 349 1.1. OF AS DEPOSITS BANK
AHFO TTMN 20 0520 0520 0520 0520 0520 05 2006 2005 2006 2005 2006 2005 2006 2005 2006 2005 2006 2005 2006 STATEMENT FLOW CASH
EEPINPIEPRUI 91 3.2 338 14,7 766 0,1 6,6 0,6 2,6 2,6 0,7 0,7 0,2 101,79 102,62 103,07 103,77 127,96 128,06 300,16 368,46 601,81 746,67 1044,47 1383,81 /31.12 29.12 UNIT PER PRICE REDEMPTION 100,66
21 538 339 23 480 674 3 434 352 3 681 289 5 719 375 375 719 5 289 681 3 352 434 3 674 480 23 339 538 21 984 095 22 656 463 23 949 156 29 164 826 37 679 119 23 546 775 29 023 904 7 920 493 8 ISSUED UNITS OF NUMBER
47 2 235 616 2 512 606 357 579 405 034 577 582 582 577 034 405 579 357 606 512 2 616 235 2 47 4 838 2 301 069 3 786 964 8 816 124 14 096 273 14 201 621 22 439 569 8 196 067 12 CAPITAL EQUITY AND DEBT TOTAL
TOTAL DEBT 311 159 311 942 389 548 360 188 189 073 214 060 64 457 11 128 1 442 92 585 5 119 30 341 1 1 341 30 119 5 585 92 442 1 128 11 457 64 060 214 073 189 188 360 548 389 942 311 159 311 DEBT TOTAL 682 682
TE ET 692 480 278 0 4 0 4 8 1 7 852 3 8 500 61 671 - 000 5 280 37 - 582 8 770 13 383 40 806 49 900 7 768 42 830 14 982 6 DEBT OTHER
118 184 1 011 011 1 184 118 022 1 442 1 546 2 991 3 991 77 485 92 069 180 089 282 450 272 929 274 COMPANY MANAGEMENT - PAYABLE ACCOUNTS
OWED TO BROKERS 29 248 24 662 64 691 172 220 46 782 95 687 - - - 54 282 - 30 157 - - 157 30 - 282 54 - - - 687 95 782 46 220 172 691 64 662 24 248 29 BROKERS TO OWED
BANK WITHDRAWALS ------46 696 ------696 46 ------WITHDRAWALS BANK
DEBT DEBT
TOTAL EQUITY CAPITAL 11 756 036 8 257 497 22 231 653 13 912 908 13 935 743 8 750 726 3 004 853 2 827 319 2 23 2 319 827 2 853 004 3 726 750 8 743 935 13 908 912 13 653 231 22 497 257 8 036 756 11 CAPITAL EQUITY TOTAL 4 174 2 420 021 352 461 374 693 575 900 900 575 693 374 461 352 021 420 2 174 4
UNIT HOLDERS FOR REINVESTMENT 10 - - - - 139 562 109 104 63 156 54 292 10 607 7 269 9 035 035 9 269 7 607 10 292 54 156 63 104 109 562 139 - - - - 10 REINVESTMENT FOR HOLDERS UNIT
ALLOCATED FOR DISTRIBUTION TO TO DISTRIBUTION FOR ALLOCATED
RETAINED EARNINGS 10 8 550 329 5 864 839 9 246 094 5 500 653 5 747 705 3 444 779 10 459 41 471 -2 471 -2 175 -2 471 -2 471 41 459 10 779 444 3 705 747 5 653 500 5 094 246 9 839 864 5 329 550 8 10 EARNINGS RETAINED -1 276 -262 -8 989 989 -8 -262 276 -1
TOTAL PAID-IN EQUITY CAPITAL 3 205 707 2 392 658 12 985 559 8 412 255 8 188 038 5 305 947 2 854 832 2 676 744 744 676 2 832 854 2 947 305 5 038 188 8 255 412 8 559 985 12 658 392 2 707 205 3 CAPITAL EQUITY PAID-IN TOTAL 2 173 489 2 367 904 343 130 367 686 575 854 854 575 686 367 130 343 904 367 2 489 173 2
PREMIUM 10 2 356 315 1 602 256 10 008 013 6 100 287 4 405 422 2 390 252 508 467 467 146 19 655 19 837 -305 837 19 655 19 146 467 467 508 252 390 2 422 405 4 287 100 6 013 008 10 256 602 1 315 356 2 10 PREMIUM -443 3 916 916 3 -443
UNIT CAPITAL AT FACE VALUE 10 849 392 790 402 2 977 546 2 311 968 3 782 616 2 915 695 2 346 366 2 209 598 2 15 2 598 209 2 366 346 2 695 915 2 616 782 3 968 311 2 546 977 2 402 790 392 849 10 VALUE FACE AT CAPITAL UNIT 3 834 2 348 067 343 435 368 129 571 937 937 571 129 368 435 343 067 348 2 834 3
EQUITY CAPITAL CAPITAL EQUITY
OA SES 1 6 9 85949 26121 42306 1 2 1 89476 6 0 28847 3 1 616 235 2 447 838 2 301 069 3 786 964 8 816 124 14 096 273 14 201 621 22 439 569 8 196 067 12 ASSETS TOTAL 2 512 606 357 579 405 034 577 582 582 577 034 405 579 357 606 512 2
BANK DEPOSITS 908 632 349 499 1 162 468 785 117 110 862 754 070 - 257 702 209 891 746 061 23 198 59 202 59 198 23 061 746 891 209 702 257 - 070 754 862 110 117 785 468 162 1 499 349 632 908 DEPOSITS BANK 8 523 523 8
TOTAL OTHER RECEIVABLES 2 556 16 568 181 43 378 67 477 655 30 059 10 22 510 14 1 1 6 6 1 1 14 510 22 10 059 30 655 477 67 378 43 181 568 16 556 2 RECEIVABLES OTHER TOTAL
OTHER RECEIVABLES 750 - - 43 250 579 566 4 - 22 497 ------497 22 - 4 566 579 250 43 - - 750 RECEIVABLES OTHER
ACCOUNTS RECEIVABLE - MANAGEMENT COMPANY 177 136 181 128 150 89 13 10 12 14 1 1 6 6 1 1 14 12 10 13 89 150 128 181 136 177 COMPANY MANAGEMENT - RECEIVABLE ACCOUNTS
ACCOUNTS RECEIVABLE - BROKERS 1 628 16 431 - - 66 748 - 30 033 ------033 30 - 748 66 - - 431 16 628 1 BROKERS - RECEIVABLE ACCOUNTS
ACCRUED INCOME, NOT RECEIVED 32 596 29 770 82 390 71 537 56 949 70 535 ------535 70 949 56 537 71 390 82 770 29 596 32 RECEIVED NOT INCOME, ACCRUED
TAX RECEIVABLE ON DIVIDENDS 8 403 4 655 20 643 15 042 303 838 ------838 303 042 15 643 20 655 4 403 8 DIVIDENDS ON RECEIVABLE TAX
ACCRUED DIVIDENS 24 193 25 115 61 747 56 496 56 646 69 697 ------697 69 646 56 496 56 747 61 115 25 193 24 DIVIDENS ACCRUED
TOTAL SECURITIES PORTFOLIO 11 123 412 8 173 602 21 376 163 13 373 063 13 889 528 8 139 526 3 039 251 2 580 735 735 580 2 251 039 3 526 139 8 528 889 13 063 373 13 163 376 21 602 173 8 412 123 11 PORTFOLIO SECURITIES TOTAL 20325 6 3 3430 4 3 5903 053 569 831 345 380 334 531 766 1 215 003 2
CRE NEET - - - 645 027 559 5 396 5 1 7 572 13 250 1 916 3 354 9 579 15 277 20 445 46 ------8 INTEREST ACCRUED
NELSDCPTLGIS 7 6 36852 5 7 40201 5 0 29357 079 171 244 484 -2 771 41 749 10 507 903 2 001 054 4 021 012 4 579 752 6 562 688 3 768 970 4 8 GAINS CAPITAL UNREALISED -2 188 -1 373 -240 -8 989 989 -8 -240 373 -1 188 -2
FOREIGN SECURITIES AT COST PRICE 3,8 3 008 770 2 152 925 14 623 584 9 361 042 9 382 804 5 026 934 614 660 426 59 426 660 614 934 026 5 804 382 9 042 361 9 584 623 14 925 152 2 770 008 3 3,8 PRICE COST AT SECURITIES FOREIGN 2 - - - - 554 981 981 554 - - - - 2
NORWEGIAN SECURITIES AT COST PRICE 3,8 3 143 875 2 332 115 - - 452 723 209 085 2 367 397 2 092 096 1 990 1 990 1 096 092 2 397 367 2 085 209 723 452 - - 115 332 2 875 143 3 3,8 PRICE COST AT SECURITIES NORWEGIAN 20 1 759 365 331 837 344 821 9 489 489 9 821 344 837 331 365 759 1 20
ASSETS ASSETS
BALANCE SHEET 31.12.06 31.12.05 31.12.06 31.12.05 31.12.06 31.12.05 31.12.06 31.12.05 31.12.06 31.12.05 31.12.06 31.12.05 31.12.05 31.12.06 31.12.05 31.12.06 31.12.05 31.12.06 31.12.05 31.12.06 31.12.05 31.12.06 31.12.05 31.12.06 SHEET BALANCE 31.12.06
TOTAL 2 685 490 2 679 960 3 745 442 3 290 104 2 302 926 2 443 043 102 419 144 443 61 717 51 488 9 474 7 474 9 488 51 717 61 443 144 419 102 043 443 2 926 302 2 104 290 3 442 745 3 960 679 2 490 685 2 TOTAL 543 47 47 543
ALLOCATED FOR DISTRIBUTION TO UNIT HOLDERS ------133 431 109 104 62 014 53 392 10 607 607 10 392 53 014 62 104 109 431 133 ------HOLDERS UNIT TO DISTRIBUTION FOR ALLOCATED 7 269 9 035 035 9 269 7
TRANSFER TO/FROM RETAINED EARNINGS 2 685 490 2 679 960 3 745 442 3 290 104 2 302 926 2 443 043 -31 012 35 339 339 35 012 -31 043 443 2 926 302 2 104 290 3 442 745 3 960 679 2 490 685 2 EARNINGS RETAINED TO/FROM TRANSFER -296 -1 904 -1 133 274 -8 989 989 -8 274 133 -1 904 -1 -296
FOR WHICH PROVISIONS ARE MADE AS FOLLOWS FOLLOWS AS MADE ARE PROVISIONS WHICH FOR
ANNUAL PROFIT/LOSS 2 685 490 2 679 960 3 745 442 3 290 104 2 302 926 2 443 043 102 419 144 443 61 717 51 48 51 717 61 443 144 419 102 043 443 2 926 302 2 104 290 3 442 745 3 960 679 2 490 685 2 PROFIT/LOSS ANNUAL 8 9 474 7 543 47 47 543 7 474 9 8
TAX COST 4 -14 799 -14 896 -46 907 -37 954 -21 392 -15 807 ------807 -15 392 -21 954 -37 907 -46 896 -14 799 -14 4 COST TAX
RESULT BEFORE TAX 2 700 288 2 694 855 3 792 348 3 328 058 2 324 318 2 458 850 102 419 144 443 61 717 51 488 51 717 61 443 144 419 102 850 458 2 318 324 2 058 328 3 348 792 3 855 694 2 288 700 2 TAX BEFORE RESULT 9 474 7 543 47 47 543 7 474 9
ASSETS MANAGEMENT PROFIT/LOSS -341 399 -321 747 -404 432 -243 415 -306 175 -158 595 -18 089 -6 763 -5 463 - 463 -5 763 -6 089 -18 595 -158 175 -306 415 -243 432 -404 747 -321 399 -341 PROFIT/LOSS MANAGEMENT ASSETS 3 900 -499 -584 -1 011 011 -1 -584 -499 900 3
MANAGEMENT FEE - VARIABLE 9 -246 292 -251 771 -227 841 -147 344 -7 201 -33 037 ------037 -33 201 -7 344 -147 841 -227 771 -251 292 -246 9 VARIABLE - FEE MANAGEMENT - -
MANAGEMENT FEE - FIXED 9 -95 105 -69 979 -176 591 -96 071 -298 974 -125 558 -18 089 -6 763 -5 463 -3 900 - 900 -3 463 -5 763 -6 089 -18 558 -125 974 -298 071 -96 591 -176 979 -69 105 -95 9 FIXED - FEE MANAGEMENT 499 -584 -1 011 011 -1 -584 499
AAEETFE N OT COSTS AND FEES MANAGEMENT
3 041 687 3 016 602 4 196 780 3 571 473 2 630 492 2 617 445 120 509 151 206 67 180 55 388 9 973 8 127 127 8 973 9 388 55 180 67 206 151 509 120 445 617 2 492 630 2 473 571 3 780 196 4 602 016 3 687 041 3 5 RESULT PORTFOLIO 058 1
AGIO/DISAGIO 41 185 -23 404 93 741 -20 401 102 431 -44 506 19 576 -9 928 - - - - -373 -373 - - - - 928 -9 576 19 506 -44 431 102 401 -20 741 93 404 -23 185 41 AGIO/DISAGIO
BROKER’S FEE -8 189 -6 021 -25 425 -16 192 -23 355 -13 514 -79 ------79 514 -13 355 -23 192 -16 425 -25 021 -6 189 -8 FEE BROKER’S
OTHER REVENUE 1 759 538 ------538 759 1 REVENUE OTHER
CHANGE UNREALISED PROFIT/LOSS 8 1 282 206 2 027 439 2 740 558 2 629 079 1 150 494 2 149 120 -31 012 35 339 -29 339 35 012 -31 120 149 2 494 150 1 079 629 2 558 740 2 439 027 2 206 282 1 8 PROFIT/LOSS UNREALISED CHANGE 6 -1 904 -1 133 274 -8 989 989 -8 274 133 -1 904 -1 6
PROFIT/LOSS AT REALISATION 1 474 954 799 575 958 017 696 153 1 153 355 382 137 11 706 11 464 -4 587 -2 996 996 -2 587 -4 464 11 706 11 137 382 355 153 1 153 696 017 958 575 799 954 474 1 REALISATION AT PROFIT/LOSS -1 384 -842 1 363 363 1 -842 384 -1
DIVIDENDS RECEIVED 249 573 218 383 445 415 288 350 274 492 143 850 ------850 143 492 274 350 288 415 445 383 218 573 249 RECEIVED DIVIDENDS
INTEREST EARNINGS AND COSTS 200 91 -15 527 -5 515 -26 925 358 120 318 114 332 72 064 60 288 12 490 8 69 8 490 12 288 60 064 72 332 114 318 120 358 925 -26 515 -5 527 -15 91 200 COSTS AND EARNINGS INTEREST 5 9 056 056 9 5
OTOI ANNSADCSS COSTS AND EARNINGS PORTFOLIO
2006 2005 2006 2005 2006 2005 2006 2005 2006 2005 2006 2005 29.09.06-31.12.06 2005 2006 2005 2006 2005 2006 2005 2006 2005 2006 2005 2006 STATEMENT INCOME (ALL FIGURES IN 1,000 NOK) 1,000 IN FIGURES (ALL
NOTES SKAGEN VEKST SKAGEN GLOBAL SKAGEN KON-TIKI SKAGEN AVKASTNING SKAGEN HØYRENTE INSTITUSJON SKAGEN TELLUS SKAGEN INSTITUSJON HØYRENTE SKAGEN AVKASTNING SKAGEN KON-TIKI SKAGEN GLOBAL SKAGEN VEKST SKAGEN NOTES
SKAGEN HØYRENTE SKAGEN
ANNUAL FINANCE STATEMENT 2006 STATEMENT FINANCE ANNUAL
50 ANNUAL REPORT 2006 • SKAGEN FUNDS • FUNDS SKAGEN • 2006 REPORT ANNUAL ANNUAL FINANCE STATEMENT FINANCE ANNUAL
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No subscription or redemption fees. redemption or subscription No
FIXED INCOME FUNDS INCOME FIXED
0.0 % of the above mentioned fees is credited the fund in the case of both subscription and redemption. and subscription both of case the in fund the credited is fees mentioned above the of % 0.0
Redemption fee: 0.0 % of the redemption proceeds redemption the of % 0.0 fee: Redemption
NOK 5,000.000 - 0.0 % of the subscribed amount subscribed the of % 0.0 - 5,000.000 NOK
NOK 1,000.000 - 4.999,999 0.2 % of the subscribed amount subscribed the of % 0.2 4.999,999 - 1,000.000 NOK
NOK 500,000 - 999,999 0.5 % of the subscribed amount subscribed the of % 0.5 999,999 - 500,000 NOK
Subscription fee: NOK 0 - 499,999 0.7 % of the subscribed amount subscribed the of % 0.7 499,999 - 0 NOK fee: Subscription
Equity funds Equity
NOTE 7: SUBSCRIPTION FEE FEE SUBSCRIPTION 7: NOTE
SKAGEN Tellus -0.42 Tellus SKAGEN
SKAGEN Høyrente Institusjon 1.62 Institusjon Høyrente SKAGEN
SKAGEN Høyrente 2.64 Høyrente SKAGEN
SKAGEN Avkastning 1.34 Avkastning SKAGEN
SKAGEN Kon Tiki 0.18 Tiki Kon SKAGEN
SKAGEN Global 0.01 Global SKAGEN
SKAGEN Vekst 0.21 Vekst SKAGEN
the period. The velocity of the funds during 2006 was: 2006 during funds the of velocity The period. the
all purchases and sales of securities divided by 2, with a deduction of net subscriptions to the fund and then divided by the the by divided then and fund the to subscriptions net of deduction a with 2, by divided securities of sales and purchases all average net assets during during assets net average
Velocity is measured by the size of the trading volume adjusted by subscriptions and redemptions of shares. The velocity is cal is velocity The shares. of redemptions and subscriptions by adjusted volume trading the of size the by measured is Velocity culated as the sum of sum the as culated
NOTE 6 : VELOCITY : 6 NOTE
The funds are not charged custodian cost. custodian charged not are funds The
NOTE 5 : CUSTODIAN COST CUSTODIAN : 5 NOTE
Tax costs are associated with withholding tax on foreign dividends. Gain/loss on realisation of equities in securities funds ar funds securities in equities of realisation on Gain/loss dividends. foreign on tax withholding with associated are costs Tax e not taxable/deductible. not e
NOTE 4 : TAX CALCULATION TAX : 4 NOTE
funds are exposed to interest and credit risks and to currency risks in those cases where the funds invest in certificates in f in certificates in invest funds the where cases those in risks currency to and risks credit and interest to exposed are funds oreign currencies. oreign
kroner. Through investment in Norwegian and foreign businesses, the equity funds are exposed to share price and exchange risks. exchange and price share to exposed are funds equity the businesses, foreign and Norwegian in investment Through kroner. The fixed income income fixed The
The balance sheets in the annual financial statement for the funds reflect market value on the last stock market day of the yea the of day market stock last the on value market reflect funds the for statement financial annual the in sheets balance The r expressed in Norwegian Norwegian in expressed r
NOTE 3 : FINANCIAL MARKET RISK MARKET FINANCIAL : 3 NOTE
The funds have not held financial derivatives during the year. the during derivatives financial held not have funds The
NOTE 2 : FINANCIAL DERIVATIVES FINANCIAL : 2 NOTE
of shares. For the fixed income funds, the FIFO principle has been used to calculate realised gain/loss on sale. on gain/loss realised calculate to used been has principle FIFO the funds, income fixed the For shares. of
For the equity funds, the average acquisition value has been used to arrive at the realised gain/loss on the sale sale the on gain/loss realised the at arrive to used been has value acquisition average the funds, equity the For cost: acquisition of Adjustment
entered by entering reinvestments as new units in the fund during the financial year. financial the during fund the in units new as reinvestments entering by entered
the regulation for annual financial statements for securities funds. Distributions from fixed income funds are are funds income fixed from Distributions funds. securities for statements financial annual for regulation the
All distributions to unit holders in fixed income funds are treated as allocations of profits in accordance with with accordance in profits of allocations as treated are funds income fixed in holders unit to distributions All holders: unit to distribution for Allocated
Transaction cost in the form of commission to brokers accrues at the time of the transaction. the of time the at accrues brokers to commission of form the in cost Transaction cost: transaction of Treatment
time of pricing 29.12.2006. pricing of time
Securities and bank deposits/overdrafts in foreign currency are valued at the prevailing exchange rate at the the at rate exchange prevailing the at valued are currency foreign in deposits/overdrafts bank and Securities rates: exchange Currency
internal valuations. internal
Unlisted equities are valued according to the latest trading price, value adjustments made by brokers and and brokers by made adjustments value price, trading latest the to according valued are equities Unlisted
yield curve. curve. yield
Bonds and notes, for which there are no “marketmaker” prices, are at all times valued against the applicable applicable the against valued times all at are prices, “marketmaker” no are there which for notes, and Bonds
Securities are valued at market prices as of 29.12.2006. 29.12.2006. of as prices market at valued are Securities value: fair of Determination
All financial instruments, such as shares, bonds and certificates, are valued at fair value (market value). (market value fair at valued are certificates, and bonds shares, as such instruments, financial All Instruments Financial
NOTE 1 : ACCOUNTING PRINCIPLES ACCOUNTING : 1 NOTE
GENERAL NOTES GENERAL
51 GENERAL NOTES GENERAL • ANNUAL REPORT 2006 • SKAGEN FUNDS SKAGEN • 2006 REPORT ANNUAL •
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IKaon eemnda f 10.06 0,00 01.01.2006: of as determined amount RISK
IKaon eemnda f 10.05 -0,11 01.01.2005: of as determined amount RISK
IKaon eemnda f 10.04 1,80 01.01.2004: of as determined amount RISK
IKaon eemnda f 10.03 3,26 01.01.2003: of as determined amount RISK
NOTE 11. RISK AMOUNTS AMOUNTS RISK 11. NOTE
EQUITY CAPITAL AS OF 31.12.2006 3 782 616 4 405 422 5 747 705 13 935 743 935 13 705 747 5 422 405 4 616 782 3 31.12.2006 OF AS CAPITAL EQUITY
ANNUAL PROFIT/LOSS 2 302 926 2 302 926 926 302 2 926 302 2 PROFIT/LOSS ANNUAL
REDEMPTION OF UNITS -1 882 941 -4 185 663 -6 068 604 604 068 -6 663 185 -4 941 882 -1 UNITS OF REDEMPTION
ISSUE OF UNITS 2 749 862 6 200 832 8 950 694 694 950 8 832 200 6 862 749 2 UNITS OF ISSUE
EQUITY CAPITAL AS OF 1.1.2006 2 915 695 2 390 252 3 444 779 8 750 726 750 8 779 444 3 252 390 2 695 915 2 1.1.2006 OF AS CAPITAL EQUITY
UNIT CAPITAL PREMIUM RETAINED EARNINGS TOTAL TOTAL EARNINGS RETAINED PREMIUM CAPITAL UNIT
RECONCILIATION EQUITY 10. NOTE
be lower than 1 % p.a. of the average net asset value. asset net average the of p.a. % 1 than lower be
p.a. and cannot cannot and p.a. % 4 exceed not does fee management total the that way a such in downwards and upwards limited however, is, It kroner. Norwegian
s Index expressed in in expressed Index s Market Emerging $ Dividends Net Return Total Daily International Capital Stanley Morgan the above/under return the of 1/10 fee:
The management fee constitutes 2.5 % p.a. of average daily net asset value in addition to the variable management variable the to addition in value asset net daily average of p.a. % 2.5 constitutes fee management The
NOTE 9. MANAGEMENT FEE MANAGEMENT 9. NOTE
PAGE 61. PAGE SEE 8. NOTE
NOTES TO SKAGEN Kon-Tiki Kon-Tiki SKAGEN TO NOTES
EQUITY CAPITAL AS OF 31.12.2006 2 977 546 10 008 013 9 246 094 22 231 653 653 231 22 094 246 9 013 008 10 546 977 2 31.12.2006 OF AS CAPITAL EQUITY
ANNUAL PROFIT/LOSS 3 745 441 3 745 441 441 745 3 441 745 3 PROFIT/LOSS ANNUAL
REDEMPTION OF UNITS -826 882 -4 561 023 -5 387 905 905 387 -5 023 561 -4 882 -826 UNITS OF REDEMPTION
ISSUE OF UNITS 1 492 460 8 468 748 9 961 209 209 961 9 748 468 8 460 492 1 UNITS OF ISSUE
EQUITY CAPITAL AS OF 1.1.2006 2 311 968 6 100 287 5 500 653 13 912 909 912 13 653 500 5 287 100 6 968 311 2 1.1.2006 OF AS CAPITAL EQUITY
UNIT CAPITAL PREMIUM RETAINED EARNINGS TOTAL TOTAL EARNINGS RETAINED PREMIUM CAPITAL UNIT
RECONCILIATION EQUITY 10. NOTE
fee: 1/10 of the return above the Morgan Stanley Daily Net $ World Index expressed in Norwegian kroner. Norwegian in expressed Index World $ Net Daily Stanley Morgan the above return the of 1/10 fee:
The management fee constitutes 1 % of average daily net asset value in addition to the variable management variable the to addition in value asset net daily average of % 1 constitutes fee management The
NOTE 9. MANAGEMENT FEE MANAGEMENT 9. NOTE
PAGE 58. PAGE SEE 8. NOTE
NOTES TO SKAGEN Global SKAGEN TO NOTES
IKaon eemnda f0.120: -9,44 01.01.2006: of as determined amount RISK
RISK amount determined as of 01.01.2005: -7,03 -7,03 01.01.2005: of as determined amount RISK
IKaon eemnda f0.120: 3,06 01.01.2004: of as determined amount RISK
IKaon eemnda f0.120: 2,03 01.01.2003: of as determined amount RISK
IKaon eemnda f0.120: 0,51 01.01.2002: of as determined amount RISK
IKaon eemnda f0.120: 3,77 01.01.2001: of as determined amount RISK
IKaon eemnda f0.120: 3,62 01.01.2000: of as determined amount RISK
IKaon eemnda f0.119: 1,26 01.01.1999: of as determined amount RISK
IKaon eemnda f0.119: 1,73 01.01.1998: of as determined amount RISK
IKaon eemnda f0.119: -0,50 01.01.1997: of as determined amount RISK
IKaon eemnda f0.119: 3,28 01.01.1996: of as determined amount RISK
IKaon eemnda f0.119: -0,37 01.01.1995: of as determined amount RISK
IKaon eemnda f0.119: -0,35 01.01.1994: of as determined amount RISK
NOTE 11. RISK AMOUNT AMOUNT RISK 11. NOTE
EQUITY CAPITAL AS OF 31.12.2006 849 392 2 356 315 8 550 329 11 756 036 036 756 11 329 550 8 315 356 2 392 849 31.12.2006 OF AS CAPITAL EQUITY
ANNUAL PROFIT/LOSS 2 685 490 2 685 490 490 685 2 490 685 2 PROFIT/LOSS ANNUAL
REDEMPTION OF UNITS -283 506 -3 054 094 -3 337 599 599 337 -3 094 054 -3 506 -283 UNITS OF REDEMPTION
ISSUE OF UNITS 342 495 3 808 154 4 150 649 649 150 4 154 808 3 495 342 UNITS OF ISSUE
EQUITY CAPITAL AS OF 1.1.2006 790 402 1 602 256 5 864 839 8 257 497 497 257 8 839 864 5 256 602 1 402 790 1.1.2006 OF AS CAPITAL EQUITY
UNIT CAPITAL PREMIUM RETAINED EARNINGS TOTAL TOTAL EARNINGS RETAINED PREMIUM CAPITAL UNIT
RECONCILIATION EQUITY 10. NOTE
. %. 6
The management fee constitutes 1 % of average daily net asset value in addition to the variable management fee: 1/10 of the ret the of 1/10 fee: management variable the to addition in value asset net daily average of % 1 constitutes fee management The urn above above urn
NOTE 9. MANAGEMENT FEE FEE MANAGEMENT 9. NOTE
PAGE 55. PAGE SEE 8. NOTE
NOTES TO SKAGEN Vekst Vekst SKAGEN TO NOTES
52 ANNUAL REPORT 2006 • SKAGEN FUNDS • FUNDS SKAGEN • 2006 REPORT ANNUAL GENERAL NOTES GENERAL
BACK TO CONTENTS TO BACK >>
EQUITY CAPITAL AS OF 31.12.2006 571 937 3 916 -8 989 9 035 575 900 900 575 035 9 989 -8 916 3 937 571 31.12.2006 OF AS CAPITAL EQUITY
ANNUAL PROFIT/LOSS AFTER DISTRIBUTIONS TO UNIT HOLDERS -8 989 -8 989 989 -8 989 -8 HOLDERS UNIT TO DISTRIBUTIONS AFTER PROFIT/LOSS ANNUAL
CORRECTION OF PREVIOUS YEARS REINVESTMENT FOR UNIT HOLDERS - - HOLDERS UNIT FOR REINVESTMENT YEARS PREVIOUS OF CORRECTION
ALLOCATED FOR DISTRIBUTION TO UNIT HOLDERS 9 035 9 035 035 9 035 9 HOLDERS UNIT TO DISTRIBUTION FOR ALLOCATED
REINVESTED FOR UNIT HOLDERS - - HOLDERS UNIT FOR REINVESTED
REDEMPTION OF UNITS -76 869 -781 -77 650 650 -77 -781 869 -76 UNITS OF REDEMPTION
ISSUE OF UNITS 648 806 4 698 653 504 504 653 698 4 806 648 UNITS OF ISSUE
EQUITY CAPITAL AS OF 29.09.2006 ------29.09.2006 OF AS CAPITAL EQUITY
SHARE CAPITAL PREMIUM EARNINGS UNIT HOLDERS TOTAL TOTAL HOLDERS UNIT EARNINGS PREMIUM CAPITAL SHARE
RETAINED DISTRIBUTION TO TO DISTRIBUTION RETAINED
ALLOCATED FOR FOR ALLOCATED
RECONCILIATION EQUITY 10. NOTE
h aaeetfecnttts08%o vrg al e se au.N usrpinfei hre. charged. is fee subscription No value. asset net daily average of % 0.8 constitutes fee management The
NOTE 9. MANAGEMENT FEE MANAGEMENT 9. NOTE
PAGE 68. PAGE SEE 8. NOTE
NOTES TO SKAGEN Tellus SKAGEN TO NOTES
EQUITY CAPITAL AS OF 31.12.2006 343 435 -305 -1 276 10 607 352 461 461 352 607 10 276 -1 -305 435 343 31.12.2006 OF AS CAPITAL EQUITY
ANNUAL PROFIT/LOSS AFTER DISTRIBUTIONS TO UNIT HOLDERS -1 133 -1 133 133 -1 133 -1 HOLDERS UNIT TO DISTRIBUTIONS AFTER PROFIT/LOSS ANNUAL
CORRECTION OF PREVIOUS YEARS REINVESTMENT FOR UNIT HOLDERS 119 119 119 119 HOLDERS UNIT FOR REINVESTMENT YEARS PREVIOUS OF CORRECTION
ALLOCATED FOR DISTRIBUTION TO UNIT HOLDERS 10 607 10 607 607 10 607 10 HOLDERS UNIT TO DISTRIBUTION FOR ALLOCATED
REINVESTED FOR UNIT HOLDERS -7 269 -7 269 269 -7 269 -7 HOLDERS UNIT FOR REINVESTED
REDEMPTION OF UNITS -335 230 1 175 -334 055 055 -334 175 1 230 -335 UNITS OF REDEMPTION
ISSUE OF UNITS 310 536 -1 036 309 500 500 309 036 -1 536 310 UNITS OF ISSUE
EQUITY CAPITAL AS OF 1.1.2006 368 129 -443 -262 7 269 374 693 693 374 269 7 -262 -443 129 368 1.1.2006 OF AS CAPITAL EQUITY
SHARE CAPITAL PREMIUM EARNINGS UNIT HOLDERS TOTAL TOTAL HOLDERS UNIT EARNINGS PREMIUM CAPITAL SHARE
RETAINED DISTRIBUTION TO TO DISTRIBUTION RETAINED
ALLOCATED FOR FOR ALLOCATED
RECONCILIATION EQUITY 10. NOTE
h aaeetfecnttts01 faeaediyntastvle osbcito e scagd charged. is fee subscription No value. asset net daily average of % 0.15 constitutes fee management The
NOTE 9. MANAGEMENT FEE MANAGEMENT 9. NOTE
PAGE 67. PAGE SEE 8. NOTE
NOTES TO SKAGEN Høyrente Institusjon Høyrente SKAGEN TO NOTES
EQUITY CAPITAL AS OF 31.12.2006 2 153 834 19 655 - 2 471 63 156 2 234 174 174 234 2 156 63 471 2 - 655 19 834 153 2 31.12.2006 OF AS CAPITAL EQUITY
NULPOI/OSATRDSRBTOST NTHLES -9 -296 -296 HOLDERS UNIT TO DISTRIBUTIONS AFTER PROFIT/LOSS ANNUAL
ALLOCATED FOR DISTRIBUTION TO UNIT HOLDERS 62 014 62 014 62 014 62 HOLDERS UNIT TO DISTRIBUTION FOR ALLOCATED
ORCINO RVOSYASRIVSMN O NTHLES - HOLDERS UNIT FOR REINVESTMENT YEARS PREVIOUS OF CORRECTION
REINVESTED FOR UNIT HOLDERS -53 149 -53 149 -53 149 -53 HOLDERS UNIT FOR REINVESTED
REDEMPTION OF UNITS -5 996 755 -47 593 -6 044 347 044 -6 593 -47 755 996 -5 UNITS OF REDEMPTION
ISSUE OF UNITS 5 802 521 47 410 5 849 932 932 849 5 410 47 521 802 5 UNITS OF ISSUE
EQUITY CAPITAL AS OF 1.1.2006 2 348 067 19 837 -2 175 54 292 2 420 021 021 420 2 292 54 175 -2 837 19 067 348 2 1.1.2006 OF AS CAPITAL EQUITY
SHARE CAPITAL PREMIUM EARNINGS UNIT HOLDERS TOTAL TOTAL HOLDERS UNIT EARNINGS PREMIUM CAPITAL SHARE
RETAINED DISTRIBUTION TO TO DISTRIBUTION RETAINED
ALLOCATED FOR FOR ALLOCATED
RECONCILIATION EQUITY 10. NOTE
The management fee constitutes 0.25 % of average daily net asset value. No subscription fee is charged. is fee subscription No value. asset net daily average of % 0.25 constitutes fee management The
NOTE 9. MANAGEMENT FEE MANAGEMENT 9. NOTE
PAGE 66. PAGE SEE 8. NOTE
NOTES TO SKAGEN Høyrente SKAGEN TO NOTES
EQUITY CAPITAL AS OF 31.12.2006 2 346 366 508 467 10 459 139 562 3 004 853 004 3 562 139 459 10 467 508 366 346 2 31.12.2006 OF AS CAPITAL EQUITY
ANNUAL PROFIT/LOSS AFTER DISTRIBUTIONS TO UNIT HOLDERS -31 022 -31 012 012 -31 022 -31 HOLDERS UNIT TO DISTRIBUTIONS AFTER PROFIT/LOSS ANNUAL
ORCINO RVOSYASRIVSMN O NTHLES - HOLDERS UNIT FOR REINVESTMENT YEARS PREVIOUS OF CORRECTION
ALLOCATED FOR DISTRIBUTION TO UNIT HOLDERS 133 431 133 431 133 431 133 HOLDERS UNIT TO DISTRIBUTION FOR ALLOCATED
REINVESTED FOR UNIT HOLDERS -102 974 -102 974 -102 974 -102 HOLDERS UNIT FOR REINVESTED
REDEMPTION OF UNITS -3 059 489 -666 468 -3 725 957 725 -3 468 -666 489 059 -3 UNITS OF REDEMPTION
ISSUE OF UNITS 3 196 256 707 778 3 904 034 904 3 778 707 256 196 3 UNITS OF ISSUE
EQUITY CAPITAL AS OF 1.1.2006 2 209 598 467 146 41 471 109 104 2 827 319 827 2 104 109 471 41 146 467 598 209 2 1.1.2006 OF AS CAPITAL EQUITY
SHARE CAPITAL PREMIUM EARNINGS UNIT HOLDERS TOTAL TOTAL HOLDERS UNIT EARNINGS PREMIUM CAPITAL SHARE
RETAINED DISTRIBUTION TO TO DISTRIBUTION RETAINED
ALLOCATED FOR FOR ALLOCATED
RECONCILIATION EQUITY 10. NOTE
h aaeetfecnttts05%o vrg al e se au.N usrpinfei hre. charged. is fee subscription No value. asset net daily average of % 0.5 constitutes fee management The
NOTE 9. MANAGEMENT FEE FEE MANAGEMENT 9. NOTE
PAGE 64. PAGE SEE 8. NOTE
NOTES TO SKAGEN Avkastning SKAGEN TO NOTES
53 GENERAL NOTES GENERAL • ANNUAL REPORT 2006 • SKAGEN FUNDS SKAGEN • 2006 REPORT ANNUAL •
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* THE FUND WAS ESTABLISHED DURING THE YEAR THE DURING ESTABLISHED WAS FUND THE *
% OF NET ASSETS UNDER MANAGEMENT UNDER ASSETS NET OF %
9% CORE EU CORE
PERIPHERY EU PERIPHERY 6%
EMEA
1%
8 % 8 NORTH AMERICA NORTH
4 % 4 SOUTH AMERICA SOUTH
13 % 13 SIA EXCL. JAPAN EXCL. SIA A
1 % 1 JAPAN
52 % 52 NORWAY
GEOGRAPHICAL DISTRIBUTION GEOGRAPHICAL RETURN ANNUAL
% OF NET ASSETS UNDER MANAGEMENT UNDER ASSETS NET OF %
31 % 31 ENERGY
12 % 12 RAW MATERIALS RAW
18 % 18 INDUSTRIALS
5 % 5 CONSUMER DISCRETIONARY CONSUMER
6 % 6 CONSUMER STAPLES CONSUMER
4 % 4 HEALTH CARE HEALTH
8 % 8 FINANCIALS
OSLO STOCK EXCHANGE STOCK OSLO
8 % 8 INFORMATION TECHNOLOGY INFORMATION
20% ANNUAL GEOMETRIC RETURN GEOMETRIC ANNUAL 20%
3 % 3 TELECOM
SKAGEN Vekst SKAGEN
1 % 1 UTILITIES
HISTORIC PRICE DEVELOPMENT PRICE HISTORIC SECTOR DISTRIBUTION SECTOR
** See note on page 62. Management fee: change in reporting reporting in change fee: Management 62. page on note See **
* MNOK *
1994 19,13 7,13 125 1 760 1,58 760 1 125 7,13 19,13 1994
1995 14,72 11,60 200 4 149 2,95 149 4 200 11,60 14,72 1995
1996 39,09 32,03 472 6 873 4,01 873 6 472 32,03 39,09 1996
1997 29,23 31,60 895 13 036 3,74 036 13 895 31,60 29,23 1997
1998 -6,47 -26,65 988 19 568 2,46 568 19 988 -26,65 -6,47 1998
99 69 4,4 6 3 6 7,31 167 38 361 2 45,54 76,98 1999
companies, industries and regions. regions. and industries companies, 00 22 -,8 5 4 1 2,18 619 44 650 2 -1,68 -2,25 2000
which gives it the freedom to invest in a number of of number a in invest to freedom the it gives which 01 13 -65 254 623 1,27 283 46 594 2 -16,57 -1,33 2001
and global companies. The fund has a broad mandate mandate broad a has fund The companies. global and 02 2,1 3,9 4 4 5 0,86 153 46 146 2 -31,09 -21,91 2002
equity fund with a good balance between Norwegian Norwegian between balance good a with fund equity 03 62 4,0 3 4 3 5,82 334 47 238 4 48,40 66,25 2003
SKAGEN Vekst is suitable for investors who want an an want who investors for suitable is Vekst SKAGEN 04 17 3,5 1 5 8 3,45 781 51 712 5 38,45 31,75 2004
05 81 4,7 5 6 9 4,50 792 61 254 8 40,47 48,15 2005
06 24 3,3 168 457 3,36 547 74 698 11 32,43 32,49 2006 under priced. under
INVESTMENT % INDEX VALUE* UNIT HOLDERS TER %** TER HOLDERS UNIT VALUE* INDEX % INVESTMENT Exchange. We look for companies that are solid but but solid are that companies for look We Exchange.
YEAR RETURN ON BENCHMARK- NET ASSET- NUMBER OF OF NUMBER ASSET- NET BENCHMARK- ON RETURN YEAR
dustries or markets not represented on the Oslo Stock Stock Oslo the on represented not markets or dustries
may partake in the value created by companies in in- in companies by created value the in partake may
Kristian Falnes Kristian Manager Portfolio
invested outside of Norway. This means that the fund fund the that means This Norway. of outside invested
Yes fund UCITS
addition, significant parts of the fund’s assets are are assets fund’s the of parts significant addition,
Oslo Stock Exchange Benchmark Index Index Benchmark Exchange Stock Oslo Benchmark
trends in Norwegian and international business. In In business. international and Norwegian in trends
Finland and Luxembourg and Finland
of the individual companies as well as of the main main the of as well as companies individual the of
Authorised for marketing in in marketing for Authorised Norway, Sweden, Denmark, the Netherlands, Netherlands, the Denmark, Sweden, Norway,
Reduced risk is achieved through thorough research research thorough through achieved is risk Reduced
Tax schemes schemes Tax Unit Link Unit
Minimum subscription amount amount subscription Minimum One-time subscription NOK 1,000 NOK subscription One-time
funds in terms of returns relative to risk. risk. to relative returns of terms in funds
of the return exceeding 6 6 exceeding return the of 10 + p.a 1.0 fee Management p.a. % % %
SKAGEN Vekst among the best performing equity equity performing best the among Vekst SKAGEN
Redemption fee fee Redemption 0 0 %
cial magazine Dine Penger and by Morningstar place place Morningstar by and Penger Dine magazine cial
Subscription fee fee Subscription 0.0 – 0.7 0.7 – 0.0 (dependent on amount) on (dependent %
market. Studies carried out by the Norwegian finan- Norwegian the by out carried Studies market.
Number of unit holders holders unit of Number 74 547 74
Norway. The rest will be invested in the global equity equity global the in invested be will rest The Norway.
Net asset value value asset Net 11 698 MNOK 698 11
Vekst equity fund will at all times be invested in in invested be times all at will fund equity Vekst
S&P qualitative rating rating qualitative S&P AAA
A minimum of 50 percent of the assets of the SKAGEN SKAGEN the of assets the of percent 50 of minimum A
Average annual return return annual Average 22.24 22.24 %
Return since start start since Return 1283.81 1283.81 %
audited
Fund start date date start Fund 1st December 1993 December 1st This information is not part of the official accounts and has not been been not has and accounts official the of part not is information This
SKAGEN Vekst SKAGEN
54 ANNUAL REPORT 2006 • SKAGEN FUNDS • FUNDS SKAGEN • 2006 REPORT ANNUAL SKAGEN Vekst SKAGEN
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CONTINUED NEXT PAGE NEXT CONTINUED
TOTAL CONSUMER DISCRETIONARY 411 115 113 575 578 668 164 463 555 4,92 % % 4,92 555 463 164 668 578 575 113 115 411 DISCRETIONARY CONSUMER TOTAL
% 0,94 583 231 26 561 829 109 977 597 83 ITEMS* MINOR
OGSHNESO JFTSIED 000 87278 1100 NK 3 0 0 1 7 9 02 25 UNOTERT % 2,59 % 0,29 292 477 15 000 200 34 NOK 140,00 1 708 722 18 000 30 SJØFATRSTIDENDE OG HANDELS NORGES
MAHINDRA & MAHINDRA LTD GDR 400 000 13 797 277 20,70 USD 51 653 150 37 855 873 0,44 % 0,16 % LONDON INT. INT. LONDON % 0,16 % 0,44 873 855 37 150 653 51 USD 20,70 277 797 13 000 400 GDR LTD MAHINDRA & MAHINDRA
EXPERT 600 000 28 751 960 100,00 NOK 60 000 000 31 248 040 0,51 % 1,81 % OSLO BØRS OSLO % 1,81 % 0,51 040 248 31 000 000 60 NOK 100,00 960 751 28 000 600 EXPERT
HURTIGRUTEN GROUP 1 018 490 58 052 312 59,00 NOK 60 090 910 2 038 598 0,51 % 5,13 % OSLO BØRS OSLO % 5,13 % 0,51 598 038 2 910 090 60 NOK 59,00 312 052 58 490 018 1 GROUP HURTIGRUTEN
OKWGNPE. 6 0 3 6 8 65 ER 7 5 0 3 9 1 06 01 FRANKFURT % 0,15 % 0,64 315 590 37 202 354 74 EUR 56,55 887 763 36 000 160 PREF. VOLKSWAGEN
GEETOISPE. 4000 82193 3 0,0 R 69196 1 7 6 07 02 KOREA % 0,29 % 0,74 066 270 -11 926 991 86 KRW 400,00 32 993 261 98 000 400 PREF. ELECTRONICS LG
S NENTOA L 42867 31698 19 GP 9 5 1 2 9 2 08 02 LONDON % 0,23 % 0,84 921 291 25 919 458 98 GBP 1,91 998 166 73 697 208 4 PLC INTERNATIONAL DSG
CONSUMER DISCRETIONARY DISCRETIONARY CONSUMER
TOTAL INDUSTRIALS 1 162 157 200 2 059 456 250 897 299 050 17,61 % % 17,61 050 299 897 250 456 059 2 200 157 162 1 INDUSTRIALS TOTAL
% 1,09 164 311 49 029 017 127 864 705 77 ITEMS* MINOR
UUAAEETI 5 0 1 3 2 4,0 P 93913 6 6 02 01 TOKYO % 0,11 % 0,25 760 966 9 183 399 29 JPY 748,00 422 432 19 000 750 ELECTRIC FURUKAWA
RMD 24000 26691 15 ER 3 8 0 83724 ,6% ,1% MILANO % 1,71 % 0,26 214 337 8 205 984 30 EUR 1,57 991 646 22 000 400 2 PREMUDA
SOLVANG 1 053 000 17 400 942 31,20 NOK 32 853 600 15 452 658 0,28 % 4,27 % OSLO BØRS OSLO % 4,27 % 0,28 658 452 15 600 853 32 NOK 31,20 942 400 17 000 053 1 SOLVANG
GOLDEN OCEAN GROUP 3 000 000 13 152 377 11,15 NOK 33 450 000 20 297 623 0,29 % 1,11 % OSLO BØRS OSLO % 1,11 % 0,29 623 297 20 000 450 33 NOK 11,15 377 152 13 000 000 3 GROUP OCEAN GOLDEN
LMX 4 3 58237 60 NK 3 6 0 2 1 5 03 91 UNOTERT % 9,14 % 0,30 857 811 29 204 664 35 NOK 6,00 347 852 5 034 944 5 GLAMOX
IDMITR 5 5 2 0 7 ,0 U 59586 13486 ,1% ,5% FRANKFURT % 1,05 % 0,31 886 384 11 856 985 35 EUR 9,60 970 600 24 150 456 GILDEMEISTER
OENARC.LD 1150 38653 3 5,0 R 60977 21324 ,1% ,1% KOREA % 0,21 % 0,31 234 153 22 797 049 36 KRW 450,00 35 563 896 13 500 151 LTD. CO. AIR KOREAN
NORWEGIAN AIR SHUTTLE 405 800 22 936 151 93,00 NOK 37 739 400 14 803 249 0,32 % 2,06 % OSLO BØRS OSLO % 2,06 % 0,32 249 803 14 400 739 37 NOK 93,00 151 936 22 800 405 SHUTTLE AIR NORWEGIAN
ODFJELL A 336 700 13 893 280 115,00 NOK 38 720 500 24 827 220 0,33 % 0,51 % OSLO BØRS OSLO % 0,51 % 0,33 220 827 24 500 720 38 NOK 115,00 280 893 13 700 336 A ODFJELL
AKER A 100 010 18 131 645 401,00 NOK 40 104 010 21 972 365 0,34 % 0,14 % OSLO BØRS OSLO % 0,14 % 0,34 365 972 21 010 104 40 NOK 401,00 645 131 18 010 100 A AKER
ELBR 2500 56956 135 SK 4 2 2 53455 ,5% ,4% STOCKHOLM % 0,34 % 0,35 555 304 5 121 924 40 SEK 163,50 566 619 35 000 275 B TELLEBORG
BERGESEN WORLDWIDE GAS 500 000 44 313 325 82,50 NOK 41 250 000 -3 063 325 0,35 % 0,39 % OSLO BØRS OSLO % 0,39 % 0,35 325 063 -3 000 250 41 NOK 82,50 325 313 44 000 500 GAS WORLDWIDE BERGESEN
ARON EV RNPR .. 9 0 1 0 4 95 NK 4 1 0 2 0 6 03 49 UNOTERT % 4,97 % 0,38 860 309 25 000 014 44 NOK 29,50 140 704 18 000 492 1 B.V. TRANSPORT HEAVY FAIRMOUNT
AJNSIPN 2100 59697 2 0,0 R 44042 85345 ,8% ,5% KOREA % 0,35 % 0,38 495 563 28 422 480 44 KRW 400,00 26 927 916 15 010 251 SHIPPING HANJIN
KVERNELAND 694 874 56 484 204 75,50 NOK 52 462 987 -4 021 217 0,45 % 4,50 % OSLO BØRS OSLO % 4,50 % 0,45 217 021 -4 987 462 52 NOK 75,50 204 484 56 874 694 KVERNELAND
AKVA GROUP 1 632 000 57 120 000 35,00 NOK 57 120 000 0 0,49 % 9,48 % OSLO BØRS OSLO % 9,48 % 0,49 0 000 120 57 NOK 35,00 000 120 57 000 632 1 GROUP AKVA
I.M. SKAUGEN 1 726 664 21 448 497 44,00 NOK 75 973 216 54 524 719 0,65 % 6,35 % OSLO BØRS OSLO % 6,35 % 0,65 719 524 54 216 973 75 NOK 44,00 497 448 21 664 726 1 SKAUGEN I.M.
I RNEKM 0 0 4 3 9 18 ER 7 4 5 3 1 6 06 01 AMSTERDAM % 0,11 % 0,67 763 414 36 254 545 78 EUR 31,86 491 130 42 000 300 KLM FRANCE AIR
IMN G 2 0 6 2 9 54 ER 8 8 4 1 5 5 06 00 FRANKFURT % 0,01 % 0,68 551 857 12 543 086 80 EUR 75,43 992 228 67 200 129 AG SIEMENS
GCR 4000 92305 2 5,0 R 01530 0 1 06 02 SEOL % 0,23 % 0,69 314 902 340 145 80 KRW 850,00 29 025 243 79 000 400 CORP LG
OE IE 5 0 2 5 1 9500 KW 8 6 0 5 0 8 07 25 KOREA % 2,50 % 0,71 788 306 58 207 065 83 KRW 500,00 49 419 758 24 000 250 LINE KOREA
TOMRA SYSTEMS 2 323 000 67 405 392 43,00 NOK 99 889 000 32 483 608 0,85 % 1,34 % OSLO BØRS OSLO % 1,34 % 0,85 608 483 32 000 889 99 NOK 43,00 392 405 67 000 323 2 SYSTEMS TOMRA
YNA EV NUTIS 6 5 5 5 8 16000 KW 180948 37514 ,8% ,1% KOREA % 0,21 % 1,18 194 715 83 478 069 138 KRW 000,00 126 283 354 54 250 163 INDUSTRIES HEAVY HYUNDAI
KONGSBERG GRUPPEN 941 350 82 599 224 175,00 NOK 164 736 250 82 137 026 1,41 % 3,14 % OSLO BØRS OSLO % 3,14 % 1,41 026 137 82 250 736 164 NOK 175,00 224 599 82 350 941 GRUPPEN KONGSBERG
WILH WILHELMSEN LTD A 1 000 000 57 718 538 237,50 NOK 237 500 000 179 781 462 2,03 % 2,71 % OSLO BØRS OSLO % 2,71 % 2,03 462 781 179 000 500 237 NOK 237,50 538 718 57 000 000 1 A LTD WILHELMSEN WILH
STOLT-NIELSEN 1 378 150 187 462 623 191,00 NOK 263 226 650 75 764 027 2,25 % 2,09 % OSLO BØRS OSLO % 2,09 % 2,25 027 764 75 650 226 263 NOK 191,00 623 462 187 150 378 1 STOLT-NIELSEN
INDUSTRIALS INDUSTRIALS
TOTAL RAW MATERIALS 753 883 275 1 345 109 792 591 226 517 11,50 % % 11,50 517 226 591 792 109 345 1 275 883 753 MATERIALS RAW TOTAL
MINOR ITEMS* 70 873 668 78 233 738 7 360 070 0,67 % % 0,67 070 360 7 738 233 78 668 873 70 ITEMS* MINOR
HEXAGON COMPOSITES 3 000 000 5 911 239 9,90 NOK 29 700 000 23 788 761 0,25 % 2,38 % OSLO BØRS OSLO % 2,38 % 0,25 761 788 23 000 700 29 NOK 9,90 239 911 5 000 000 3 COMPOSITES HEXAGON
LA 1165 74589 5,9 A 07333 3 4 02 00 TORONTO % 0,03 % 0,26 444 237 3 303 703 30 CAD 56,39 859 465 27 625 101 ALCAN
HINDALCO INDUSTRIES 1 500 000 28 263 541 4,03 USD 37 710 543 9 447 002 0,32 % 0,13 % LONDON INT. INT. LONDON % 0,13 % 0,32 002 447 9 543 710 37 USD 4,03 541 263 28 000 500 1 INDUSTRIES HINDALCO
CREW GOLD CORPORATION 3 250 157 22 371 308 13,60 NOK 44 202 135 21 830 827 0,38 % 1,67 % OSLO BØRS OSLO % 1,67 % 0,38 827 830 21 135 202 44 NOK 13,60 308 371 22 157 250 3 CORPORATION GOLD CREW
PXSLE IE 5790 35020 1,9 S 93589 1 7 4 04 08 AMEX % 0,87 % 0,42 342 174 -14 889 395 49 USD 15,59 230 570 63 900 507 MINES SILVER APEX
RP EIOSBD V 5 0 1 1 5 99 MN 5 8 9 3 6 4 04 00 MEXICO % 0,09 % 0,44 942 766 38 896 786 51 MXN 39,95 954 019 13 000 250 2 CV DE SAB MEXICO GRUPO
AZITR 000 07739 9,0 U 55474 48735 ,6% ,3% FRANKFURT % 0,13 % 0,56 375 827 54 774 544 65 EUR 99,70 399 717 10 000 80 SALZGITTER
VOTORANTIM CELLULOSE ADR 578 500 44 864 905 19,77 USD 71 347 130 26 482 226 0,61 % 0,59 % NEW YORK NEW % 0,59 % 0,61 226 482 26 130 347 71 USD 19,77 905 864 44 500 578 ADR CELLULOSE VOTORANTIM
OE IC 2 0 1 6 7 8700 KW 8 1 9 6 4 2 07 06 KOREA % 0,66 % 0,71 423 546 64 495 813 82 KRW 700,00 98 072 267 18 000 125 ZINC KOREA
UOUP 4000 83588 2,0 U 82420 99842 ,4% ,2% HELSINKI % 0,22 % 0,84 412 918 29 290 284 98 EUR 29,90 878 365 68 000 400 OUTOKUMPO
OIE 11900 20169 170 SK 183878 5 1 4 16 04 STOCKHOLM % 0,40 % 1,61 149 317 156 778 328 188 SEK 177,00 629 011 32 000 169 1 BOLIDEN
YARA INTERNATIONAL 1 600 019 77 603 469 141,75 NOK 226 802 693 149 199 225 1,94 % 0,51 % OSLO BØRS OSLO % 0,51 % 1,94 225 199 149 693 802 226 NOK 141,75 469 603 77 019 600 1 INTERNATIONAL YARA
NORSKE SKOGINDUSTRIER 2 700 057 270 577 123 107,50 NOK 290 256 127 19 679 005 2,48 % 1,42 % OSLO BØRS OSLO % 1,42 % 2,48 005 679 19 127 256 290 NOK 107,50 123 577 270 057 700 2 SKOGINDUSTRIER NORSKE
RAW MATERIALS MATERIALS RAW
TOTAL ENERGY 1 667 491 988 3 658 248 227 1 990 756 239 31,27 % % 31,27 239 756 990 1 227 248 658 3 988 491 667 1 ENERGY TOTAL
IO TM* 9 5 5 274038 75339 ,6% % 2,46 349 543 87 398 400 287 050 857 199 ITEMS* MINOR
CIESBE 25000 50000 1,0 O 00000 0 0 02 54 UNOTERT % 5,49 % 0,26 000 000 5 000 000 30 NOK 12,00 000 000 25 000 500 2 SUBSEA ACTIVE
P 5 2 3 4 7 ,7 B 17485 5 6 02 00 LONDON % 0,00 % 0,27 366 556 1 845 704 31 GBP 5,67 479 148 30 321 457 BP
OIO FSOE 6 0 3 9 2 63 UD 3 7 3 -1 9 03 11 NASDAQ % 1,11 % 0,31 592 -519 737 673 36 USD 16,33 329 193 37 000 360 OFFSHORE HORIZON
EOA 3 0 2 0 0 00 NK 3 6 0 1 6 0 03 57 UNOTERT % 5,72 % 0,32 000 760 10 000 660 37 NOK 70,00 000 900 26 000 538 REMORA
P FSOELF 33340 14665 1,0 O 03080 10585 ,5% ,2% UNOTERT % 7,02 % 0,35 875 075 -1 800 360 40 NOK 12,00 675 436 41 400 363 3 LIFT OFFSHORE MPU
BP ADR 100 000 42 933 984 67,20 USD 41 921 397 -1 012 586 0,36 % 0,00 % NEW YORK NEW % 0,00 % 0,36 586 012 -1 397 921 41 USD 67,20 984 933 42 000 100 ADR BP
SEADRILL 500 000 21 644 708 105,25 NOK 52 625 000 30 980 292 0,45 % 0,13 % OSLO BØRS OSLO % 0,13 % 0,45 292 980 30 000 625 52 NOK 105,25 708 644 21 000 500 SEADRILL
ODIM 317 600 10 748 330 178,00 NOK 56 532 800 45 784 470 0,48 % 2,90 % OSLO BØRS OSLO % 2,90 % 0,48 470 784 45 800 532 56 NOK 178,00 330 748 10 600 317 ODIM
REVUS ENERGY 1 049 100 52 551 675 54,00 NOK 56 651 400 4 099 725 0,48 % 3,18 % OSLO BØRS OSLO % 3,18 % 0,48 725 099 4 400 651 56 NOK 54,00 675 551 52 100 049 1 ENERGY REVUS
SCORPION OFFSHORE 800 000 42 822 700 72,00 NOK 57 600 000 14 777 300 0,49 % 1,63 % OSLO BØRS OSLO % 1,63 % 0,49 300 777 14 000 600 57 NOK 72,00 700 822 42 000 800 OFFSHORE SCORPION
I EEAED EPYIU 5 0 1 6 8 6,0 U 79974 19527 ,8% ,9% PARIS % 0,19 % 0,58 217 955 51 704 919 67 EUR 165,30 486 964 15 000 50 GEOPHYSIQUE DE GENERALE CIE
EIDESVIK OFFSHORE ASA 1 223 800 59 212 291 62,50 NOK 76 487 500 17 275 209 0,65 % 4,06 % OSLO BØRS OSLO % 4,06 % 0,65 209 275 17 500 487 76 NOK 62,50 291 212 59 800 223 1 ASA OFFSHORE EIDESVIK
FARSTAD SHIPPING 600 000 34 943 354 135,50 NOK 81 300 000 46 356 646 0,70 % 1,54 % OSLO BØRS OSLO % 1,54 % 0,70 646 356 46 000 300 81 NOK 135,50 354 943 34 000 600 SHIPPING FARSTAD
NABORS INDUSTRIES 500 000 101 888 731 29,99 USD 93 543 356 -8 345 374 0,80 % 0,17 % NEW YORK NEW % 0,17 % 0,80 374 345 -8 356 543 93 USD 29,99 731 888 101 000 500 INDUSTRIES NABORS
DEEP OCEAN 3 299 000 62 049 049 29,50 NOK 97 320 500 35 271 451 0,83 % 3,74 % OSLO BØRS OSLO % 3,74 % 0,83 451 271 35 500 320 97 NOK 29,50 049 049 62 000 299 3 OCEAN DEEP
VERITAS DGC 200 000 60 602 040 85,02 USD 106 076 107 45 474 067 0,91 % 3,44 % NEW YORK NEW % 3,44 % 0,91 067 474 45 107 076 106 USD 85,02 040 602 60 000 200 DGC VERITAS
TGS NOPEC GEOPHYSICAL CO 889 100 15 738 548 129,00 NOK 114 693 900 98 955 352 0,98 % 0,84 % OSLO BØRS OSLO % 0,84 % 0,98 352 955 98 900 693 114 NOK 129,00 548 738 15 100 889 CO GEOPHYSICAL NOPEC TGS
TRANSOCEAN 316 500 48 627 365 80,95 USD 159 829 538 111 202 173 1,37 % 0,11 % NEW YORK NEW % 0,11 % 1,37 173 202 111 538 829 159 USD 80,95 365 627 48 500 316 TRANSOCEAN
PETROBRAS PREF. ADR 364 500 51 975 303 92,43 USD 210 173 019 158 197 716 1,80 % 0,08 % NEW YORK NEW % 0,08 % 1,80 716 197 158 019 173 210 USD 92,43 303 975 51 500 364 ADR PREF. PETROBRAS
GANGER ROLF 1 016 300 57 011 371 239,00 NOK 242 895 700 185 884 329 2,08 % 2,80 % OSLO BØRS OSLO % 2,80 % 2,08 329 884 185 700 895 242 NOK 239,00 371 011 57 300 016 1 ROLF GANGER
DOF 3 899 400 43 853 023 68,00 NOK 265 159 200 221 306 177 2,27 % 5,08 % OSLO BØRS OSLO % 5,08 % 2,27 177 306 221 200 159 265 NOK 68,00 023 853 43 400 899 3 DOF
SOLSTAD OFFSHORE 2 035 000 94 440 345 137,00 NOK 278 795 000 184 354 655 2,38 % 5,38 % OSLO BØRS OSLO % 5,38 % 2,38 655 354 184 000 795 278 NOK 137,00 345 440 94 000 035 2 OFFSHORE SOLSTAD
PRIDE INTERNATIONAL 1 575 000 242 854 399 30,32 USD 297 903 930 55 049 531 2,55 % 0,96 % NEW YORK NEW % 0,96 % 2,55 531 049 55 930 903 297 USD 30,32 399 854 242 000 575 1 INTERNATIONAL PRIDE
BONHEUR 1 300 000 72 349 763 268,00 NOK 348 400 000 276 050 237 2,98 % 3,19 % OSLO BØRS OSLO % 3,19 % 2,98 237 050 276 000 400 348 NOK 268,00 763 349 72 000 300 1 BONHEUR
NORSK HYDRO 2 525 170 174 744 989 193,50 NOK 488 620 395 313 875 406 4,18 % 0,20 % OSLO BØRS OSLO % 0,20 % 4,18 406 875 313 395 620 488 NOK 193,50 989 744 174 170 525 2 HYDRO NORSK
ENERGY ENERGY
SECURITY NUMBER VALUE NOK PRICE CURRENCY VALUE NOK GAIN/LOSS FUND COMPANY EXCHANGE EXCHANGE COMPANY FUND GAIN/LOSS NOK VALUE CURRENCY PRICE NOK VALUE NUMBER SECURITY
CUSTO MRE- AKT NELSD HR F HR N STOCK- IN SHARE OF SHARE UNREALISED MARKET- MARKET- ACQUISITION
SKAGEN Vekst SKAGEN Note 8. Securities portfolio as of 31st December 2006 December 31st of as portfolio Securities 8. Note
55 SKAGEN Vekst SKAGEN • ANNUAL REPORT 2006 • SKAGEN FUNDS SKAGEN • 2006 REPORT ANNUAL •
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** FOR LIQUIDITY IN THE PORTFOLIO AS OF 31.12.2006, PLEASE REFER TO BALANCE SHEET. SHEET. BALANCE TO REFER PLEASE 31.12.2006, OF AS PORTFOLIO THE IN LIQUIDITY FOR **
* PLEASE CONTACT STAVANGER FONDSFORVALTNING A/S FOR A LIST OF COMPANIES INCLUDED IN THIS POST – WILL BE SENT BY EMAIL. BY SENT BE WILL – POST THIS IN INCLUDED COMPANIES OF LIST A FOR A/S FONDSFORVALTNING STAVANGER CONTACT PLEASE *
AEPIEA F2.20 1383,8079 29.12.06 OF AS PRICE BASE
TOTAL EQUITY PORTFOLIO** 6 152 644 878 11 123 412 400 4 970 767 521 95,09 % % 95,09 521 767 970 4 400 412 123 11 878 644 152 6 PORTFOLIO** EQUITY TOTAL
TOTAL UTILITIES 91 760 109 158 117 664 66 357 555 1,35 % % 1,35 555 357 66 664 117 158 109 760 91 UTILITIES TOTAL
% 0,01 750 108 250 689 1 500 580 1 ITEMS* MINOR
ELETROBRAS PREFERED 1 117 400 90 179 609 47,90 BRL 156 428 414 66 248 805 1,34 % 0,00 % SAO PAULO SAO % 0,00 % 1,34 805 248 66 414 428 156 BRL 47,90 609 179 90 400 117 1 PREFERED ELETROBRAS
UTILITIES UTILITIES
TOTAL TELECOM 137 160 158 321 039 118 183 878 960 2,74 % % 2,74 960 878 183 118 039 321 158 160 137 TELECOM TOTAL
IO TM* 4 0 90671 3 2 00 % 0,08 525 234 1 731 076 9 206 842 7 ITEMS* MINOR
OA CESTLCMUIAIN 0 0 88380 43 UD 5 4 0 4 8 7 04 04 SINGAPORE % 0,42 % 0,46 577 785 44 407 649 53 USD 4,30 830 863 8 000 000 2 TELECOMMUNICATION ACCESS TOTAL
ODS OITLFNA 16990 67681 3,0 E 80214 12533 ,0% ,6% UNOTERT % 5,26 % 0,50 303 235 11 144 022 58 SEK 37,50 841 786 46 940 699 1 AB MOBILTELEFON NORDISK
INDOSAT TBK,ADR 283 400 47 503 139 37,93 USD 67 057 779 19 554 640 0,57 % 0,26 % NEW YORK NEW % 0,26 % 0,57 640 554 19 779 057 67 USD 37,93 139 503 47 400 283 TBK,ADR INDOSAT
TELEKOMUNIK INDONESIA ADR 469 700 26 164 142 45,47 USD 133 233 057 107 068 914 1,14 % 0,09 % NEW YORK NEW % 0,09 % 1,14 914 068 107 057 233 133 USD 45,47 142 164 26 700 469 ADR INDONESIA TELEKOMUNIK
TELECOM TELECOM
TOTAL INFORMATION TECHNOLOGY 702 969 884 948 454 358 245 484 474 8,11 % % 8,11 474 484 245 358 454 948 884 969 702 TECHNOLOGY INFORMATION TOTAL
IO TM* 9 8 1 210823 37243 ,0% % 1,80 493 722 13 203 008 211 710 285 197 ITEMS* MINOR
Q-FREE 1 700 000 26 778 847 18,80 NOK 31 960 000 5 181 153 0,27 % 3,26 % OSLO BØRS OSLO % 3,26 % 0,27 153 181 5 000 960 31 NOK 18,80 847 778 26 000 700 1 Q-FREE
VMETRO 1 500 000 35 637 987 25,40 NOK 38 100 000 2 462 013 0,33 % 6,53 % OSLO BØRS OSLO % 6,53 % 0,33 013 462 2 000 100 38 NOK 25,40 987 637 35 000 500 1 VMETRO
EET 4000 10780 1,0 U 84900 73120 ,3% ,0% HELSINKI % 2,30 % 0,33 260 371 17 070 459 38 EUR 11,70 810 087 21 000 400 TELESTE
LBLI ON 26000 26891 1,0 O 81000 54109 ,1% ,0% UNOTERT % 4,90 % 0,41 069 461 35 000 100 48 NOK 18,50 931 638 12 000 600 2 SOUND IP GLOBAL
FAST SEARCH AND TRANSFER 3 250 000 62 635 625 15,60 NOK 50 700 000 -11 935 625 0,43 % 0,98 % OSLO BØRS OSLO % 0,98 % 0,43 625 935 -11 000 700 50 NOK 15,60 625 635 62 000 250 3 TRANSFER AND SEARCH FAST
ELTEK ASA 1 000 062 103 999 124 61,75 NOK 61 753 828 -42 245 295 0,53 % 2,03 % OSLO BØRS OSLO % 2,03 % 0,53 295 245 -42 828 753 61 NOK 61,75 124 999 103 062 000 1 ASA ELTEK
YCR 2 0 8 0 9 1200 JY 7 5 3 -61970 ,0% ,6% TOKYO % 0,06 % 0,60 760 149 -16 038 558 70 JPY 220,00 11 798 707 86 000 120 KYOCERA
TANDBERG TELEVISION 975 000 40 440 697 78,20 NOK 76 245 000 35 804 303 0,65 % 1,21 % OSLO BØRS OSLO % 1,21 % 0,65 303 804 35 000 245 76 NOK 78,20 697 440 40 000 975 TELEVISION TANDBERG
SAMSUNG ELECTRONICS GDR 60 000 23 654 760 329,00 USD 123 144 105 99 489 345 1,05 % 0,02 % LONDON INT. INT. LONDON % 0,02 % 1,05 345 489 99 105 144 123 USD 329,00 760 654 23 000 60 GDR ELECTRONICS SAMSUNG
SAMSUNG ELECTRONICS PREF. GDR 124 492 92 102 593 255,50 USD 198 426 114 106 323 521 1,70 % 0,27 % LONDON INT. LONDON % 0,27 % 1,70 521 323 106 114 426 198 USD 255,50 593 102 92 492 124 GDR PREF. ELECTRONICS SAMSUNG
INFORMATION TECHNOLOGY TECHNOLOGY INFORMATION
TOTAL FINANCIALS 469 293 203 936 018 090 466 724 886 8,00 % % 8,00 886 724 466 090 018 936 203 293 469 FINANCIALS TOTAL
IO TM* 28271 5 1 3 7 5 1 13 % 1,35 513 553 75 235 416 158 721 862 82 ITEMS* MINOR
IMAREX NOS 344 000 26 956 178 88,00 NOK 30 272 000 3 315 822 0,26 % 3,33 % OSLO BØRS OSLO % 3,33 % 0,26 822 315 3 000 272 30 NOK 88,00 178 956 26 000 344 NOS IMAREX
I RU Y 7000 17291 60 ER 3 7 4 57009 ,2% ,6% HELSINKI % 1,76 % 0,32 009 760 5 940 472 37 EUR 6,08 931 712 31 000 750 OYJ GROUP FIM
ABG SUNDAL COLLIER ASA 3 000 000 15 364 399 13,00 NOK 39 000 000 23 635 601 0,33 % 1,04 % OSLO BØRS OSLO % 1,04 % 0,33 601 635 23 000 000 39 NOK 13,00 399 364 15 000 000 3 ASA COLLIER SUNDAL ABG
INVKIVA,SRB 6 0 1 7 0 1,5 E 96365 83316 ,0% ,1% STOCKHOLM % 0,31 % 0,60 166 303 58 675 673 69 SEK 115,25 509 370 11 200 664 B SER AB, INV KINNEVIK
AAC ODN HC MR 30000 82993 55 TY 7 9 7 2 1 2 06 01 ISTANBUL % 0,17 % 0,63 821 013 25 774 293 73 TRY 5,55 953 279 48 000 000 3 OMER) (HACI HOLDING SABANCI
OENRISRNE 9513 14464 1 0,0 R 80122 65658 ,7% ,2% KOREA % 0,82 % 0,67 578 526 66 232 011 78 KRW 700,00 12 654 484 11 123 915 REINSURANCE KOREAN
NORGANI HOTELS 1 150 000 66 282 480 73,50 NOK 84 525 000 18 242 520 0,72 % 2,91 % OSLO BØRS OSLO % 2,91 % 0,72 520 242 18 000 525 84 NOK 73,50 480 282 66 000 150 1 HOTELS NORGANI
AELBN 0 0 5 5 4 52 ER 8 5 1 3 9 7 07 07 FRANKFURT % 0,70 % 0,74 273 698 31 013 952 86 EUR 35,27 740 253 55 000 300 BANK AAREAL
ANVRREKESCEUG 3 0 8 6 8 50 ER 154121 77774 ,7% ,6% FRANKFURT % 0,36 % 1,07 734 737 37 221 401 125 EUR 35,08 487 663 87 000 435 RUECKVERSICHERUNG HANNOVER
OLAV THON EIENDOMSSELSKAP 180 000 32 062 153 850,00 NOK 153 000 000 120 937 847 1,31 % 1,68 % OSLO BØRS OSLO % 1,68 % 1,31 847 937 120 000 000 153 NOK 850,00 153 062 32 000 180 EIENDOMSSELSKAP THON OLAV
FINANCIALS FINANCIALS
TOTAL HEALTH CARE 308 282 782 431 662 566 123 379 784 3,69 % % 3,69 784 379 123 566 662 431 782 282 308 CARE HEALTH TOTAL
IO TM* 8 2 3 209374 0 5 8 24 % 2,49 787 158 106 724 983 290 937 824 184 ITEMS* MINOR
AXIS-SHIELD 1 048 400 26 529 182 34,50 NOK 36 169 800 9 640 618 0,31 % 2,16 % OSLO BØRS OSLO % 2,16 % 0,31 618 640 9 800 169 36 NOK 34,50 182 529 26 400 048 1 AXIS-SHIELD
PHOTOCURE 725 000 31 106 367 54,25 NOK 39 331 250 8 224 883 0,34 % 3,29 % OSLO BØRS OSLO % 3,29 % 0,34 883 224 8 250 331 39 NOK 54,25 367 106 31 000 725 PHOTOCURE
PFIZER 400 000 65 822 296 26,12 USD 65 177 792 -644 504 0,56 % 0,01 % NEW YORK NEW % 0,01 % 0,56 504 -644 792 177 65 USD 26,12 296 822 65 000 400 PFIZER
HEALTH CARE CARE HEALTH
TOTAL CONSUMER STAPLES 448 531 166 689 727 666 241 196 500 5,90 % % 5,90 500 196 241 666 727 689 166 531 448 STAPLES CONSUMER TOTAL
IO TM* 6 4 5 147797 11184 ,1% % 1,41 834 171 -1 917 777 164 752 949 165 ITEMS* MINOR
ANBR 6665 23301 40 GP 3 2 7 89519 ,7% ,4% LONDON % 0,04 % 0,27 109 935 8 170 328 31 GBP 4,09 061 393 22 625 626 SAINSBURY J
PAN FISH ASA 6 500 000 35 187 004 5,70 NOK 37 050 000 1 862 996 0,32 % 0,19 % OSLO BØRS OSLO % 0,19 % 0,32 996 862 1 000 050 37 NOK 5,70 004 187 35 000 500 6 ASA FISH PAN
MARINE FARMS 2 400 000 25 156 500 18,20 NOK 43 680 000 18 523 500 0,37 % 7,20 % OSLO BØRS OSLO % 7,20 % 0,37 500 523 18 000 680 43 NOK 18,20 500 156 25 000 400 2 FARMS MARINE
CHIQUITA BRANDS INTL 724 800 76 605 346 16,05 USD 72 570 430 -4 034 916 0,62 % 1,72 % NEW YORK NEW % 1,72 % 0,62 916 034 -4 430 570 72 USD 16,05 346 605 76 800 724 INTL BRANDS CHIQUITA
URC ODN 3000 10372 4,9 U 2 2 4 6 7 9 10 08 AMSTERDAM % 0,89 % 1,08 397 777 64 148 821 125 EUR 49,39 752 043 61 000 310 HOLDING NUTRECO
LERØY SEAFOOD GROUP 1 950 000 62 195 752 110,00 NOK 214 500 000 152 304 248 1,83 % 4,56 % OSLO BØRS OSLO % 4,56 % 1,83 248 304 152 000 500 214 NOK 110,00 752 195 62 000 950 1 GROUP SEAFOOD LERØY
CONSUMER STAPLES STAPLES CONSUMER
SECURITY NUMBER VALUE NOK PRICE CURRENCY VALUE NOK GAIN/LOSS FUND COMPANY EXCHANGE EXCHANGE COMPANY FUND GAIN/LOSS NOK VALUE CURRENCY PRICE NOK VALUE NUMBER SECURITY
AQIIIN AKT MRE- URAIE SAEO SAEI STOCK- IN SHARE OF SHARE UNREALISED MARKET- MARKET- ACQUISITION
Continuation Continuation SKAGEN Vekst SKAGEN Note 8. Securities portfolio as of 31st December 2006 December 31st of as portfolio Securities 8. Note
56 ANNUAL REPORT 2006 • SKAGEN FUNDS • FUNDS SKAGEN • 2006 REPORT ANNUAL SKAGEN Vekst SKAGEN
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* THE FUND WAS ESTABLISHED DURING THE YEAR THE DURING ESTABLISHED WAS FUND THE *
% OF NET ASSETS UNDER MANAGEMENT UNDER ASSETS NET OF %
0 % 5% 10 % 15% 20 % 25 % 25 % 20 15% % 10 5% % 0
18.3% CORE EU CORE
16.3% PERIPHERY EU PERIPHERY
6.1% EMEA
18.2% NORTH AMERICA NORTH
9.9% SOUTH AMERICA SOUTH
20.6% SIA EXCL. JAPAN EXCL. SIA A
7.3 % 7.3 JAPAN
ANNUAL RETURN ANNUAL GEOGRAPHICAL DISTRIBUTION GEOGRAPHICAL
9819 0020 0220 0420 2006 2005 2004 2003 2002 2001 2000 1999 1998
% OF NET ASSETS UNDER MANAGEMENT UNDER ASSETS NET OF %
70 0%1 0 25% 20% % 15 % 10 % 5 % 0
ENERGY 8.4 % 8.4
100
RAW MATERIALS RAW 10.4 % 10.4
INDUSTRIALS 18.7 % 18.7
NAV SKAGENGlobal
CONSUMER DISCRETIONARY CONSUMER 5.9 % 5.9
CONSUMER STAPLES CONSUMER 7.0 % 7.0
200
HEALTH CARE HEALTH 5.1 % 5.1
FINANCIALS 19.1 % 19.1
INFORMATION TECHNOLOGY INFORMATION 10.2 % 10.2
TELECOM 8.9 % 8.9 400
UTILITIES 2.8 % 2.8 20% ANNUAL GEOMETRIC RETURN GEOMETRIC ANNUAL 20%
SKAGEN Global SKAGEN
WORLD INDEX (NOK) INDEX WORLD
800
HISTORIC PRICE DEVELOPMENT PRICE HISTORIC SECTOR DISTRIBUTION SECTOR
*** See note on page 62. Management fee: change in reporting reporting in change fee: Management 62. page on note See ***
** THE FUND WAS ESTABLISHED DURING THE YEAR THE DURING ESTABLISHED WAS FUND THE **
* MNOK *
1997** -3,08 -8,21 32 24 3,28 24 32 -8,21 -3,08 1997**
1998 47,16 26,52 237 1 017 2,24 017 1 237 26,52 47,16 1998
1999 113,41 30,73 2 092 9 983 5,68 983 9 092 2 30,73 113,41 1999
2000 -4,65 -5,12 2 863 22 093 1,74 093 22 863 2 -5,12 -4,65 2000
risk with a cultivated global fund. global cultivated a with risk
2001 -4,24 -16,07 2 660 24 767 2,25 767 24 660 2 -16,07 -4,24 2001
but who wish to strengthen their portfolio and reduce reduce and portfolio their strengthen to wish who but
2002 -23,20 -37,97 2 176 26 465 3,06 465 26 176 2 -37,97 -23,20 2002
have exposure towards the Norwegian equity market, market, equity Norwegian the towards exposure have
2003 62,82 28,04 4 387 28 772 3,49 772 28 387 4 28,04 62,82 2003
dustry. The fund is also suitable for those who already already who those for suitable also is fund The dustry.
2004 24,55 4,46 6 958 35 971 2,88 971 35 958 6 4,46 24,55 2004
is therefore diversified both geographically and by in- by and geographically both diversified therefore is
2005 39,21 21,93 13 828 52 715 2,42 715 52 828 13 21,93 39,21 2005
equity fund which invests over the whole world and and world whole the over invests which fund equity
2006 24,07 10,79 22 113 77 148 2,20 148 77 113 22 10,79 24,07 2006
SKAGEN Global is suitable for investors who want an an want who investors for suitable is Global SKAGEN
YEAR INVESTMENT % INDEX VALUE* UNIT HOLDERS TER %*** TER HOLDERS UNIT VALUE* INDEX % INVESTMENT YEAR
RETURN ON BENCHMARK NET ASSET NUMBER OF OF NUMBER ASSET NET BENCHMARK ON RETURN
ty funds on the market. the on funds ty
“Dine Penger”, to be one of the very best global equi- global best very the of one be to Penger”, “Dine
Filip Weintraub Filip Manager Portfolio
Poor’s, as well as magazines such as the Norwegian Norwegian the as such magazines as well as Poor’s,
Yes fund UCITS
such as the international rating agency Standard & & Standard agency rating international the as such
MSCI Daily Net $ World Index measured in NOK in measured Index World $ Net Daily MSCI Benchmark
SKAGEN Global is regarded by independent agencies, agencies, independent by regarded is Global SKAGEN
Finland and Luxembourg and Finland
Authorised for marketing in in marketing for Authorised Norway, Sweden, Denmark , the Netherlands, Netherlands, the , Denmark Sweden, Norway,
lanced with the performance opportunities. performance the with lanced
Tax schemes schemes Tax Unit Link Unit
same time company risk and market risk must be ba- be must risk market and risk company time same
Minimum subscription amount amount subscription Minimum One-time subscription NOK 1,000 NOK subscription One-time
quality and have low valuations is absolute. At the the At absolute. is valuations low have and quality
exceeding the return of the benchmark the of return the exceeding
The requirement that the companies must be of high high of be must companies the that requirement The
of the return return the of 10 + p.a fee Management 1.0 1.0 % %
fund seeks to maintain a balanced industry exposure. exposure. industry balanced a maintain to seeks fund
Redemption fee fee Redemption 0 0 %
undervalued, under-researched and unpopular. The The unpopular. and under-researched undervalued,
Subscription fee fee Subscription 0.0 – 0.7 0.7 – 0.0 (dependent on amount) on (dependent %
adjusted return by investing in companies which are are which companies in investing by return adjusted
Number of unit holders holders unit of Number 77 148 77
to provide unit holders with the best possible risk risk possible best the with holders unit provide to
Net asset value value asset Net 22 113 MNOK 113 22
worldwide – except Norway. The fund’s objective is is objective fund’s The Norway. except – worldwide
S&P qualitative rating rating qualitative S&P AAA
The SKAGEN Global equity fund invests in shares shares in invests fund equity Global SKAGEN The
Average annual return return annual Average 23.85 23.85 %
Return since start start since Return 646.67 646.67 %
audited.
Fund start date date start Fund 8th August 1997 August 8th This information is not part of the official accounts and has not been been not has and accounts official the of part not is information This
SKAGEN Global SKAGEN
57 SKAGEN Global SKAGEN • ANNUAL REPORT 2006 • SKAGEN FUNDS SKAGEN • 2006 REPORT ANNUAL •
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CONTINUED NEXT PAGE NEXT CONTINUED
TOTAL CONSUMER STAPLES 1 005 666 049 1 545 181 241 539 515 191 6,99 % % 6,99 191 515 539 241 181 545 1 049 666 005 1 STAPLES CONSUMER TOTAL
RAISIO PLC 2 247 300 42 527 608 1,79 EUR 33 078 391 -9 449 217 0,15 % 1,72 % HELSINKI HELSINKI % 1,72 % 0,15 217 449 -9 391 078 33 EUR 1,79 608 527 42 300 247 2 PLC RAISIO
ANNTHAT 1 5 2 3 2 43 ER 4 3 0 1 9 8 ,9% ,3% HELSINKI % 3,33 % 0,19 984 795 18 906 031 42 EUR 24,30 921 235 23 350 210 TEHTAAT LANNEN
OA NBE / 9 0 3 8 8 4,0 K 52840 36973 03 14 KØBENHAVN % 1,44 % 0,34 713 639 43 400 228 75 DKK 740,00 687 588 31 000 92 A/S UNIBREW ROYAL
NTDIT NEPIE 1604 00267 400 DK 9 4 3 7 6 8 ,1% ,2% KØBENHAVN % 3,42 % 0,41 384 361 71 032 444 91 DKK 470,00 647 082 20 074 176 ENTERPRISES INTL UNITED
IKMNCR 15370 98595 1470 JY 149177 51583 05 07 TOKYO % 0,77 % 0,52 833 145 35 737 951 114 JPY 437,00 1 905 805 79 700 523 1 CORP KIKKOMAN
AIIA ODN S 8 6 8 5 1 60 TY 107575 01819 06 22 ISTANBUL % 2,22 % 0,64 149 108 60 765 765 140 TRY 36,00 616 657 80 269 888 AS HOLDING YAZICILAR
TOLL BROTHERS 1 019 670 181 919 037 32,23 USD 204 988 976 23 069 939 0,93 % 0,66 % NEW YORK NEW % 0,66 % 0,93 939 069 23 976 988 204 USD 32,23 037 919 181 670 019 1 BROTHERS TOLL
URC ODN 7993 6 6 7 93 ER 283600 2 7 6 ,0% ,4% AMSTERDAM % 2,04 % 1,30 960 170 127 030 336 288 EUR 49,39 070 165 161 953 709 HOLDING NUTRECO
ANBR 1 9 0 346359 40 GP 543604 6 7 4 ,1% ,5% LONDON. % 0,65 % 2,51 445 672 169 004 356 554 GBP 4,09 559 683 384 904 093 11 SAINSBURY J
CONSUMER STAPLES STAPLES CONSUMER
TOTAL CONSUMER DISCRETIONARY 899 527 035 1 314 037 653 414 510 618 5,94 % % 5,94 618 510 414 653 037 314 1 035 527 899 DISCRETIONARY CONSUMER TOTAL
SSANGYONG MOTOR CO. 523 900 21 485 846 5 260,00 KRW 18 545 955 -2 939 891 0,08 % 0,43 % KOREA KOREA % 0,43 % 0,08 891 939 -2 955 545 18 KRW 260,00 5 846 485 21 900 523 CO. MOTOR SSANGYONG
SNYN OO OPNT 6500 48083 5200 KW 2 1 7 65606 01 05 KOREA % 0,50 % 0,10 056 596 6 879 416 21 KRW 260,00 5 823 820 14 000 605 CO.P-NOTE MOTOR SSANGYONG
AUISHTL 887 17856 6900 HF 2 4 6 1 1 8 ,0% ,9% BUDAPEST % 1,19 % 0,10 984 815 10 560 544 22 HUF 950,00 6 576 728 11 897 98 HOTELS DANUBIUS
LI & FUNG 2 359 500 27 264 077 24,20 HKD 45 908 320 18 644 242 0,21 % 0,07 % HONG KONG HONG % 0,07 % 0,21 242 644 18 320 908 45 HKD 24,20 077 264 27 500 359 2 FUNG & LI
OKWGN 8 0 3 1 9 58 ER 6 9 5 2 7 6 ,8% ,3% FRANKFURT % 0,03 % 0,28 463 973 26 655 092 61 EUR 85,89 193 119 34 500 86 VOLKSWAGEN
MAHINDRA & MAHINDRA LTD GDR 585 000 20 732 338 20,70 USD 75 533 006 54 800 668 0,34 % 0,24 % LONDON INT. INT. LONDON % 0,24 % 0,34 668 800 54 006 533 75 USD 20,70 338 732 20 000 585 GDR LTD MAHINDRA & MAHINDRA
REGIS CORP 319 989 78 168 362 39,54 USD 78 919 127 750 765 0,36 % 0,71 % NEW YORK NEW % 0,71 % 0,36 765 750 127 919 78 USD 39,54 362 168 78 989 319 CORP REGIS
SHANGRI-LA ASIA 6 138 207 50 433 194 20,05 HKD 98 949 124 48 515 931 0,45 % 0,24 % HONG KONG HONG % 0,24 % 0,45 931 515 48 124 949 98 HKD 20,05 194 433 50 207 138 6 ASIA SHANGRI-LA
OKWGNPE. 9 0 6 5 8 65 ER 149072 74698 06 02 FRANKFURT % 0,28 % 0,61 998 446 67 782 900 134 EUR 56,57 784 453 67 000 290 PREF. VOLKSWAGEN
U G 0 7 189877 1,9 U 3 3 6 -1 8 ,3% ,4% FRANKFURT % 0,44 % 0,63 583 -616 164 332 138 EUR 15,19 747 948 138 478 107 1 AG TUI
NEEDN ES&MDA 02198 6 5 8 ,1 U 5 1 1 8 5 3 ,4% ,5% LONDON % 1,35 % 1,14 833 055 86 514 510 252 EUR 3,01 681 454 166 938 201 10 MEDIA & NEWS INDEPENDENT
MCGRAW-HILL COMPANIES INC 861 198 267 917 415 68,02 USD 365 384 566 97 467 151 1,65 % 0,24 % NEW YORK NEW % 0,24 % 1,65 151 467 97 566 384 365 USD 68,02 415 917 267 198 861 INC COMPANIES MCGRAW-HILL
CONSUMER DISCRETIONARY DISCRETIONARY CONSUMER
TOTAL INDUSTRIALS 2 971 952 337 4 134 379 804 1 162 427 467 18,70 % % 18,70 467 427 162 1 804 379 134 4 337 952 971 2 INDUSTRIALS TOTAL
I RNEWRAT 8 2 0 81 ER 1 1 3 1 1 3 ,6% ,2% AMSTERDAM % 0,42 % 0,06 639 514 12 639 514 12 EUR 8,19 0 825 185 WARRANT FRANCE AIR
AHIDNY ASA 3 0 3 6 9 2,0 P 73980 65691 01 14 TOKYO % 1,44 % 0,12 991 586 -6 800 379 27 JPY 820,00 791 966 33 000 636 KAISHA DENGYO TAIHEI
UTR 1510 35596 370 SK 3 3 4 1 2 3 ,6% ,1% STOCKHOLM % 0,51 % 0,16 236 624 12 142 130 36 SEK 317,00 906 505 23 110 125 MUNTERS
OE IE 7 0 2 5 3 9500 KW 5 3 5 2 7 2 ,6% ,1% KOREA % 1,71 % 0,26 820 778 27 652 132 57 KRW 500,00 49 832 353 29 500 171 LINE KOREA
UUAAEETI 8 0 6 5 8 4,0 P 82660 1 7 0 ,6% ,1% TOKYO % 0,21 % 0,26 309 477 -11 680 276 58 JPY 748,00 989 753 69 000 484 1 ELECTRIC FURUKAWA
UHRIDSRE G 2 4 3 1 4 3,0 H 70553 67272 03 12 ZÜRICH % 1,22 % 0,39 752 772 56 593 085 87 CHF 132,30 841 312 30 845 128 AG INDUSTRIES BUCHER
NAISA ESNY 14088 34668 1,0 R 57270 22612 04 02 ISTANBUL % 0,24 % 0,43 172 276 32 790 772 95 TRY 15,10 618 496 63 838 440 1 SANAYI VE INSAAT ENKA
W ATA 1331 18024 8,1 U 73548 3 1 ,4% ,7% FRANKFURT % 2,17 % 0,44 214 535 5 418 385 97 EUR 82,61 204 850 91 361 143 AG SAAT KWS
M 5681 91956 3,1 U 3 8 0 194704 06 14 BRÜSSELS % 1,48 % 0,63 074 447 109 600 586 138 EUR 32,61 526 139 29 821 516 CMB
GCR 9720 9 1 7 9800 KW 143932 0 0 ,8% ,6% SEOL % 0,56 % 0,88 000 300 2 372 319 194 KRW 850,00 29 372 019 192 290 967 CORP LG
OAS IIE 20700 69914 2450 JY 295402 7 2 6 ,7% ,0% TOKYO % 0,20 % 1,17 869 624 172 012 534 259 JPY 415,00 2 144 909 86 000 047 2 LIMITED KOMATSU
TL ISNAR 0 0 343421 3,9 S 8 1 9 -88493 12 22 NASDAQ % 2,27 % 1,29 923 834 -18 298 519 285 USD 30,49 221 354 304 300 501 1 ADR NILSEN STOLT
OECROAINB 4 0 160468 4,4 U 9 7 2 124710 13 07 HELSINKI % 0,78 % 1,35 120 447 142 728 471 298 EUR 42,94 608 024 156 300 845 B CORPORATION KONE
TYCO INTERNATIONAL 1 762 900 337 164 953 30,40 USD 334 281 098 -2 883 855 1,51 % 0,09 % NEW YORK NEW % 0,09 % 1,51 855 883 -2 098 281 334 USD 30,40 953 164 337 900 762 1 INTERNATIONAL TYCO
I RNEKM 2 2 147807 3,9 U 0 9 0 258224 18 05 AMSTERDAM % 0,57 % 1,81 284 882 235 300 590 400 EUR 31,89 017 708 164 621 527 1 KLM FRANCE AIR
ASN EV NUTIS 3 9 250835 2 0,0 R 1 7 7 253118 18 11 KOREA % 1,18 % 1,86 178 381 205 572 479 410 KRW 300,00 22 395 098 205 090 735 2 INDUSTRIES HEAVY SAMSUNG
BUNGE LIMITED 1 098 981 377 934 086 72,51 USD 497 048 363 119 114 277 2,25 % 0,92 % NEW YORK NEW % 0,92 % 2,25 277 114 119 363 048 497 USD 72,51 086 934 377 981 098 1 LIMITED BUNGE
IMN G 5 5 763985 7,5 U 4 7 4 6 1 1 ,2% ,5% FRANKFURT % 0,15 % 3,82 911 511 67 745 871 843 EUR 75,55 835 359 776 350 358 1 AG SIEMENS
INDUSTRIALS INDUSTRIALS
TOTAL RAW MATERIALS 1 523 761 353 2 294 684 271 770 922 918 10,38 % % 10,38 918 922 770 271 684 294 2 353 761 523 1 MATERIALS RAW TOTAL
ASIA PULP&PAPER 86 600 4 565 292 0,01 USD 5 402 -4 559 891 0,00 % 0,03 % NEW YORK YORK NEW % 0,03 % 0,00 891 559 -4 402 5 USD 0,01 292 565 4 600 86 PULP&PAPER ASIA
EE A 3560 3 1 66 MN 71377 8 6 ,3% ,0% MEXICO % 0,00 % 0,03 260 181 777 113 7 MXN 36,61 517 932 6 600 335 SAB CEMEX
CLEVELAND-CLIFFS INC 171 200 38 665 620 48,44 USD 51 727 138 13 061 519 0,23 % 0,42 % NEW YORK NEW % 0,42 % 0,23 519 061 13 138 727 51 USD 48,44 620 665 38 200 171 INC CLEVELAND-CLIFFS
PXSLE IE 5940 36661 1,9 S 54120 82541 02 09 AMEX % 0,96 % 0,25 451 205 -8 240 451 55 USD 15,89 691 656 63 470 559 MINES SILVER APEX
HARMONY GOLD MINING ADR 629 000 66 451 245 15,75 USD 61 793 353 -4 657 891 0,28 % 0,16 % NEW YORK NEW % 0,16 % 0,28 891 657 -4 353 793 61 USD 15,75 245 451 66 000 629 ADR MINING GOLD HARMONY
LA 2566 08289 5,8 A 86292 0 7 ,1% ,6% TORONTO % 0,06 % 0,31 074 800 7 922 672 68 CAD 56,78 849 872 60 666 225 ALCAN
RMT 192 78699 114 ER 7 8 5 4 0 0 ,2% ,8% PARIS % 0,28 % 0,32 801 900 43 750 787 71 EUR 121,40 949 886 27 912 71 ERAMET
VOTORANTIM CELLULOSE ADR 1 092 700 87 500 839 19,61 USD 133 656 196 46 155 357 0,60 % 1,11 % NEW YORK NEW % 1,11 % 0,60 357 155 46 196 656 133 USD 19,61 839 500 87 700 092 1 ADR CELLULOSE VOTORANTIM
EIAGOHW 9 8 176475 67 ER 148270 71795 06 45 HELSINKI % 4,53 % 0,66 975 187 17 720 832 144 EUR 6,79 745 644 127 980 593 2 GROWHOW KEMIRA
VALE RIO DEL DOCE ADR PREF 1 033 000 124 390 185 26,25 USD 169 137 609 44 747 425 0,76 % 0,11 % NEW YORK NEW % 0,11 % 0,76 425 747 44 609 137 169 USD 26,25 185 390 124 000 033 1 PREF ADR DOCE DEL RIO VALE
LOUISIANA-PACIFIC 1 609 300 271 374 075 21,53 USD 216 118 328 -55 255 746 0,98 % 1,54 % NEW YORK NEW % 1,54 % 0,98 746 255 -55 328 118 216 USD 21,53 075 374 271 300 609 1 LOUISIANA-PACIFIC
RP EIOSBD V 07320 0 0 7 96 MN 267343 3 7 3 ,2% ,2% MEXICO % 0,42 % 1,12 937 673 137 413 783 246 MXN 39,60 476 109 109 220 763 10 CV DE SAB MEXICO GRUPO
OIE 27735 53604 160 SK 472475 6 0 9 ,8% ,4% STOCKHOLM % 0,94 % 1,98 790 908 361 795 294 437 SEK 176,00 004 386 75 365 727 2 BOLIDEN
VNK ELLS 19530 5 2 6 5,0 E 3 0 2 109470 28 09 STOCKHOLM % 0,98 % 2,85 760 984 170 626 309 630 SEK 357,50 867 324 459 350 935 1 B CELLULOSA SVENSKA
RAW MATERIALS MATERIALS RAW
TOTAL ENERGY 1 357 124 053 1 866 985 182 509 861 130 8,44 % % 8,44 130 861 509 182 985 866 1 053 124 357 1 ENERGY TOTAL
FMC TECHNOLOGIES 57 700 11 213 590 61,63 USD 22 180 868 10 967 279 0,10 % 0,08 % NEW YORK YORK NEW % 0,08 % 0,10 279 967 10 868 180 22 USD 61,63 590 213 11 700 57 TECHNOLOGIES FMC
MARINER ENERGY INC 383 689 35 054 078 19,60 USD 46 907 899 11 853 821 0,21 % 0,44 % NEW YORK NEW % 0,44 % 0,21 821 853 11 899 907 46 USD 19,60 078 054 35 689 383 INC ENERGY MARINER
P 3 5 5 5 7 ,7 B 11898 10947 02 00 LONDON % 0,00 % 0,23 497 089 -1 978 168 51 GBP 5,67 475 258 52 457 738 BP
FOREST OIL CORP 474 100 60 318 581 32,68 USD 96 641 255 36 322 674 0,44 % 0,75 % NEW YORK NEW % 0,75 % 0,44 674 322 36 255 641 96 USD 32,68 581 318 60 100 474 CORP OIL FOREST
BP ADR 351 000 155 763 001 67,10 USD 146 906 224 -8 856 777 0,66 % 0,00 % NEW YORK NEW % 0,00 % 0,66 777 856 -8 224 906 146 USD 67,10 001 763 155 000 351 ADR BP
TRANSOCEAN 323 410 66 167 569 80,89 USD 163 176 960 97 009 391 0,74 % 0,11 % NEW YORK NEW % 0,11 % 0,74 391 009 97 960 176 163 USD 80,89 569 167 66 410 323 TRANSOCEAN
PETROBRAS PREF. ADR 805 900 145 561 087 92,76 USD 466 286 084 320 724 997 2,11 % 0,17 % NEW YORK NEW % 0,17 % 2,11 997 724 320 084 286 466 USD 92,76 087 561 145 900 805 ADR PREF. PETROBRAS
PRIDE INTERNATIONAL 4 667 606 830 787 671 30,01 USD 873 716 915 42 929 243 3,95 % 2,85 % NEW YORK NEW % 2,85 % 3,95 243 929 42 915 716 873 USD 30,01 671 787 830 606 667 4 INTERNATIONAL PRIDE
ENERGY ENERGY
SECURITY NUMBER VALUE NOK PRICE CURRENCY VALUE NOK GAIN/LOSS FUND COMPANY EXCHANGE EXCHANGE COMPANY FUND GAIN/LOSS NOK VALUE CURRENCY PRICE NOK VALUE NUMBER SECURITY
CUSTO MRE- AKT NELSD HR F HR N STOCK IN SHARE OF SHARE UNREALISED MARKET- MARKET- ACQUISITION
SKAGEN Global SKAGEN Note 8. Securities portfolio as of 31st December 2006 December 31st of as portfolio Securities 8. Note
58 ANNUAL REPORT 2006 • SKAGEN FUNDS • FUNDS SKAGEN • 2006 REPORT ANNUAL SKAGEN Global SKAGEN
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* FOR LIQUIDITY IN THE PORTFOLIO AS OF 31.12.2006, PLEASE REFER TO BALANCE SHEET. BALANCE TO REFER PLEASE 31.12.2006, OF AS PORTFOLIO THE IN LIQUIDITY FOR *
AEPIEA F2.20 746,6746 29.12.06 OF AS PRICE BASE
TOTAL EQUITY PORTFOLIO* 14 623 584 380 21 376 163 097 6 752 578 718 96,67 % % 96,67 718 578 752 6 097 163 376 21 380 584 623 14 PORTFOLIO* EQUITY TOTAL
TOTAL UTILITIES 457 748 598 628 108 499 170 359 901 2,84 % % 2,84 901 359 170 499 108 628 598 748 457 UTILITIES TOTAL
ELETROBRAS PREFERED 4 489 186 457 748 598 47,90 BRL 628 108 499 170 359 901 2,84 % 0,00 % SAO PAULO SAO % 0,00 % 2,84 901 359 170 499 108 628 BRL 47,90 598 748 457 186 489 4 PREFERED ELETROBRAS
UTILITIES UTILITIES
TOTAL TELECOM 1 037 979 788 1 971 334 518 933 354 731 8,92 % % 8,92 731 354 933 518 334 971 1 788 979 037 1 TELECOM TOTAL
0,06 % 0,00 % OTC OTC % 0,00 % 0,06 056 065 4 295 388 13 USD 72,76 239 323 9 500 29 TELECOM PAKISTAN
OA CESTLCMUIAIN 3 0 135421 43 UD 264647 1 2 2 ,1% ,9% SINGAPORE % 2,09 % 1,21 226 922 112 437 466 266 USD 4,30 211 544 153 900 934 9 TELECOMMUNICATION ACCESS TOTAL
INDOSAT TBK,ADR 1 189 500 160 581 050 38,52 USD 285 799 381 125 218 331 1,29 % 1,09 % NEW YORK NEW % 1,09 % 1,29 331 218 125 381 799 285 USD 38,52 050 581 160 500 189 1 TBK,ADR INDOSAT
BHARTI AIRTEL PART.CERT. SSB 3 167 262 69 968 151 15,00 USD 296 336 951 226 368 800 1,34 % 0,17 % LONDON INT. INT. LONDON % 0,17 % 1,34 800 368 226 951 336 296 USD 15,00 151 968 69 262 167 3 SSB PART.CERT. AIRTEL BHARTI
IGPR EEOMNCTO IIE 2 1 0 233380 32 SD 329655 96265 13 01 SINGAPORE % 0,14 % 1,37 685 612 59 535 996 302 SGD 3,28 850 383 243 000 711 22 LIMITED TELECOMMUNICATION SINGAPORE
AYRTLKM 4 7 240807 1000 HF 382348 42541 14 09 BUDAPEST % 0,91 % 1,48 431 205 44 458 233 328 HUF 060,00 1 027 028 284 677 440 9 TELEKOM MAGYAR
TELEKOMUNIK INDONESIA ADR 1 680 953 117 151 261 45,60 USD 478 113 462 360 962 201 2,16 % 0,33 % NEW YORK NEW % 0,33 % 2,16 201 962 360 462 113 478 USD 45,60 261 151 117 953 680 1 ADR INDONESIA TELEKOMUNIK
TELECOM TELECOM
TOTAL INFORMATION TECHNOLOGY 1 729 066 237 2 256 008 824 526 942 586 10,20 % % 10,20 586 942 526 824 008 256 2 237 066 729 1 TECHNOLOGY INFORMATION TOTAL
RATI RU B 4 2 92975 3,0 E 5 1 - 4 8 ,3% ,4% STOCKHOLM % 2,04 % 0,03 380 640 -1 415 659 7 SEK 35,00 795 299 9 220 240 AB GROUP IT PROACT
T EEO 2250 06372 6,0 K 74000 1 4 0 ,8% ,6% KØBENHAVN % 2,46 % 0,08 702 143 -13 050 470 17 DKK 68,00 752 613 30 500 232 TELECOM RTX
TRAVELSKY TECHNOLOGY 2 531 000 15 888 335 11,86 HKD 24 134 199 8 245 864 0,11 % 0,81 % HONG KONG HONG % 0,81 % 0,11 864 245 8 199 134 24 HKD 11,86 335 888 15 000 531 2 TECHNOLOGY TRAVELSKY
ASN D 5 3 2 8 8 4300 KW 2 5 5 3570 01 01 KOREA % 0,13 % 0,11 770 365 551 155 25 KRW 300,00 64 781 789 24 131 58 SDI SAMSUNG
KYOCERA ADR 42 950 37 558 020 94,89 USD 25 421 090 -12 136 929 0,11 % 0,02 % NEW YORK NEW % 0,02 % 0,11 929 136 -12 090 421 25 USD 94,89 020 558 37 950 42 ADR KYOCERA
SAMSUNG ELECTRONICS PREF. GDR 132 795 132 646 178 255,50 USD 211 632 902 78 986 724 0,96 % 0,29 % LONDON INT. INT. LONDON % 0,29 % 0,96 724 986 78 902 632 211 USD 255,50 178 646 132 795 132 GDR PREF. ELECTRONICS SAMSUNG
HEWLETT-PACKARD 1 187 800 206 868 765 41,19 USD 305 172 694 98 303 929 1,38 % 0,04 % NEW YORK NEW % 0,04 % 1,38 929 303 98 694 172 305 USD 41,19 765 868 206 800 187 1 HEWLETT-PACKARD
SAMSUNG ELECTRONICS GDR 197 866 165 152 430 329,00 USD 406 048 239 240 895 809 1,84 % 0,07 % LONDON INT. INT. LONDON % 0,07 % 1,84 809 895 240 239 048 406 USD 329,00 430 152 165 866 197 GDR ELECTRONICS SAMSUNG
YCR 4 0 552826 1 2,0 P 5 1 4 1699 25 04 TOKYO % 0,49 % 2,51 989 176 245 415 555 JPY 220,00 11 256 238 555 900 942 KYOCERA
ASN LCRNC RF 2980 5 1 2 40000 KW 678940 2 8 1 ,7% ,2% KOREA % 0,92 % 3,07 513 888 126 440 899 677 KRW 000,00 480 927 010 551 850 209 PREF. ELECTRONICS SAMSUNG
INFORMATION TECHNOLOGY TECHNOLOGY INFORMATION
TOTAL FINANCIALS 2 799 351 055 4 230 366 628 1 431 015 574 19,13 % % 19,13 574 015 431 1 628 366 230 4 055 351 799 2 FINANCIALS TOTAL
ABERDEEN ASSET MANAGEMENT PREF. 6.25 557 6 648 625 2 020,00 GBP 13 737 959 7 089 334 0,06 % 0,74 % LONDON LONDON % 0,74 % 0,06 334 089 7 959 737 13 GBP 020,00 2 625 648 6 557 6.25 PREF. MANAGEMENT ASSET ABERDEEN
YAPI KREDI BANK 2 531 086 42 546 508 1,79 USD 28 259 892 -14 286 616 0,13 % 0,34 % LONDON INT. LONDON % 0,34 % 0,13 616 286 -14 892 259 28 USD 1,79 508 546 42 086 531 2 BANK KREDI YAPI
AELBN 1 0 1 0 2 46 ER 3 8 9 1 8 7 ,5% ,8% FRANKFURT % 0,28 % 0,15 870 483 18 098 087 34 EUR 34,66 228 603 15 600 119 BANK AAREAL
I RU Y 7770 18416 61 ER 3 9 4 36429 01 16 HELSINKI % 1,66 % 0,16 299 644 3 444 498 35 EUR 6,10 146 854 31 700 707 OYJ GROUP FIM
A EENE MO 4570 66472 92 ER 3 8 1 3885 01 14 FRANKFURT % 1,49 % 0,17 845 348 617 983 36 EUR 9,26 772 634 36 700 485 IMMOB TEGERNSEE TAG
SAKTLMBNAIA 41368 60251 56 TY 123360 63109 04 13 ISTANBUL % 1,38 % 0,46 099 361 26 640 393 102 TRY 5,60 541 032 76 698 153 4 AS BANKASI KATILIM ASYA
NI 7790 75918 110 SK 142847 67939 04 28 STOCKHOLM % 2,87 % 0,47 349 729 66 487 268 104 SEK 151,00 138 539 37 980 757 B INVIK
AAC ODN HC MR 68030 2 8 0 ,5 R 6 4 3 4 5 2 ,5% ,8% ISTANBUL % 0,38 % 0,75 024 156 45 031 140 166 TRY 5,55 007 984 120 350 800 6 OMER) (HACI HOLDING SABANCI
OENRISRNE 21371 42317 1 0,0 R 8 0 1 132233 08 19 KOREA % 1,96 % 0,85 343 272 153 511 505 187 KRW 700,00 12 167 233 34 791 193 2 REINSURANCE KOREAN
AA EUIISFNNE 9 0 183994 1410 JY 187563 04570 08 25 TOKYO % 2,50 % 0,85 780 435 10 683 775 188 JPY 441,00 1 904 339 178 300 495 2 FINANCE SECURITIES JAPAN
SK EUIISECAG 658 35920 9 0,0 P 0 3 2 125920 09 24 TOKYO % 2,44 % 0,93 260 579 132 520 138 206 JPY 000,00 596 260 559 73 588 6 EXCHANGE SECURITIES OSAKA
BRENASTMNGMN 93800 45143 19 GP 264022 4 6 4 ,8% ,9% LONDON % 1,49 % 0,98 849 868 141 272 400 216 GBP 1,90 423 531 74 000 328 9 MANAGEMENT ASSET ABERDEEN
IRSA SA 2 157 210 176 390 221 16,91 USD 227 534 152 51 143 931 1,03 % 4,81 % NEW YORK NEW % 4,81 % 1,03 931 143 51 152 534 227 USD 16,91 221 390 176 210 157 2 SA IRSA
INVKIVA,SRB 5 0 8 5 4 1,0 E 4 8 6 170563 11 11 STOCKHOLM % 1,10 % 1,11 613 025 157 562 281 246 SEK 115,00 949 255 89 800 350 2 B SER AB, INV KINNEVIK
ANVRREKESCEUG 9 8 241024 3,1 U 8 3 7 8 3 7 ,9% ,2% FRANKFURT % 0,82 % 1,29 179 737 81 473 837 285 EUR 35,01 294 100 204 880 992 RUECKVERSICHERUNG HANNOVER
CHEUNG KONG HOLDINGS LTD 4 057 000 296 783 548 95,75 HKD 312 320 031 15 536 483 1,41 % 0,18 % HONG KONG HONG % 0,18 % 1,41 483 536 15 031 320 312 HKD 95,75 548 783 296 000 057 4 LTD HOLDINGS KONG CHEUNG
BANCO DO BRASIL 1 670 900 202 724 498 64,00 BRL 312 364 730 109 640 231 1,41 % 0,20 % SAO PAULO SAO % 0,20 % 1,41 231 640 109 730 364 312 BRL 64,00 498 724 202 900 670 1 BRASIL DO BANCO
AKASRACEIASAT 0 6 287614 198 ER 689487 1 7 1 ,6% ,8% WIEN % 0,48 % 3,16 713 178 410 897 904 698 EUR 119,80 184 726 288 465 709 CREDITANSTALT AUSTRIA BANK
SCHLIG L 72455 1 6 4 ,1 B 2 3 3 1 7 8 ,4% ,6% LONDON. % 0,06 % 3,74 988 070 14 630 934 826 GBP 9,31 642 863 812 545 274 7 PLC HOLDINGS HSBC
FINANCIALS FINANCIALS
TOTAL HEALTH CARE 841 407 875 1 135 076 476 293 668 602 5,13 % % 5,13 602 668 293 476 076 135 1 875 407 841 CARE HEALTH TOTAL
BIOVITRUM 93 000 8 769 241 114,00 SEK 9 658 422 889 181 0,04 % 0,21 % STOCKHOLM STOCKHOLM % 0,21 % 0,04 181 889 422 658 9 SEK 114,00 241 769 8 000 93 BIOVITRUM
ERSAC 1250 18924 315 DK 3 6 6 1 7 9 ,8% ,1% KØBENHAVN % 0,91 % 0,18 195 077 18 469 966 39 DKK 321,50 274 889 21 500 112 NEUROSEARCH
UA OPRTO 4 1 2 4 7 18000 KW 5 5 1 3 1 4 ,7% ,4% SEOL % 0,54 % 0,27 543 211 36 419 955 58 KRW 000,00 178 876 743 22 214 49 CORPORATION YUHAN
IESINE 2990 62064 4 0,0 R 62564 99501 03 14 SEOL % 1,45 % 0,34 041 995 29 674 205 76 KRW 200,00 47 634 210 46 900 239 SCIENCES LIFE
RICHTER GEDOEN NYRT 89 800 46 341 537 227,50 USD 127 429 006 81 087 469 0,58 % 0,48 % LONDON LG LG LONDON % 0,48 % 0,58 469 087 81 006 429 127 USD 227,50 537 341 46 800 89 NYRT GEDOEN RICHTER
IA OLD 2 0 151727 6500 JY 190705 39978 08 01 TOKYO % 0,18 % 0,81 758 939 63 025 057 179 JPY 540,00 6 267 117 115 500 521 LTD CO EISAI
IENRCTR 1458 1 7 8 3350 HF 266300 09069 12 10 BUDAPEST % 1,04 % 1,25 609 990 60 090 663 276 HUF 345,00 43 481 672 215 598 194 RICHTER GIDEON
PFIZER 2 272 600 364 663 566 25,90 USD 367 141 371 2 477 805 1,66 % 0,03 % NEW YORK NEW % 0,03 % 1,66 805 477 2 371 141 367 USD 25,90 566 663 364 600 272 2 PFIZER
HEALTH CARE CARE HEALTH
SECURITY NUMBER VALUE NOK PRICE CURRENCY VALUE NOK GAIN/LOSS FUND COMPANY EXCHANGE EXCHANGE COMPANY FUND GAIN/LOSS NOK VALUE CURRENCY PRICE NOK VALUE NUMBER SECURITY
CUSTO MRE- AKT NELSD HR F HR N STOCK IN SHARE OF SHARE UNREALISED MARKET- MARKET- ACQUISITION
Continuation Continuation SKAGEN Global SKAGEN Note 8. Securities portfolio as of 31st December 2006 December 31st of as portfolio Securities 8. Note
59 SKAGEN Global SKAGEN • ANNUAL REPORT 2006 • SKAGEN FUNDS SKAGEN • 2006 REPORT ANNUAL •
BACK TO CONTENTS TO BACK >>
* THE FUND WAS ESTABLISHED DURING THE YEAR THE DURING ESTABLISHED WAS FUND THE * % OF NET ASSETS UNDER MANAGEMENT UNDER ASSETS NET OF %
2,4 % 2,4 CORE EU CORE
5,8 % 5,8 PERIPHERY EU PERIPHERY
15,3 % 15,3 EMEA
11,6 % 11,6 NORTH AMERICA NORTH
SOUTH AMERICA SOUTH 23,8 % 23,8
SIA EXCL. JAPAN EXCL. SIA A 35,4 % 35,4
JAPAN 0,3 % 0,3
NORWAY 4,8 % 4,8
ANNUAL RETURN ANNUAL GEOGRAPHICAL DISTRIBUTION GEOGRAPHICAL
% OF NET ASSETS UNDER MANAGEMENT UNDER ASSETS NET OF %
ENERGY 20,4 % 20,4
7,4 % 7,4 RAW MATERIALS RAW
6,4 % 6,4 INDUSTRIALS
9,2 % 9,2 CONSUMER DISCRETIONARY CONSUMER
7,2% CONSUMER STAPLES CONSUMER
7,9 % 7,9 HEALTH CARE HEALTH
17,8 % 17,8 FINANCIALS
7,4 % 7,4 20% ANNUAL GEOMETRIC RETURN GEOMETRIC ANNUAL 20% INFORMATION TECHNOLOGY INFORMATION
MSCI GEM NET (NOK) NET GEM MSCI 7,8% TELECOM
SKAGEN Kon-Tiki SKAGEN
7,8 % 7,8 UTILITIES
0,3% CASH
HISTORIC PRICE DEVELOPMENT PRICE HISTORIC SECTOR DISTRIBUTION SECTOR
higher risk than with a global/ Norwegian equity fund. equity Norwegian global/ a with than risk higher
geographic areas with huge growth potential, but at a a at but potential, growth huge with areas geographic
opportunity of extraordinary returns by investing in in investing by returns extraordinary of opportunity
the world’s emerging markets. The fund offers the the offers fund The markets. emerging world’s the
to benefit from the value creation taking place in in place taking creation value the from benefit to
SKAGEN Kon-Tiki is suitable for an investor who wants wants who investor an for suitable is Kon-Tiki SKAGEN
U’s”: Undervalued, Under-researched and Unpopular. Unpopular. and Under-researched Undervalued, U’s”:
for investment objects. Likewise, the three “SKAGEN “SKAGEN three the Likewise, objects. investment for
*** See note on page 6. Management fee: change in reporting reporting in change fee: Management 6. page on note See ***
** THE FUND WAS ESTABLISHED DURING THE YEAR THE DURING ESTABLISHED WAS FUND THE ** and/or low gearing are important selection criteria criteria selection important are gearing low and/or
* MNOK *
rected at individual companies. Strong cash flow flow cash Strong companies. individual at rected
focus of the investments in SKAGEN Kon-Tiki is di- is Kon-Tiki SKAGEN in investments the of focus 02* -98 3,1 5 9 3,89 190 4 250 -33,41 -29,82 2002**
In line with SKAGEN’s investment philosophy, the the philosophy, investment SKAGEN’s with line In 03 0,3 04 171 3 3,85 835 9 711 1 50,41 102,93 2003
04 23 1,3 2 1 5 3,95 259 16 227 3 14,33 32,35 2004
companies with low valuations. low with companies 05 92 4,3 4 2 5 3,16 553 29 749 8 49,23 59,25 2005
focusing on geographical areas with high growth and and growth high with areas geographical on focusing 06 27 2,6 398 462 2,52 692 44 918 13 21,96 22,75 2006
area. SKAGEN Kon-Tiki is a company oriented fund fund oriented company a is Kon-Tiki SKAGEN area. YEAR INVESTMENT % INDEX VALUE* UNIT HOLDERS TER %*** TER HOLDERS UNIT VALUE* INDEX % INVESTMENT YEAR
RETURN ON BENCHMARK NET ASSET NUMBER OF OF NUMBER ASSET NET BENCHMARK ON RETURN
have emerging markets as a substantial business business substantial a as markets emerging have
is that these companies must be registered in and/or and/or in registered be must companies these that is
J. Kristoffer C. Stensrud C. Kristoffer J. Manager Portfolio
Morgan Stanley World Index. However, the condition condition the However, Index. World Stanley Morgan
Yes fund UCITS
may be invested in markets that are included in the the in included are that markets in invested be may
Benchmark Benchmark MSCI Daily Net $ EM Index Free measured in NOK NOK in measured Free Index EM $ Net Daily MSCI
industry balance, up to 50 percent of the fund’s assets assets fund’s the of percent 50 to up balance, industry
Finland and Luxembourg and Finland
Following from our requirement to have a reasonable reasonable a have to requirement our from Following
Authorised for marketing in in marketing for Authorised Norway, Sweden, Denmark, the Netherlands, Netherlands, the Denmark, Sweden, Norway,
Tax schemes schemes Tax Unit Link Unit
all of Latin America including Mexico. including America Latin of all
Minimum subscription amount amount subscription Minimum One-time subscription NOK 1,000 NOK subscription One-time
(except Japan, Singapore and Hong Kong) as well as as well as Kong) Hong and Singapore Japan, (except
p.a. plus/minus variable management fee management variable plus/minus p.a. 2.5 fee Management %
Index. They are: Eastern Europe, Turkey, Africa, Asia Asia Africa, Turkey, Europe, Eastern are: They Index.
Redemption fee fee Redemption 0 0 %
that are not included in the Morgan Stanley World World Stanley Morgan the in included not are that
Subscription fee fee Subscription (dependent on amount) on (dependent 0.7 - 0.0 %
of its assets in emerging markets. These are markets markets are These markets. emerging in assets its of
Number of unit holders holders unit of Number 44 692 692 44
unit holders. The fund will invest at least 50 percent percent 50 least at invest will fund The holders. unit
Net asset value value asset Net 13 918 mill MNOK mill 918 13
achieve the best possible risk adjusted return for its its for return adjusted risk possible best the achieve
S&P qualitative rating rating qualitative S&P AA
SKAGEN Kon-Tiki has as its overall objective to to objective overall its as has Kon-Tiki SKAGEN
Average annual return return annual Average 31.69 31.69 %
Return since start start since Return 268.46 268.46 %
audited.
Fund start date date start Fund 5th April 2002 April 5th This information is not part of the official accounts and has not been been not has and accounts official the of part not is information This
SKAGEN Kon-Tiki SKAGEN
60 ANNUAL REPORT 2006 • SKAGEN FUNDS • FUNDS SKAGEN • 2006 REPORT ANNUAL SKAGEN Kon-Tiki SKAGEN
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TOTAL HEALTH CARE 666 466 729 1 100 953 642 434 486 913 7,91 % % 7,91 913 486 434 642 953 100 1 729 466 666 CARE HEALTH TOTAL
SELCUK ECZA DEPOSU TICARET 200 000 5 111 278 4,86 TRY 4 279 230 -832 048 0,03 % 0,09 % ISTANBUL ISTANBUL % 0,09 % 0,03 048 -832 230 279 4 TRY 4,86 278 111 5 000 200 TICARET DEPOSU ECZA SELCUK
UGSI HRAETCLID 20000 24312 2,5 W 10020 14282 00 07 TAIPEI % 0,79 % 0,08 892 432 -1 250 030 11 TWD 28,65 142 463 12 000 000 2 IND. PHARMACEUTICAL SHIN YUNG
UUICROAE 1000 52483 1 0,0 R 51280 5 6 ,1% ,6% SEOL % 2,06 % 0,11 963 -51 880 182 15 KRW 800,00 18 843 234 15 000 120 INCORPORATED YUYU
CAIAIYTRMHLIG 8 0 2 8 2 ,0 R 31592 53839 03 37 ISTANBUL % 3,79 % 0,31 309 338 15 932 125 43 TRY 4,70 622 787 27 209 084 2 HOLDING YATIRIM ECZACIBASI
RICHTER GEDOEN NYRT 38 790 26 496 379 227,50 USD 55 044 222 28 547 843 0,40 % 0,21 % LONDON INT. LONDON % 0,21 % 0,40 843 547 28 222 044 55 USD 227,50 379 496 26 790 38 NYRT GEDOEN RICHTER
CAIAISGI RNEISNY ETC 1 9 9 7 0 ,5 R 2 8 8 2 0 8 ,8% ,0% ISTANBUL % 2,80 % 0,88 384 003 26 385 782 122 TRY 5,45 001 779 96 292 117 5 TICA VE SANAYI URUNLERI SAGLIK ECZACIBASI
IENRCTR 2500 2 8 3 3350 HF 494620 22156 30 15 BUDAPEST % 1,58 % 3,01 586 221 92 220 406 419 HUF 345,00 43 634 184 327 000 295 RICHTER GIDEON
AM HRAETCLC T 4647 5 0 3 10000 KW 401252 7 9 9 ,9% ,0% KOREA % 5,50 % 3,09 693 692 274 522 102 430 KRW 000,00 140 830 409 155 487 456 LTD CO PHARMACEUTICAL HANMI
HEALTH CARE CARE HEALTH
TOTAL CONSUMER STAPLES 685 880 041 1 007 839 082 321 959 041 7,24 % % 7,24 041 959 321 082 839 007 1 041 880 685 STAPLES CONSUMER TOTAL
PATERSON ZOCHONIS 1 200 000 16 600 527 1,65 GBP 24 175 800 7 575 273 0,17 % 0,28 % LONDON LONDON % 0,28 % 0,17 273 575 7 800 175 24 GBP 1,65 527 600 16 000 200 1 ZOCHONIS PATERSON
NTDIT NEPIE 6 0 85953 400 DK 3 6 0 2 5 1 ,2% ,7% KØBENHAVN % 1,17 % 0,22 417 651 22 000 161 31 DKK 470,00 583 509 8 000 60 ENTERPRISES INTL UNITED
RM AD VB 0 0 3 2 3 94 MN 3 1 9 15737 02 03 MEXICO % 0,35 % 0,28 357 597 1 296 918 38 MXN 39,40 938 320 37 000 706 1 B CV DE SA GRUMA
OA NBE / 4 0 1 8 0 4,0 K 90600 27535 02 07 KØBENHAVN % 0,75 % 0,28 355 705 22 060 086 39 DKK 740,00 705 380 16 800 47 A/S UNIBREW ROYAL
CRESUD ADR 800 718 77 648 198 17,23 USD 86 054 865 8 406 667 0,62 % 3,47 % NEW YORK NEW % 3,47 % 0,62 667 406 8 865 054 86 USD 17,23 198 648 77 718 800 ADR CRESUD
IOAN AK 4558 1 5 1 3,0 I 5 6 7 3 0 6 ,9% ,1% LJUBLJANA % 5,31 % 1,09 164 006 36 279 362 151 SIT 630,00 9 116 356 115 588 455 LASKO PIVOVARNA
PAN FISH ASA 27 999 457 146 617 725 5,70 NOK 159 596 905 12 979 180 1,15 % 0,81 % OSLO BØRS OSLO % 0,81 % 1,15 180 979 12 905 596 159 NOK 5,70 725 617 146 457 999 27 ASA FISH PAN
ORVA 0 1 8 8 0 7,1 R 6 6 4 7 8 4 ,5% ,2% ZAGREB % 5,62 % 1,15 240 886 78 946 269 160 HRK 470,01 706 383 81 915 303 PODRAVKA
AIIA ODN S 0 7 160254 3,0 R 1 1 3 111138 22 50 ISTANBUL % 5,00 % 2,28 388 151 131 931 213 317 TRY 36,00 544 062 186 476 001 2 AS HOLDING YAZICILAR
CONSUMER STAPLES STAPLES CONSUMER
TOTAL CONSUMER DISCRETIONARY 995 597 692 1 275 613 236 280 015 544 9,17 % % 9,17 544 015 280 236 613 275 1 692 597 995 DISCRETIONARY CONSUMER TOTAL
27 170 2 944 912 18 000,00 KRW 3 291 374 346 461 0,02 % 0,08 % SEOL SEOL % 0,08 % 0,02 461 346 374 291 3 KRW 000,00 18 912 944 2 170 27 HANDSOME
CONVENIENCE RETAIL ASIA 3 000 000 4 955 899 3,11 HKD 7 501 320 2 545 421 0,05 % 0,44 % HONG KONG HONG % 0,44 % 0,05 421 545 2 320 501 7 HKD 3,11 899 955 4 000 000 3 ASIA RETAIL CONVENIENCE
NEEDN ES&MDA 4 9 1 2 7 ,1 U 59175 0 3 ,9% ,4% LONDON % 0,14 % 0,19 638 309 6 715 931 25 EUR 3,01 078 622 19 694 047 1 MEDIA & NEWS INDEPENDENT
AUISHTL 3 6 1 6 3 5,0 U 03955 29418 02 16 BUDAPEST % 1,61 % 0,22 108 914 12 545 379 30 HUF 950,00 6 437 465 17 267 133 HOTELS DANUBIUS
HPIEHLIG 19000 48479 2,5 A 33545 2 8 ,1% ,5% JOH.S.BURG % 0,35 % 0,31 686 520 8 415 325 43 ZAR 25,65 729 804 34 000 900 1 HOLDINGS SHOPRITE
CHINA TRAVEL INTL INV 30 046 000 50 494 707 2,54 HKD 61 358 739 10 864 033 0,44 % 0,53 % HONG KONG HONG % 0,53 % 0,44 033 864 10 739 358 61 HKD 2,54 707 494 50 000 046 30 INV INTL TRAVEL CHINA
SNYN OO O 27000 2 4 4 6,0 R 55940 2 6 8 ,9% ,4% KOREA % 2,24 % 0,69 185 164 -27 460 579 95 KRW 260,00 5 645 743 122 000 700 2 CO. MOTOR SSANGYONG
RP LKR A 5 0 9 5 9 3,9 X 0 5 8 1 9 9 ,4% ,6% MEXICO % 0,56 % 0,74 692 298 12 189 555 102 MXN 130,99 496 256 90 200 352 1 SA ELEKTRA GRUPO
SHANGRI-LA ASIA 8 100 731 53 425 333 20,05 HKD 130 585 404 77 160 071 0,94 % 0,32 % HONG KONG HONG % 0,32 % 0,94 071 160 77 404 585 130 HKD 20,05 333 425 53 731 100 8 ASIA SHANGRI-LA
MAHINDRA & MAHINDRA LTD GDR 2 963 310 68 765 021 20,70 USD 382 611 475 313 846 454 2,75 % 1,21 % LONDON INT. LONDON % 1,21 % 2,75 454 846 313 475 611 382 USD 20,70 021 765 68 310 963 2 GDR LTD MAHINDRA & MAHINDRA
GEETOISPE. 18000 3 1 3 2400 KW 324360 176585 28 12 KOREA % 1,29 % 2,82 835 625 -137 600 493 392 KRW 400,00 32 435 119 530 000 800 1 PREF. ELECTRONICS LG
CONSUMER DISCRETIONARY DISCRETIONARY CONSUMER
TOTAL INDUSTRIALS 549 391 365 890 412 863 341 021 498 6,40 % % 6,40 498 021 341 863 412 890 365 391 549 INDUSTRIALS TOTAL
AA 5 16513 5 0,0 I 2 7 2159 00 00 LJUBLJANA % 0,05 % 0,01 549 221 671 826 1 SIT 500,00 55 123 605 1 954 SAVA
UIAAH TASI O 1000 2 3 0,0 P 5 5 14193 00 07 TOKYO % 0,78 % 0,02 913 421 1 250 651 2 JPY 505,00 337 229 1 000 100 CO. STEAMSHIP KURIBAYASHI
OUA OY 2000 9 8 8,0 P 0 2 - 9 5 ,4% ,6% TOKYO % 0,66 % 0,04 155 694 -1 625 000 5 JPY 381,00 780 694 6 000 250 KOGYO KOKUSAI
IDT INTERNATIONAL 18 009 259 17 633 117 0,46 HKD 6 660 544 -10 972 573 0,05 % 0,72 % HONG KONG HONG % 0,72 % 0,05 573 972 -10 544 660 6 HKD 0,46 117 633 17 259 009 18 INTERNATIONAL IDT
ESSLGSIS 3 0 84304 42 TY 80668 4646 00 08 ISTANBUL % 0,86 % 0,06 446 -416 638 026 8 TRY 4,24 084 443 8 000 430 LOGISTICS REYSAS
GCR RF 2000 26750 1 0,0 R 24820 1930 01 60 SEOL % 6,03 % 0,16 350 -179 200 478 22 KRW 700,00 16 550 657 22 000 200 PREF. CORP LG
SHIP FINANCE INTL 158 300 15 531 282 23,76 USD 23 460 535 7 929 253 0,17 % 0,22 % NEW YORK NEW % 0,22 % 0,17 253 929 7 535 460 23 USD 23,76 282 531 15 300 158 INTL FINANCE SHIP
TOYO KANETSU CORP 2 000 000 20 955 232 285,00 JPY 29 925 000 8 969 768 0,22 % 1,44 % OSLO BØRS OSLO % 1,44 % 0,22 768 969 8 000 925 29 JPY 285,00 232 955 20 000 000 2 CORP KANETSU TOYO
KERP 14750 14636 28 ER 3 1 9 -82644 02 70 WIEN % 7,09 % 0,24 474 216 -18 892 219 33 EUR 2,85 366 436 51 500 417 1 SKYEUROPE
HI IWY NENTOA 54970 24805 4,5 H 20972 3833 03 03 BANGKOK % 0,32 % 0,30 383 -338 712 069 42 THB 44,25 095 408 42 700 479 5 INTERNATIONAL AIRWAYS THAI
OE IE 0 0 3 1 9 9500 KW 6 2 0 3 1 0 ,8% ,0% KOREA % 2,00 % 0,48 504 810 30 000 627 66 KRW 500,00 49 496 816 35 000 200 LINE KOREA
GOLDEN OCEAN GROUP 5 995 000 22 918 680 11,15 NOK 66 844 250 43 925 570 0,48 % 2,21 % OSLO BØRS OSLO % 2,21 % 0,48 570 925 43 250 844 66 NOK 11,15 680 918 22 000 995 5 GROUP OCEAN GOLDEN
NAISA ESNY 22212 58287 1,0 R 4 9 4 5 6 0 ,5% ,7% ISTANBUL % 0,37 % 1,05 609 560 50 445 393 146 TRY 15,10 837 832 95 142 202 2 SANAYI VE INSAAT ENKA
ASN EV NUTIS 0 0 262936 2 0,0 R 3 2 0 289974 31 12 KOREA % 1,26 % 3,13 714 999 228 100 229 435 KRW 300,00 22 386 229 206 000 900 2 INDUSTRIES HEAVY SAMSUNG
INDUSTRIALS INDUSTRIALS
TOTAL RAW MATERIALS 671 859 233 1 024 799 495 352 940 261 7,36 % % 7,36 261 940 352 495 799 024 1 233 859 671 MATERIALS RAW TOTAL
NORTHLAND RESOURCES INC. RESTRICTED 300 000 2 175 000 7,75 NOK 2 325 000 150 000 0,02 % 0,49 % OSLO BØRS OSLO % 0,49 % 0,02 000 150 000 325 2 NOK 7,75 000 175 2 000 300 RESTRICTED INC. RESOURCES NORTHLAND
IG IIGPC 0 0 78760 05 GP 63920 15840 00 12 LONDON % 1,27 % 0,05 470 538 -1 200 349 6 GBP 0,52 670 887 7 000 000 1 PLC MINING RIDGE
NORTHLAND RESOURCES INC. 900 000 6 705 000 7,75 NOK 6 975 000 270 000 0,05 % 1,46 % OSLO BØRS OSLO % 1,46 % 0,05 000 270 000 975 6 NOK 7,75 000 705 6 000 900 INC. RESOURCES NORTHLAND
EE A 15000 04451 3,0 X 17710 1 5 ,3% ,2% MEXICO % 0,02 % 0,23 559 312 1 100 787 31 MXN 36,60 541 474 30 000 500 1 SAB CEMEX
HARMONY GOLD MINING ADR 750 000 54 182 186 15,75 USD 73 680 469 19 498 283 0,53 % 0,19 % NEW YORK NEW % 0,19 % 0,53 283 498 19 469 680 73 USD 15,75 186 182 54 000 750 ADR MINING GOLD HARMONY
VOTORANTIM CELLULOSE ADR 650 100 49 958 026 19,61 USD 79 518 525 29 560 500 0,57 % 0,66 % NEW YORK NEW % 0,66 % 0,57 500 560 29 525 518 79 USD 19,61 026 958 49 100 650 ADR CELLULOSE VOTORANTIM
RP EIOSBD V 9 0 9 6 1 96 MN 216617 0 7 8 ,5% ,4% MEXICO % 0,34 % 1,45 489 879 101 107 646 201 MXN 39,60 618 766 99 600 794 8 CV DE SAB MEXICO GRUPO
VALE RIO DEL DOCE ADR PREF 3 802 000 420 710 193 26,25 USD 622 518 094 201 807 901 4,47 % 0,40 % NEW YORK NEW % 0,40 % 4,47 901 807 201 094 518 622 USD 26,25 193 710 420 000 802 3 PREF ADR DOCE DEL RIO VALE
RAW MATERIALS MATERIALS RAW
TOTAL ENERGY 2 376 383 152 2 843 850 474 467 467 322 20,44 % % 20,44 322 467 467 474 850 843 2 152 383 376 2 ENERGY TOTAL
DEEP SEA SUPPLY PLC 500 000 6 906 595 18,80 NOK 9 400 000 2 493 405 0,07 % 0,38 % OSLO BØRS OSLO % 0,38 % 0,07 405 493 2 000 400 9 NOK 18,80 595 906 6 000 500 PLC SUPPLY SEA DEEP
RFI 8260 95670 4,0 O 87960 7710 02 36 UNOTERT % 3,63 % 0,28 150 -777 600 759 38 NOK 46,00 750 536 39 600 842 TREFOIL
OSIKNENNFOYOLN 0 0 172570 4,0 L 0 6 0 - 8 5 ,4% ,3% WARSAW % 0,23 % 0,74 550 881 -4 200 364 102 PLN 47,70 750 245 107 000 000 1 ORLEN NAFTOWY KONCERN POLSKI
PETROBRAS PREF. ADR 428 500 145 206 371 92,76 USD 247 926 029 102 719 658 1,78 % 0,09 % NEW YORK NEW % 0,09 % 1,78 658 719 102 029 926 247 USD 92,76 371 206 145 500 428 ADR PREF. PETROBRAS
SEADRILL 4 000 000 227 863 345 105,25 NOK 421 000 000 193 136 655 3,03 % 1,04 % OSLO BØRS OSLO % 1,04 % 3,03 655 136 193 000 000 421 NOK 105,25 345 863 227 000 000 4 SEADRILL
CHINA OILFIELD SERVICES 100 000 000 255 174 126 5,40 HKD 434 160 000 178 985 874 3,12 % 6,52 % HONG KONG HONG % 6,52 % 3,12 874 985 178 000 160 434 HKD 5,40 126 174 255 000 000 100 SERVICES OILFIELD CHINA
NATIONAL OILWELL VARCO 1 331 000 536 525 853 61,18 USD 507 923 243 -28 602 610 3,65 % 0,76 % NEW YORK NEW % 0,76 % 3,65 610 602 -28 243 923 507 USD 61,18 853 525 536 000 331 1 VARCO OILWELL NATIONAL
PRIDE INTERNATIONAL 5 782 000 1 057 924 361 30,01 USD 1 082 317 402 24 393 041 7,78 % 3,52 % NEW YORK NEW % 3,52 % 7,78 041 393 24 402 317 082 1 USD 30,01 361 924 057 1 000 782 5 INTERNATIONAL PRIDE
ENERGY ENERGY
EUIY NME AU O PIE CREC AU O ANLS UD OPN EXCHANGE COMPANY FUND GAIN/LOSS NOK VALUE CURRENCY PRICE NOK VALUE NUMBER SECURITY
CUSTO MRE- AKT NELSD HR F HR N STOCK IN SHARE OF SHARE UNREALISED MARKET- MARKET- ACQUISITION
SKAGEN Kon-Tiki SKAGEN Note 8. Securities portfolio as of 31st December 2006 December 31st of as portfolio Securities 8. Note
61 SKAGEN Kon-Tiki SKAGEN • ANNUAL REPORT 2006 • SKAGEN FUNDS SKAGEN • 2006 REPORT ANNUAL •
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w reporting form is more accurate. more is form reporting w ne the but situation, redemption and subscription stable a has which Funds, SKAGEN for minimal is forms reporting these between
affected by subscription and redemption. The divergence divergence The redemption. and subscription by affected is reporting fee of form This year. the during value asset net average of percentage a as reported been has fee the Previously,
. prospectuses their with accordance in value asset net funds’ the of basis the on calculated is fee daily The unchanged. remains
unit. The charging of the management fee itself itself fee management the of charging The unit. per stated are returns as way same the in unit, fund per fee effective the state will on now from SKAGEN that means change The
a percentage of net asset value per unit. This method of fee reporting removes the effect of subscription and redemption. and subscription of effect the removes reporting fee of method This unit. per value asset net of percentage a
st 2007, the annual management fee is reported as as reported is fee management annual the 2007, st 1 January of As fee. management the of measurement accurate most the with clients its provide to working continuously is SKAGEN
MANAGEMENT FEE: CHANGE OF REPORTING REPORTING OF CHANGE FEE: MANAGEMENT
* FOR LIQUIDITY IN THE PORTFOLIO AS OF 31.12.2006, PLEASE REFER TO BALANCE SHEET. SHEET. BALANCE TO REFER PLEASE 31.12.2006, OF AS PORTFOLIO THE IN LIQUIDITY FOR *
AEPIEA F2.20 6,54 368,4594 29.12.06 OF AS PRICE BASE
TOTAL EQUITY PORTFOLIO* 9 835 527 367 13 889 528 041 4 054 000 675 99,81 % % 99,81 675 000 054 4 041 528 889 13 367 527 835 9 PORTFOLIO* EQUITY TOTAL
TOTAL INTEREST BEARING INSTRUMENTS 53 042 973 62 109 046 9 066 073 0,45 % % 0,45 073 066 9 046 109 62 973 042 53 INSTRUMENTS BEARING INTEREST TOTAL
ARGENTINSK STAT 43 855 798 3 240 930 12,50 ARS 11 155 819 7 914 888 888 914 7 819 155 11 ARS 12,50 930 240 3 798 855 43 STAT ARGENTINSK 0,08 % OTC OTC % 0,08
SADKSA 600000 98203 9,2 S 09328 5 8 ,7% REYKJAVIK % 0,37 185 151 1 228 953 50 ISK 92,52 043 802 49 000 000 600 STAT ISLANDSK
INTEREST BEARING INSTRUMENTS INSTRUMENTS BEARING INTEREST
TOTAL UTILITIES 845 002 656 1 084 348 225 239 345 569 7,79 % % 7,79 569 345 239 225 348 084 1 656 002 845 UTILITIES TOTAL
ELETROBRAS PREFERED 7 750 000 845 002 656 47,90 BRL 1 084 348 225 239 345 569 7,79 % 0,01 % SAO PAULO SAO % 0,01 % 7,79 569 345 239 225 348 084 1 BRL 47,90 656 002 845 000 750 7 PREFERED ELETROBRAS
UTILITIES UTILITIES
TOTAL TELECOM 534 040 584 1 081 840 008 547 799 424 7,77 % % 7,77 424 799 547 008 840 081 1 584 040 534 TELECOM TOTAL
NORTEL NETWORKS NETAS TELEKOM 21 353 2 698 538 30,50 TRY 2 867 201 168 662 0,02 % 0,33 % ISTANBUL ISTANBUL % 0,33 % 0,02 662 168 201 867 2 TRY 30,50 538 698 2 353 21 TELEKOM NETAS NETWORKS NORTEL
AITNTLCM 1 0 27807 7,6 S 3 0 18038 00 00 OTC % 0,00 % 0,03 368 820 1 405 538 4 USD 72,76 037 718 2 000 10 TELECOM PAKISTAN
FIRST PACIFIC CO 11 050 000 35 391 180 4,04 HKD 35 892 168 500 988 0,26 % 0,34 % HONG KONG HONG % 0,34 % 0,26 988 500 168 892 35 HKD 4,04 180 391 35 000 050 11 CO PACIFIC FIRST
TELEFONOS DE VENEZUELA 433 900 53 629 202 19,59 USD 53 019 380 -609 822 0,38 % 0,78 % NEW YORK NEW % 0,78 % 0,38 822 -609 380 019 53 USD 19,59 202 629 53 900 433 VENEZUELA DE TELEFONOS
OA CESTLCMUIAIN 2 0 3 2 1 ,0 S 0 2 6 6 9 5 ,4% ,1% SINGAPORE % 0,81 % 0,74 651 194 66 467 623 102 USD 4,30 816 428 36 200 826 3 TELECOMMUNICATION ACCESS TOTAL
BHARTI AIRTEL PART.CERT. SSB 4 500 000 88 778 502 15,00 USD 421 031 250 332 252 748 3,03 % 0,24 % LONDON INT. LONDON % 0,24 % 3,03 748 252 332 250 031 421 USD 15,00 502 778 88 000 500 4 SSB PART.CERT. AIRTEL BHARTI
INDOSAT TBK,ADR 1 922 300 314 396 308 38,52 USD 461 868 138 147 471 829 3,32 % 1,77 % NEW YORK NEW % 1,77 % 3,32 829 471 147 138 868 461 USD 38,52 308 396 314 300 922 1 TBK,ADR INDOSAT
TELECOM TELECOM
TOTAL INFORMATION TECHNOLOGY 729 631 546 1 035 310 536 305 678 990 7,44 % % 7,44 990 678 305 536 310 035 1 546 631 729 TECHNOLOGY INFORMATION TOTAL
TRAVELSKY TECHNOLOGY 1 000 000 6 159 388 11,86 HKD 9 535 440 3 376 052 0,07 % 0,32 % HONG KONG KONG HONG % 0,32 % 0,07 052 376 3 440 535 9 HKD 11,86 388 159 6 000 000 1 TECHNOLOGY TRAVELSKY
O NIERN 7000 35560 4300 KW 2 8 7 -29850 01 47 KOREA % 4,71 % 0,15 590 938 -22 070 587 20 KRW 370,00 4 660 525 43 000 700 ENGINEERING TOP
RPIOTS 4109 43559 2210 HF 3 9 6 1 7 5 ,2% ,6% BUDAPEST % 3,96 % 0,22 753 079 16 262 395 30 HUF 201,00 2 509 315 14 029 421 SE GRAPHISOFT
RCSN IOATSA 463 82381 2400 HK 6 0 3 3 1 0 ,9% ,6% ZAGREB % 1,86 % 0,49 402 613 39 232 907 67 HRK 460,00 2 831 293 28 603 24 TESLA NIKOLA ERICSSON
SAMSUNG ELECTRONICS PREF. GDR 265 000 203 194 392 255,50 USD 422 325 531 219 131 139 3,03 % 0,58 % LONDON INT. LONDON % 0,58 % 3,03 139 131 219 531 325 422 USD 255,50 392 194 203 000 265 GDR PREF. ELECTRONICS SAMSUNG
ASN LCRNC RF 1000 3 4 6 40000 KW 445000 04723 34 06 KOREA % 0,66 % 3,48 233 417 50 000 560 484 KRW 000,00 480 767 142 434 000 150 PREF. ELECTRONICS SAMSUNG
INFORMATION TECHNOLOGY TECHNOLOGY INFORMATION
TOTAL FINANCIALS 1 728 231 394 2 482 451 435 754 220 041 17,84 % % 17,84 041 220 754 435 451 482 2 394 231 728 1 FINANCIALS TOTAL
NOVAE GROUP 7PCT CNV BDS 15.12.08 GBP10 324 400 3 764 023 99,00 GBP 3 933 638 169 615 0,03 % 0,65 % LONDON LONDON % 0,65 % 0,03 615 169 638 933 3 GBP 99,00 023 764 3 400 324 GBP10 15.12.08 BDS CNV 7PCT GROUP NOVAE
I RU Y 1500 7 9 ,0 U 6 3 7751 00 02 HELSINKI % 0,27 % 0,04 541 797 434 768 5 EUR 6,10 893 970 4 000 115 OYJ GROUP FIM
RMGHSCRTE 175000 13215 100 IR 1 7 8 -2 2 ,8% ,4% JAKARTA % 2,94 % 0,08 320 -125 786 176 11 IDR 150,00 105 302 11 000 500 107 SECURITIES TRIMEGAH
RPIOTPR 4494 1 2 2,0 U 45018 4 2 ,0% ,9% BUDAPEST % 4,09 % 0,10 120 940 6 148 550 14 HUF 020,00 1 029 610 7 904 434 PARK GRAPHISOFT
OA RU 47000 88508 03 GP 2 5 2 17432 01 06 LONDON % 0,64 % 0,15 312 794 1 320 659 20 GBP 0,36 008 865 18 000 700 4 GROUP NOVAE
BRENASTMNGMN RF .5 3 1 0 6 2,0 B 31964 19130 01 12 LONDON % 1,25 % 0,17 320 951 11 684 159 23 GBP 020,00 2 364 208 11 939 6.25 PREF. MANAGEMENT ASSET ABERDEEN
TT AKO NI PNT) 000 1 1 44 UD 2 0 0 1 9 8 ,7% ,2% BOMBAY % 0,02 % 0,17 185 693 14 500 203 23 USD 74,40 315 510 8 000 50 (P-NOTE) INDIA OF BANK STATE
YAPI KREDI BANK 3 277 303 28 674 947 1,79 USD 36 591 498 7 916 550 0,26 % 0,44 % LONDON INT. LONDON % 0,44 % 0,26 550 916 7 498 591 36 USD 1,79 947 674 28 303 277 3 BANK KREDI YAPI
BANK OF EAST ASIA 1 048 496 20 337 282 44,05 HKD 37 133 744 16 796 462 0,27 % 0,07 % HONG KONG HONG % 0,07 % 0,27 462 796 16 744 133 37 HKD 44,05 282 337 20 496 048 1 ASIA EAST OF BANK
SAKTLMBNAIA 20008 51096 56 TY 4 0 9 1 2 9 ,5% ,7% ISTANBUL % 0,67 % 0,35 291 127 14 197 308 49 TRY 5,60 906 180 35 008 000 2 AS BANKASI KATILIM ASYA
IOMCM 1 0 3 1 9 7400 KW 5 6 2 2 4 2 ,1% ,3% KOREA % 2,53 % 0,41 827 347 26 620 164 57 KRW 400,00 27 793 816 30 000 310 KIWOOM.COM
G EUIISC T PNT) 50000 73605 1,0 W 95250 1 4 ,7% ,8% TAIPEI % 1,38 % 0,57 445 116 2 500 502 79 TWD 11,80 055 386 77 000 000 35 (P-NOTE) LTD CO SECURITIES KGI
RP IACEOGLCAAR 2 0 8 7 5 ,6 S 08721 4 9 ,5% ,9% NASDAQ % 1,59 % 0,65 095 845 9 251 817 90 USD 9,56 156 972 80 000 523 1 ADR GALICIA FINANCIERO GRUPO
OAI EUIISC T PNT) 15799 63979 1,5 W 0 8 4 1 0 9 ,5% ,6% TAIPEI % 1,66 % 0,75 890 705 17 649 085 104 TWD 17,15 759 379 86 969 527 31 (P-NOTE) LTD CO SECURITIES POLARIS
OENRISRNE 13600 86217 1 0,0 R 1 3 4 9 0 1 ,1% ,8% KOREA % 1,18 % 0,81 419 702 94 546 334 113 KRW 700,00 12 127 632 18 000 326 1 REINSURANCE KOREAN
BRENASTMNGMN 65589 14446 19 GP 127555 0 9 3 ,0% ,5% LONDON % 1,05 % 1,10 139 291 101 575 785 152 GBP 1,90 436 494 51 869 585 6 MANAGEMENT ASSET ABERDEEN
AAC ODN HC MR 90000 5 7 6 ,5 R 1 0 7 6 2 0 ,8% ,0% ISTANBUL % 0,50 % 1,58 906 929 68 875 904 219 TRY 5,55 969 974 150 000 000 9 OMER) (HACI HOLDING SABANCI
AKASRACEIASAT 1 5 187367 198 ER 361241 2 9 8 ,0% ,1% WIEN % 0,21 % 2,20 884 398 127 491 132 306 EUR 119,80 607 733 178 758 310 CREDITANSTALT AUSTRIA BANK
SCHLIG L 45015 0 9 8 ,1 B 1 5 0 75404 36 00 LONDON % 0,04 % 3,68 024 564 7 706 556 511 GBP 9,31 682 992 503 165 500 4 PLC HOLDINGS HSBC
BANCO DO BRASIL 3 325 500 398 424 938 64,00 BRL 621 682 272 223 257 334 4,47 % 0,40 % SAO PAULO SAO % 0,40 % 4,47 334 257 223 272 682 621 BRL 64,00 938 424 398 500 325 3 BRASIL DO BANCO
FINANCIALS FINANCIALS
EUIY NME AU O PIE CREC AU O ANLS UD OPN EXCHANGE COMPANY FUND GAIN/LOSS NOK VALUE CURRENCY PRICE NOK VALUE NUMBER SECURITY
CUSTO MRE- AKT NELSD HR F HR N STOCK IN SHARE OF SHARE UNREALISED MARKET- MARKET- ACQUISITION
Continuation Continuation SKAGEN Kon-Tiki SKAGEN Note 8. Securities portfolio as of 31st December 2006 December 31st of as portfolio Securities 8. Note
62 ANNUAL REPORT 2006 • SKAGEN FUNDS • FUNDS SKAGEN • 2006 REPORT ANNUAL SKAGEN Kon-Tiki SKAGEN
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* THE FUND WAS ESTABLISHED DURING THE YEAR THE DURING ESTABLISHED WAS FUND THE *
90 90
110 110
130 130
150 150
170 170
ST4X ST4X
190 190
SKAGEN Avkastning SKAGEN
210 210
HISTORIC PRICE DEVELOPMENT PRICE HISTORIC ANNUAL RETURN ANNUAL
** The fund was established during the year the during established was fund The **
* MNOK *
1994 ** 5,71 5,53 5 18 18 5 5,53 5,71 ** 1994
1995 16,11 14,07 34 54 34 14,07 16,11 1995
1996 9,77 8,73 60 131 60 8,73 9,77 1996
1997 3,66 6,05 72 185 72 6,05 3,66 1997
1998 3,63 2,86 21 154 21 2,86 3,63 1998
1999 4,57 5,49 36 194 36 5,49 4,57 1999
2000 6,06 4,55 38 261 38 4,55 6,06 2000
2001 6,17 7,65 60 343 60 7,65 6,17 2001
for active allocation of their interest bearing assets. assets. bearing interest their of allocation active for
2002 6,74 8,10 120 568 120 8,10 6,74 2002
ces, to monitor the fixed income markets all the time time the all markets income fixed the monitor to ces,
2003 6,15 11,13 144 937 144 11,13 6,15 2003
investors who do not wish, or do not have the resour- the have not do or wish, not do who investors
2004 5,72 5,49 575 2 363 2 575 5,49 5,72 2004
makes SKAGEN Avkastning a good alternative for for alternative good a Avkastning SKAGEN makes
2005 5,82 2,55 2 827 6 385 6 827 2 2,55 5,82 2005
ration (the remaining time to maturity for the loans) loans) the for maturity to time remaining (the ration
2006 3,85 0,89 3 020 12 279 12 020 3 0,89 3,85 2006
Flexibility in terms of countries we invest in and du- and in invest we countries of terms in Flexibility
INVESTMENT % INDEX % VALUE* UNIT HOLDERS HOLDERS UNIT VALUE* % INDEX % INVESTMENT
YEAR RETURN ON BENCHMARK NET ASSET NUMBER OF OF NUMBER ASSET NET BENCHMARK ON RETURN YEAR
excess return compared to risk free investments. investments. free risk to compared return excess
interest risk if this is expected to provide a reasonable reasonable a provide to expected is this if risk interest
Ross Porter Ross Manager Portfolio
starting point is that the fund should only assume assume only should fund the that is point starting
yes fund UCITS
best possible return in the fixed income market. The The market. income fixed the in return possible best
ST4X Government Bond Index Index Bond Government ST4X Benchmark
should over a period of six months seek to achieve the the achieve to seek months six of period a over should
Norway, Sweden, Denmark and Luxembourg and Denmark Sweden, Norway, in marketing for Authorised
securities with short and long maturities, the fund fund the maturities, long and short with securities
Unit Link Unit schemes Tax
By balancing investments between interest bearing bearing interest between investments balancing By
One-time subscription NOK 1 000 000 1 NOK subscription One-time amount subscription Minimum
p.a p.a 0.5 fee Management %
primarily made in Norway. Norway. in made primarily
0 0 fee Redemption %
ternational investment mandate but investments are are investments but mandate investment ternational
0 0 fee Subscription %
institutions and bank deposits. The fund has an in- an has fund The deposits. bank and institutions
12 279 12 holders unit of Number
government guaranteed loans, loans to financial financial to loans loans, guaranteed government
3 020 MNOK 020 3 value asset Net
in issues with low default risk, i.e. government bonds, bonds, government i.e. risk, default low with issues in
rating quantitative S&P ✪ ✪ ✪ ✪ ✪ ✪
SKAGEN Avkastning is a bond fund which only invests invests only which fund bond a is Avkastning SKAGEN
6.79 6.79 return annual Average %
124.32 124.32 start since Return %
audited.
16th September 1994 September 16th date start Fund This information is not part of the official accounts and has not been been not has and accounts official the of part not is information This
SKAGEN Avkastning SKAGEN
63 SKAGEN Avkastning SKAGEN • ANNUAL REPORT 2006 • SKAGEN FUNDS SKAGEN • 2006 REPORT ANNUAL •
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CONTINUED NEXT PAGE NEXT CONTINUED
TOTAL EQUITY PORTFOLIO****** 2 982 057 740 46 444 515 2 992 872 488 3 039 251 089 10 748 834 100,63 % % 100,63 834 748 10 089 251 039 3 488 872 992 2 515 444 46 740 057 982 2 PORTFOLIO****** EQUITY TOTAL
PRBNE ITNRE 80-7 , 2 0 0 2 7 0 ,4 ,2 97 4148 49650 54798 4 0 08 5 % 0,84 000 -49 938 417 25 500 926 24 438 491 99,71 0,42 4,14 500 975 24 000 000 25 3,5 08-06-07 MIDT-NORGE SPAREBANKEN
SERTIFIKATER SERTIFIKATER
NORSKE STAT 19-05-17 4,25 50 000 000 50 375 000 4,31 8,05 99,48 1 315 753 49 740 000 51 055 753 -635 000 1,69 % 2 2 % 1,69 000 -635 753 055 51 000 740 49 753 315 1 99,48 8,05 4,31 000 375 50 000 000 50 4,25 19-05-17 STAT NORSKE
OSESA 1-51 65 00000 60000 43 50 117 4 4 5 4 0 5 9 4 -0 0 19 2 % 1,92 500 -200 445 897 57 500 849 55 945 047 2 111,7 5,07 4,35 000 050 56 000 000 50 6,5 15-05-13 STAT NORSKE
GOVERNMENT BONDS BONDS GOVERNMENT
VERDENSBANKEN (AAA) 07-01-10 15 3 300 000 15 096 670 17,92 2,21 412,25 2 142 687 13 604 249 15 746 936 -1 492 421 0,52 % 1 1 % 0,52 421 492 -1 936 746 15 249 604 13 687 142 2 412,25 2,21 17,92 670 096 15 000 300 3 15 07-01-10 (AAA) VERDENSBANKEN
EIAS TT 91-3 3 0 0 1 1 9 ,5 ,6 97 1 5 2 0 4 2 1 0 3604 ,7% 3 % 0,67 044 386 502 314 20 443 301 20 059 13 59,71 5,36 7,35 398 915 19 000 000 34 8 29-12-13 STAT MEXIKANSK
50-6 4 00000 13316 42 47 436 2 2 4 5 8 4 8 0 19685 ,4% 1 % 1,54 825 986 1 304 382 46 980 359 43 324 022 3 433,6 4,73 14,25 156 373 41 000 000 10 14 05-07-16 (AAA) INVESTERINGSBANKEN EUROPEISKE DEN
SADKSA 1-31 7 0 0 0 5 8 4 , 25 81 29427 88940 17367 37545 ,1% 2 % 1,71 425 755 -3 627 753 51 420 829 48 207 924 2 8,14 2,56 9,8 845 584 52 000 000 600 7 17-03-10 STAT ISLANDSK
SADKSA 0-20 0 8 0 0 5 7 7 4 ,1 ,8 5 5 3 5 5 3 45860 ,7% 2 % 1,97 660 578 4 335 451 59 335 451 59 0 8,68 0,11 14 676 872 54 000 000 685 0 09-02-07 STAT ISLANDSK
SADKSA 1-51 72 2500000 1 9 5 ,1 ,3 ,4 5 4 234097 1 5 0 1 9 9 70 2 % 7,06 598 491 -14 705 356 213 957 400 203 748 955 9 8,14 4,63 8,81 556 892 217 000 000 500 2 7,25 17-05-13 STAT ISLANDSK
BRASILIANSK STAT 05-01-16 12,5 71 950 000 212 924 943 10,06 5,3 333,91 12 850 571 240 247 273 253 097 845 27 322 330 8,38 % 8,38 330 322 27 845 097 253 273 247 240 571 850 12 333,91 5,3 10,06 943 924 212 000 950 71 12,5 05-01-16 STAT BRASILIANSK 3
FOREIGN GOVERNMENT BONDS BONDS GOVERNMENT FOREIGN
LARVIKBANKEN 24-11-08 3,6 5 000 000 5 032 500 4,93 1,78 97,63 18 247 4 881 700 4 899 947 -150 800 0,16 % 5 5 % 0,16 800 -150 947 899 4 700 881 4 247 18 97,63 1,78 4,93 500 032 5 000 000 5 3,6 24-11-08 LARVIKBANKEN
PRBNE ITNRE 80-7 , 2 0 0 2 7 0 ,4 ,2 97 4148 49650 54798 4 0 08 5 % 0,84 000 -49 938 417 25 500 926 24 438 491 99,71 0,42 4,14 500 975 24 000 000 25 3,5 08-06-07 MIDT-NORGE SPAREBANKEN
ER OIKEIT 41-9 ,8 00000 00000 50 26 9,8 532 96370 97902 3630 ,9% 5 % 0,99 300 -306 092 759 29 700 693 29 392 65 98,98 2,69 5,06 000 000 30 000 000 30 4,68 14-12-09 BOLIGKREDITT TERRA
PRBNE S 2-81 46 3 0 0 3 2 0 ,4 ,2 83 4307 95400 00707 6600 ,9% 5 % 0,99 000 -606 027 007 30 000 514 29 027 493 98,38 4,02 5,04 000 120 30 000 000 30 4,65 24-08-11 OST SPAREBANKEN
PRBNE ØE 01-8 , 3 0 0 3 3 0 ,7 , 125 1870 07550 08420 5650 ,2% 5 % 1,02 500 -556 240 884 30 500 775 30 740 108 102,58 1,8 4,87 000 332 31 000 000 30 6,3 10-12-08 MØRE SPAREBANKEN
NKEIT 70-9 , 4 0 0 4 6 0 ,9 ,2 0,7 896 07760 07656 15240 ,5% 5 % 1,35 400 552 -1 586 796 40 600 707 40 986 88 101,77 2,22 5,09 000 260 42 000 000 40 5,8 17-06-09 KREDITT BN
IACA OD BONDS FINANCIAL
SPAREBANKEN MIDT NORGE 16-11-09 3,75 15-02-07 0 0 4,03 0,13 100,16 143 750 0 143 750 0 0,00 % 5 5 % 0,00 0 750 143 0 750 143 100,16 0,13 4,03 0 0 15-02-07 3,75 16-11-09 NORGE MIDT SPAREBANKEN
IESAEAK 00-7 ,9 00-7 0 0 49700 39 01 9,8 754 9 5 50664 5 01 5 % 0,17 050 2 604 026 5 050 999 4 554 27 99,98 0,11 3,97 000 997 4 000 000 5 10-02-07 3,89 10-02-07 SPAREBANK TIME
TRBAD 11-7 ,2 20-7 0 0 76330 41 01 105 1 3 75290 6 3 -040 ,5% 5 % 0,25 400 -80 733 561 7 900 542 7 833 18 100,57 0,19 4,14 300 623 7 000 500 7 12-03-07 4,52 11-12-07 STOREBRAND
RVTAKN 60-7 ,2 60-7 00000 00150 39 02 0, 1 0 1 1 0 1 2 0 -150 ,3% 5 % 0,33 500 -21 600 025 10 000 010 10 600 15 100,1 0,2 3,95 500 031 10 000 000 10 16-03-07 4,32 16-03-07 PRIVATBANKEN
RYGGE-VAALER SPAREBANK 30-03-09 4,1 30-03-07 10 000 000 10 041 000 3,96 0 100,25 2 278 10 024 800 10 027 078 -16 200 0,33 % % 0,33 200 -16 078 027 10 800 024 10 278 2 100,25 0 3,96 000 041 10 000 000 10 30-03-07 4,1 30-03-09 SPAREBANK RYGGE-VAALER 5
NEE PRBN 2-31 40 2-30 1 0 0 1 0 0 ,7 ,2 0,5 3 1 3 0 1 3 3 3 0 03 5 % 0,33 000 35 533 039 10 000 035 10 533 4 100,35 0,22 4,17 000 000 10 000 000 10 23-03-07 4,08 23-03-11 SPAREBANK ANKENES
00 0,33 % 5 % 0,33 00 5 -15 422 083 10 100 005 10 322 78 100,05 0,05 3,92 600 020 10 000 000 10 16-01-07 3,71 16-04-07 SPAREBANK AAKRA OG SKUDENES
RKGSAEAK 00-8 , 1-10 1 0 0 1 2 0 ,5 ,3 0,9 428 00900 01328 280 ,3% 5 % 0,33 800 -2 278 103 10 000 019 10 278 84 100,19 0,03 3,95 800 021 10 000 000 10 10-01-07 3,7 10-01-08 SPAREBANK ØRSKOG
USO PRBN 0-71 36 80-7 00000 00470 40 00 102 600 00040 01640 570 ,3% 5 % 0,33 700 15 400 106 10 400 020 10 000 86 100,2 0,02 4,01 700 004 10 000 000 10 08-01-07 3,6 06-07-10 SPAREBANK AURSKOG
USO PRBN 0-70 37 0-10 1 0 0 1 1 0 ,5 ,1 0,3 270 00280 01550 180 ,4% 5 % 0,34 800 21 550 125 10 800 032 10 750 92 100,33 0,01 3,95 000 011 10 000 000 10 02-01-07 3,71 01-07-08 SPAREBANK AURSKOG
SPAREBANKEN 1 GRUPPEN 14-06-10 3,98 14-03-07 15 000 000 15 052 500 4,13 0,2 100,32 28 192 15 048 750 15 076 942 -3 750 0,50 0,50 750 -3 942 076 15 750 048 15 192 28 100,32 0,2 4,13 500 052 15 000 000 15 14-03-07 3,98 14-06-10 GRUPPEN 1 SPAREBANKEN % 5 %
SI PRBN 1-40 36 50-7 50000 50080 39 00 101 1400 50630 51030 550 ,0% 5 % 0,50 500 15 350 130 15 350 016 15 000 114 100,11 0,04 3,97 850 000 15 000 000 15 15-01-07 3,6 14-04-08 SPAREBANK ASKIM
TRBAD 20-1 ,9 20-7 50000 50000 41 01 107 4 6 1 0 0 1 5 6 1890 ,0% 5 % 0,50 900 108 662 152 15 900 108 15 762 43 100,73 0,16 4,13 000 000 15 000 000 15 02-03-07 3,89 02-09-11 STOREBRAND
LTI 3-80 38 2-20 1 0 0 1 0 0 ,2 ,6 99 6 4 1 8 2 1 5 6 -000 ,0% 5 % 0,60 080 -10 060 050 18 920 989 17 140 60 99,94 0,16 4,22 000 000 18 000 000 18 28-02-07 3,88 31-08-09 GLITNIR
PRBNE ET 71-8 ,5 00-7 00000 00000 42 04 102 2 6 2 4 0 2 6 6 -700 ,6% 5 % 0,66 000 -17 361 068 20 000 043 20 361 25 100,21 0,45 4,22 000 060 20 000 000 20 20-06-07 4,15 17-12-08 VEST SPAREBANKEN
LILLESTRØM SPAREBANK 03-09-09 3,86 05-03-07 20 000 000 20 009 000 4,11 0,17 100,16 57 900 20 031 800 20 089 700 22 800 0,67 0,67 800 22 700 089 20 800 031 20 900 57 100,16 0,17 4,11 000 009 20 000 000 20 05-03-07 3,86 03-09-09 SPAREBANK LILLESTRØM % 5 %
LP PRBN 2-00 37 2-10 2 0 0 2 5 0 ,6 ,6 0,6 5 4 2 3 7 2 8 1 -100 ,0% 5 % 0,70 030 -21 310 184 21 970 032 21 340 151 100,16 0,06 3,96 000 054 21 000 000 21 22-01-07 3,76 22-10-07 SPAREBANK KLEPP
INOSRDT 0-31 39 1-30 2 0 0 2 4 0 , 01 102 367 50050 50417 050 ,3% 5 % 0,83 500 10 167 094 25 500 050 25 667 43 100,2 0,16 4,1 000 040 25 000 000 25 15-03-07 3,93 01-03-10 EIENDOMSKREDITT
PRBNE S 1-30 40 1-30 2 0 0 2 3 0 ,5 , 103 3 9 2 9 0 2 3 9 -550 ,3% 5 % 0,83 500 -35 792 130 25 500 094 25 292 36 100,38 0,2 4,05 000 130 25 000 000 25 16-03-07 4,02 16-03-09 OST SPAREBANKEN
RDTFRNN O PRBNE 0-91 38 0-30 2 0 0 2 8 5 ,8 ,8 0,7 219 90740 91969 9 619 139 29 430 077 29 189 62 100,27 0,18 4,08 950 986 28 000 000 29 09-03-07 3,86 09-09-10 SPAREBANKER FOR KREDITTFORENING 8 09 5 % 0,96 480 0
LP PRBN 2-61 39 2-30 3 0 0 2 8 0 ,6 ,1 0,4 297 00260 00557 760 ,9% 5 % 0,99 600 27 517 045 30 600 012 30 917 32 100,04 0,21 4,16 000 985 29 000 000 30 21-03-07 3,95 21-06-11 SPAREBANK KLEPP
TRBAD 71-7 ,7 90-7 00000 01090 40 02 0,6 402 00800 00202 7 0 10 5 % 1,00 900 -72 092 092 30 000 048 30 092 44 100,16 0,2 4,09 900 120 30 000 000 30 19-03-07 4,07 17-12-07 STOREBRAND
NKEIT 50-1 ,6 10-7 00000 00000 41 02 0,9 583 00790 00373 790 ,0% 5 % 1,00 900 57 703 093 30 900 057 30 803 35 100,19 0,2 4,15 000 000 30 000 000 30 21-03-07 3,96 15-06-11 KREDITT BN
TOLGA OS SPAREBANK 02-06-10 3,82 02-03-07 30 000 000 30 000 000 4,12 0,16 100,07 85 950 30 021 900 30 107 850 21 900 1,00 % % 1,00 900 21 850 107 30 900 021 30 950 85 100,07 0,16 4,12 000 000 30 000 000 30 02-03-07 3,82 02-06-10 SPAREBANK OS TOLGA 5
ADRDT 2-51 37 2-20 3 0 0 2 9 0 ,6 ,5 0,1 1 1 3 3 0 3 5 1 4 0 10 5 % 1,00 400 41 617 152 30 500 034 30 117 118 100,11 0,15 4,06 100 993 29 000 000 30 23-02-07 3,73 23-05-11 LANDKREDITT
ABG SUNDAL COLLIER 15-11-11 4,44 15-02-07 30 000 000 30 000 000 4,8 0,12 99,95 170 200 29 986 500 30 156 700 -13 500 1,00 % % 1,00 500 -13 700 156 30 500 986 29 200 170 99,95 0,12 4,8 000 000 30 000 000 30 15-02-07 4,44 15-11-11 COLLIER SUNDAL ABG 5
HØLAND SPAREBANK 18-08-08 3,92 16-02-07 30 000 000 30 146 400 4,04 0,13 100,34 147 000 30 101 100 30 248 100 -45 300 1,00 % % 1,00 300 -45 100 248 30 100 101 30 000 147 100,34 0,13 4,04 400 146 30 000 000 30 16-02-07 3,92 18-08-08 SPAREBANK HØLAND 5
VNHRDSAEAK 90-7 ,8 90-7 00000 01100 39 00 101 5 3 3 3 0 3 8 3 -950 1,00 500 -79 033 286 30 500 031 30 533 254 100,1 0,03 3,92 000 111 30 000 000 30 09-01-07 3,68 09-07-07 SPAREBANK KVINNHERAD % 5 %
SPAREBANKEN JEVNAKER LUNDER 19-03-10 3,99 19-03-07 31 500 000 31 566 150 4,13 0,21 100,21 41 895 31 564 890 31 606 785 -1 26 -1 785 606 31 890 564 31 895 41 100,21 0,21 4,13 150 566 31 000 500 31 19-03-07 3,99 19-03-10 LUNDER JEVNAKER SPAREBANKEN 0 1,05 % 5 % 1,05 0
ROMSDALS FELLESBANK 15-07-09 3,63 15-01-07 33 000 000 33 122 100 3,95 0,04 100,35 252 890 33 114 180 33 367 070 -7 920 1,10 1,10 920 -7 070 367 33 180 114 33 890 252 100,35 0,04 3,95 100 122 33 000 000 33 15-01-07 3,63 15-07-09 FELLESBANK ROMSDALS % 5 %
PRBNE AA 51-9 ,1 50-7 30000 31050 4 ,4 0, 2540 32960 34510 910 ,1% 5 % 1,11 160 89 110 495 33 680 229 33 430 265 100,7 0,04 4 520 140 33 000 000 33 15-01-07 3,81 15-10-09 RANA SPAREBANKEN
SPAREBANKEN VESTFOLD 22-06-07 3,86 22-03-07 35 000 000 35 021 000 4 0,22 100,01 33 775 35 004 200 35 037 975 -16 800 1,16 % % 1,16 800 -16 975 037 35 200 004 35 775 33 100,01 0,22 4 000 021 35 000 000 35 22-03-07 3,86 22-06-07 VESTFOLD SPAREBANKEN 5
SPAREBANKEN SOGN OG FJORDANE 12-03-12 3,89 12-03-07 35 000 000 35 020 980 4,16 0,19 100,22 75 639 35 077 350 35 152 989 56 3 56 989 152 35 350 077 35 639 75 100,22 0,19 4,16 980 020 35 000 000 35 12-03-07 3,89 12-03-12 FJORDANE OG SOGN SPAREBANKEN 70 1,16 % 5 % 1,16 70
SPAREBANKEN SOGN OG FJORDANE 05-08-09 3,71 05-02-07 35 000 000 35 080 500 4,06 0,1 100,15 198 382 35 052 500 35 250 882 -28 -28 882 250 35 500 052 35 382 198 100,15 0,1 4,06 500 080 35 000 000 35 05-02-07 3,71 05-08-09 FJORDANE OG SOGN SPAREBANKEN 000 1,17 % 5 % 1,17 000
PRBNE LS 1-60 39 2-30 3 0 0 3 2 3 , 02 0,8 630 85080 86710 5 9 12 5 % 1,28 596 -55 190 617 38 840 570 38 350 46 100,18 0,2 4,1 436 626 38 000 500 38 21-03-07 3,94 17-06-09 PLUSS SPAREBANKEN
ADNSAEAK 30-0 ,1 30-7 00000 99000 42 01 9,4 820 99800 00620 1 0 13 5 % 1,33 000 -12 200 056 40 000 978 39 200 78 99,94 0,19 4,21 000 990 39 000 000 40 13-03-07 3,91 13-09-10 SPAREBANK HALDEN
ADVE PRBN 2-50 38 2-20 4 0 0 4 8 0 ,7 ,6 98 1431 99160 00591 1240 1,33 400 -132 911 095 40 600 951 39 311 144 99,88 0,16 4,07 000 084 40 000 000 40 27-02-07 3,82 27-05-09 SPAREBANK SANDSVAER % 5 %
ADVE PRBN 1-51 37 1-20 4 0 0 3 8 0 ,4 ,2 99 1636 99800 01436 13 5 % 1,33 0 356 184 40 000 988 39 356 196 99,97 0,12 4,14 000 988 39 000 000 40 14-02-07 3,76 14-05-10 SPAREBANK SANDSVAER
KPRFNN 0-50 34 0-20 4 0 0 4 0 0 , 01 9,6 0 3 3 8 0 4 9 3 -080 ,3% 5 % 1,33 800 -20 133 190 40 200 985 39 933 204 99,96 0,11 3,9 000 006 40 000 000 40 08-02-07 3,48 08-05-07 EKSPORTFINANS
SANDSVAER SPAREBANK 21-02-11 3,75 21-02-07 40 000 000 40 002 000 4,1 0,14 100,08 166 667 40 032 400 40 199 067 30 400 1,33 % 1,33 400 30 067 199 40 400 032 40 667 166 100,08 0,14 4,1 000 002 40 000 000 40 21-02-07 3,75 21-02-11 SPAREBANK SANDSVAER 5
SPAREBANKEN PLUSS 09-11-10 3,65 09-02-07 40 000 000 40 023 200 4,02 0,11 100,09 210 889 40 035 200 40 246 089 12 000 1,33 % % 1,33 000 12 089 246 40 200 035 40 889 210 100,09 0,11 4,02 200 023 40 000 000 40 09-02-07 3,65 09-11-10 PLUSS SPAREBANKEN 5
EGLN PRBN 0-90 40 0-30 4 0 0 4 9 0 ,9 ,6 0,7 3 0 4 8 0 4 2 0 -0 0 1,3 400 -104 600 322 40 600 187 40 000 135 100,47 0,16 4,19 000 292 40 000 000 40 01-03-07 4,05 01-09-09 SPAREBANK HELGELAND 5 % 4
AK1OL 0-01 35 0-10 4 0 0 3 7 0 ,8 ,1 0,4 5 0 4 5 0 4 1 0 8 0 13 5 % 1,34 000 84 000 411 40 000 058 40 000 353 100,14 0,01 3,98 000 974 39 000 000 40 03-01-07 3,53 03-10-11 OSLO 1 BANK
OU AK 51-9 , 1-30 5 0 0 5 0 0 ,5 , 9,6 444 99800 00244 2 0 16 5 % 1,66 000 -22 444 062 50 000 978 49 444 84 99,96 0,2 4,05 000 000 50 000 000 50 15-03-07 3,8 15-12-09 BANK FOKUS
AVKSAEAK 60-9 , 0-30 5 0 0 4 7 0 ,9 ,8 0,7 3 4 5 3 0 5 6 4 6 0 16 5 % 1,66 000 62 944 168 50 000 037 50 944 131 100,07 0,18 4,09 000 975 49 000 000 50 06-03-07 3,8 06-03-09 SPAREBANK NARVIK
SPAREBANKEN SOGN OG FJORDANE 26-02-10 3,8 26-02-07 50 000 000 50 117 500 4,05 0,15 100,19 179 444 50 097 000 50 276 444 -20 -20 444 276 50 000 097 50 444 179 100,19 0,15 4,05 500 117 50 000 000 50 26-02-07 3,8 26-02-10 FJORDANE OG SOGN SPAREBANKEN 500 1,66 % 5 % 1,66 500
TRBAD 20-9 ,9 20-7 00000 01320 40 01 102 1585 01050 02635 5 5 16 5 % 1,67 750 -52 375 286 50 500 140 50 875 145 100,28 0,16 4,09 250 193 50 000 000 50 02-03-07 3,89 02-09-09 STOREBRAND
SPAREBANKEN SOGN OG FJORDANE 10-08-12 3,76 12-02-07 50 000 000 50 103 500 4,11 0,11 100,2 266 333 50 098 000 50 364 333 -5 5 -5 333 364 50 000 098 50 333 266 100,2 0,11 4,11 500 103 50 000 000 50 12-02-07 3,76 10-08-12 FJORDANE OG SOGN SPAREBANKEN 00 1,67 % 5 % 1,67 00
I 2-80 34 2-20 5 0 0 4 9 0 ,5 ,6 99 6593 99250 05843 1 0 16 5 % 1,68 500 -12 403 588 50 500 982 49 903 605 99,96 0,16 4,05 000 995 49 000 000 50 28-02-07 3,49 28-08-08 FIH
IGRK PRBN 2-41 35 2-10 7 0 0 7 0 0 ,6 ,7 98 4634 98780 03414 1220 2,33 200 -102 194 364 70 800 897 69 394 466 99,85 0,07 4,06 000 000 70 000 000 70 25-01-07 3,58 26-04-11 SPAREBANK RINGERIKE % 5 %
TRBADBN 1-11 36 1-10 7 0 0 7 2 0 ,1 ,4 0,9 7 1 7 1 0 7 9 1 - 0 25 5 % 2,51 500 -7 917 793 75 000 216 75 917 577 100,29 0,04 4,01 500 223 75 000 000 75 15-01-07 3,65 14-01-10 BANK STOREBRAND
PRBNE ODNRE 30-9 ,1 30-7 30000 30390 39 01 9,4 4 4 9 4 2 9 9 6 -600 3, 030 -66 560 395 93 920 947 92 640 447 99,94 0,12 3,99 950 013 93 000 000 93 13-02-07 3,61 13-02-09 NORD-NORGE SPAREBANKEN 9% 5 % 09
OKLEBN 0-41 36 0-10 9 0 0 9 0 0 ,7 ,2 0,3 9 8 9 0 5 9 9 3 4560 ,9% 5 % 3,19 650 405 531 198 96 650 405 95 881 792 100,43 0,02 3,97 000 000 95 000 000 95 08-01-07 3,62 07-04-11 BANK ROSKILDE
NBN 2-41 36 2-10 100000 0 2 0 ,9 ,8 0,2 5 2 103800 0 7 2 1900 ,4% 5 % 3,34 000 189 028 977 100 000 318 100 028 659 100,32 0,08 3,99 000 129 100 000 000 100 29-01-07 3,65 27-04-10 BANK BN
SPAREBANKEN SØR 02-02-09 3,52 02-02-07 120 000 000 119 978 800 3,96 0,09 99,96 692 267 119 958 000 120 650 267 -20 800 3,99 3,99 800 -20 267 650 120 000 958 119 267 692 99,96 0,09 3,96 800 978 119 000 000 120 02-02-07 3,52 02-02-09 SØR SPAREBANKEN % 5 %
KREDITTFORENING FOR SPAREBANKER 01-10-09 3,58 02-01-07 155 000 000 155 145 510 4 0,01 100,13 1 387 250 155 206 150 156 593 4 593 156 150 206 155 250 387 1 100,13 0,01 4 510 145 155 000 000 155 02-01-07 3,58 01-10-09 SPAREBANKER FOR KREDITTFORENING 0 060 ,8% 5 % 5,18 640 60 00
IACA OD BONDS FINANCIAL
COUPON INTEREST MATURITY EFFECTIVE GAIN/LOSS COST PRICE FACE VALUE INTEREST*** UNREALISED SENSITIVITY** MARKET PRICE MARKET VALUE INTEREST RATE RISK CLASS****
ADJUSTMENT PONT ACCURED INTEREST ACCURED INTEREST SHARE OF THE FUND MARKET VALUE INCL.
SKAGEN Avkastning SKAGEN Note 8. Securities portfolio as of 31st December 2006 December 31st of as portfolio Securities 8. Note
64 ANNUAL REPORT 2006 • SKAGEN FUNDS • FUNDS SKAGEN • 2006 REPORT ANNUAL SKAGEN Avkastning SKAGEN
BACK TO CONTENTS TO BACK >>
133 431 317,- NOK is allocated for distribution to unit holders. This will result in a reduction in the unit price equal to the to equal price unit the in reduction a in result will This holders. unit to distribution for allocated is NOK 317,- 431 133 distribution per unit at time of distribution. of time at unit per distribution
Unit price as of 29.12.2006: 128.0571 29.12.2006: of as price Unit
****** For liquidity in the portfolio per 31.12.2006, please refer to balance sheet balance to refer please 31.12.2006, per portfolio the in liquidity For ******
Risk class 6: Industry 6: class Risk
Risk class 5: Bank and financial institutions financial and Bank 5: class Risk
Risk class 4: County and local government local and County 4: class Risk
Risk class 3: Government, and government guaranteed outside the EEA EEA the outside guaranteed government and Government, 3: class Risk
Risk class 2: Government, and government guaranteed within the EEA EEA the within guaranteed government and Government, 2: class Risk
Risk class 1: Supranational organisations Supranational 1: class Risk
***** Securities are divided into six risk classes according to their credit risk. Class one has the lowest, and class six the six class and lowest, the has one Class risk. credit their to according classes risk six into divided are Securities ***** highest credit risk. credit highest
**** Effective interest is the average annual return of an interest bearing security until maturity. until security bearing interest an of return annual average the is interest Effective ****
European Investment Bank are traded via EuroClear and denominated in Turkish lire (TRY). lire Turkish in denominated and EuroClear via traded are Bank Investment European
Brazilian government bonds are traded in Luxembourg and are denominated in BRL , Icelandic government are traded in Reykjarvik Reykjarvik in traded are government Icelandic , BRL in denominated are and Luxembourg in traded are bonds government Brazilian and are denominated in Icelandic kroner (ISK). World Bank and the the and Bank World (ISK). kroner Icelandic in denominated are and
*** With the exception of foreign government bonds, all securities are traded on the Norwegian market. The Mexican government government Mexican The market. Norwegian the on traded are securities all bonds, government foreign of exception the With *** bonds are traded in Mexico and denominated in Mexican Pesos (MXN), the the (MXN), Pesos Mexican in denominated and Mexico in traded are bonds
** Interest rate sensitivity is a simplified expression of how much the price of the security will change if the interest rate interest the if change will security the of price the much how of expression simplified a is sensitivity rate Interest ** changes by one percentage point. percentage one by changes
* Effective underlying return adjusted for management fee. management for adjusted return underlying Effective *
neetrt estvt* 1.37 sensitivity** rate Interest
Effective return to clients* 5.15 % 5.15 clients* to return Effective
Effective underlying return 5.65 % 5.65 return underlying Effective
PORTFOLIO KEY FIGURES FIGURES KEY PORTFOLIO
Continuation Continuation SKAGEN Avkastning SKAGEN Note 8. Securities portfolio as of 31st December 2006 December 31st of as portfolio Securities 8. Note
65 SKAGEN Avkastning Avkastning SKAGEN • ANNUAL REPORT 2006 • SKAGEN FUNDS SKAGEN • 2006 REPORT ANNUAL •
BACK TO CONTENTS TO BACK >>
distribution per unit at time of distribution. of time at unit per distribution the to equal price unit the in reduction a in result will This holders. unit to distribution for allocated is NOK 825,- 013 62
Unit price as of 29.12.2006: 103.7699 29.12.2006: of as price Unit
****** For liquidity in the portfolio per 31.12.2006, please refer to balance sheet balance to refer please 31.12.2006, per portfolio the in liquidity For ******
Risk class 6: Industry 6: class Risk
Risk class 5: Bank and financial institutions financial and Bank 5: class Risk
Risk class 4: County and local government local and County 4: class Risk
Risk class 3: Government, and government guaranteed outside the EEA EEA the outside guaranteed government and Government, 3: class Risk
Risk class 2: Government, and government guaranteed within the EEA EEA the within guaranteed government and Government, 2: class Risk
Risk class 1: Supranational organisations Supranational 1: class Risk
highest credit risk. credit highest the six class and lowest, the has one Class risk. credit their to according classes risk six into divided are Securities ****
*** Effective interest is the average annual return of an interest bearing security until maturity. until security bearing interest an of return annual average the is interest Effective ***
All securities are traded in the Norwegian market. Norwegian the in traded are securities All
changes by one percentage point. percentage one by changes rate interest the if change will security the of price the much how of expression simplified a is sensitivity rate Interest **
* Effective underlying return adjusted for management fee. management for adjusted return underlying Effective *
neetrt estvt* 0.13 sensitivity** rate Interest
Effective return to clients* 4.01 % 4.01 clients* to return Effective
Effective underlying return 4.26 % 4.26 return underlying Effective
OTOI E IUE FIGURES KEY PORTFOLIO
TOTAL EQUITY PORTFOLIO***** 1 990 120 399 15 579 277 1 987 636 105 2 003 215 382 -2 484 294 91,11 % 91,11 294 484 -2 382 215 003 2 105 636 987 1 277 579 15 399 120 990 1 PORTFOLIO***** EQUITY TOTAL
LVTO 0-30 35 4000 4 8 0 40 01 9,1 9 5 4 5 0 4 5 5 -910 ,7% 6 % 2,07 100 -29 351 455 45 700 957 44 651 497 99,91 0,18 4,04 800 986 44 45000000 3,51 07-03-07 THON OLAV
MIEEDM 00-7 5000 5 0 0 41 01 9,9 024 99550 00574 450 ,8% 6 % 2,28 500 -4 774 055 50 500 995 49 274 60 99,99 0,14 4,12 000 000 50 50000000 4 20-02-07 EIENDOM AMFI
NUTYNTS NOTES INDUSTRY
ETOPADKMUAEKATESA 0-30 38 7000 0 5 40 01 9,7 134 9 5 75874 330 ,4% 6 % 0,34 300 -3 754 518 7 450 497 7 304 21 99,97 0,17 4,08 750 500 7 7500000 3,84 05-03-07 KRAFTSELSKAP KOMMUNALE VEST-OPPLAND
YSFLEEA 0-50 39 8000 0 7 42 03 9, 2 9 79240 1 9 - 7 03 6 % 0,36 376 -9 598 015 8 400 992 7 198 23 99,9 0,33 4,25 776 001 8 8000000 3,92 03-05-07 AS TYSSEFALDENE
ADE NRIEK 70-7 , 8000 0 0 39 01 99 4 9 79790 4 1 - 8 03 6 % 0,37 480 -3 712 041 8 920 997 7 792 43 99,97 0,1 3,98 400 001 8 8000000 3,7 07-02-07 ENERGIVERK VALDRES
AJR RF 2-30 35 8000 9 6 40 02 9,9 911 9 0 80031 290 ,7% 6 % 0,37 960 -2 341 070 8 200 991 7 141 79 99,89 0,21 4,06 160 994 7 8000000 3,54 20-03-07 KRAFT TAFJORD
ODØEEEG 2-20 37 9000 0 3 40 01 9,7 976 9 3 90686 333 ,1% 6 % 0,41 303 -3 816 026 9 030 997 8 786 29 99,97 0,16 4,02 333 000 9 9000000 3,77 28-02-07 ENERGI NORDMØRE
SFL NRI 50-7 ,8 0000 00000 ,8 ,6 99 889 9 0 1 3 9 - 0 04 6 % 0,46 900 -9 999 038 10 100 990 9 899 48 99,9 0,36 4,18 000 000 10 10000000 3,88 15-05-07 ENERGI ØSTFOLD
US RF 2-30 36 0000 9 1 40 02 9,9 561 8 0 1 8 7 - 1 04 6 % 0,46 210 -2 971 084 10 300 989 9 671 95 99,89 0,23 4,07 510 991 9 10000000 3,6 26-03-07 KRAFT TUSSA
US RF 1-40 37 4000 40000 ,2 ,9 98 1509 39360 40869 1 8 06 6 % 0,64 380 -16 639 088 14 620 983 13 019 105 99,88 0,29 4,12 000 000 14 14000000 3,7 18-04-07 KRAFT TUSSA
US RF 1-50 38 6000 59722 ,6 ,5 98 8 5 1 8 8 1 6 3 -592 ,3% 6 % 0,73 952 -15 233 066 16 280 981 15 953 84 99,88 0,35 4,16 232 997 15 16000000 3,8 10-05-07 KRAFT TUSSA
SA RF 2-20 37 2000 2 0 0 40 01 9,6 496 49100 50596 900 ,4% 6 % 1,14 000 -9 986 075 25 000 991 24 986 84 99,96 0,16 4,02 000 000 25 25000000 3,76 28-02-07 KRAFT ISTAD
RDISA NRI 90-7 , 3000 2 9 7 41 02 9,6 161 99890 00051 920 ,7% 6 % 1,37 270 -9 571 030 30 900 988 29 671 41 99,96 0,21 4,13 170 998 29 30000000 3,9 19-03-07 ENERGI FREDRIKSTAD
RDISA NRI 30-7 ,3 5000 49915 ,7 ,9 99 6 0 3 8 5 3 5 5 -275 ,9% 6 % 1,59 775 -12 457 052 35 350 986 34 107 66 99,96 0,19 4,07 125 999 34 35000000 3,83 13-03-07 ENERGI FREDRIKSTAD
UNODLN RF 1-30 35 4000 3 6 6 40 02 98 4154 99360 03514 1 6 18 6 % 1,84 360 -11 184 365 40 600 953 39 584 411 99,88 0,2 4,09 960 964 39 40000000 3,51 15-03-07 KRAFT SUNNHORDALAND
-OEEG 1-30 39 0000 99430 , 02 9,7 410 99450 00860 980 ,8% 6 % 2,28 800 -9 610 048 50 500 984 49 110 64 99,97 0,21 4,1 300 994 49 50000000 3,9 19-03-07 ENERGI E-CO
GE NRI 00-7 ,4 0000 99920 ,6 ,8 99 3795 99300 03095 1 5 22 6 % 2,29 250 -16 945 370 50 000 983 49 945 387 99,97 0,08 3,96 250 999 49 50000000 3,54 30-01-07 ENERGI AGDER
OE EEAINNTS NOTES GENERATION POWER
ER IAS 10-7 ,5 5000 50000 ,7 ,4 99 6 8 1 9 5 1 5 3 - 5 06 5 % 0,68 850 -5 438 057 15 150 994 14 288 63 99,96 0,14 4,17 000 000 15 15000000 3,85 21-02-07 FINANS TERRA
AK1OL 2-10 38 2000 1 9 0 39 00 10 135 00000 00135 0 09 5 % 0,91 400 1 315 021 20 000 000 20 315 21 100 0,06 3,94 600 998 19 20000000 3,89 22-01-07 OSLO 1 BANK
IACA OE NOTES FINANCIAL
IE 90-7 , 1000 1 0 0 40 01 9,6 152 9 0 1 3 6 - 0 04 6 % 0,46 100 -4 462 037 10 900 995 9 562 41 99,96 0,14 4,03 000 000 10 10000000 3,7 19-02-07 TINE
INOSPR 90-7 ,5 0000 00000 ,6 ,4 99 489 9 0 1 4 4 - 0 04 6 % 0,46 800 -9 049 045 10 200 990 9 849 54 99,9 0,34 4,16 000 000 10 10000000 3,85 09-05-07 EIENDOMSSPAR
HNHLIG 40-7 ,2 0000 9 0 40 02 99 0 5 99960 00373 990 ,6% 6 % 0,46 900 -9 753 093 10 600 989 9 153 104 99,9 0,2 4,05 500 999 9 10000000 3,52 14-03-07 HOLDING THON
INOSPR 40-7 ,6 0000 9 2 40 02 99 0 3 99980 00517 420 ,6% 6 % 0,46 220 -4 137 095 10 800 989 9 337 105 99,9 0,2 4,08 020 994 9 10000000 3,56 14-03-07 EIENDOMSSPAR
TE TØ 0-10 33 0000 9 7 39 00 9,9 6 3 99880 01066 3 04 6 % 0,46 230 1 636 160 10 800 998 9 836 161 99,99 0,02 3,91 570 997 9 10000000 3,3 05-01-07 STRØM & STEEN
EDKE 60-7 ,5 5000 50000 ,9 ,3 99 6 4 1 9 5 1 6 9 - 5 06 6 % 0,69 050 -4 299 065 15 950 995 14 349 69 99,97 0,13 3,99 000 000 15 15000000 3,75 16-02-07 VEIDEKKE
IE 20-7 ,3 0000 00000 ,8 ,9 99 3 2 1 9 0 2 3 2 - 0 09 6 % 0,91 800 -7 126 032 20 200 992 19 926 39 99,96 0,19 4,08 000 000 20 20000000 3,83 12-03-07 TINE
OGBRGUPN 10-7 ,2 0000 99850 ,7 ,4 99 8 3 1 9 0 2 7 3 - 0 09 6 % 0,91 700 -7 334 072 20 800 990 19 534 81 99,95 0,14 4,07 500 998 19 20000000 3,72 21-02-07 KONGSBERGGRUPPEN
TE TØ 0-30 35 0000 99660 ,3 ,6 99 2205 99260 02465 400 ,2% 6 % 0,92 020 -4 655 214 20 600 982 19 055 232 99,91 0,16 4,03 620 986 19 20000000 3,5 01-03-07 STRØM & STEEN
NR INO 1-20 33 2000 1 7 8 39 01 9,1 7 0 1 8 0 2 5 0 370 ,3% 6 % 0,93 720 3 808 354 20 000 983 19 808 371 99,91 0,12 3,98 280 979 19 20000000 3,31 12-02-07 EIENDOM ENTRA
A 1-20 39 0000 99400 ,5 ,3 99 4506 99720 04226 0 09 6 % 0,93 200 3 296 472 20 200 987 19 096 485 99,94 0,13 4,35 000 984 19 20000000 3,9 16-02-07 SAS
HNHLIG 60-7 ,5 0000 99856 ,7 , 9,6 5 3 2 8 0 3 3 3 - 1 13 6 % 1,38 416 -1 032 238 30 100 987 29 932 250 99,96 0,1 3,97 516 988 29 30000000 3,55 06-02-07 HOLDING THON
TE TØ 2-30 36 3000 2 9 8 40 02 9,1 8 6 2 7 0 3 5 6 -320 ,8% 6 % 1,38 280 -23 362 258 30 800 971 29 562 286 99,91 0,23 4,08 080 995 29 30000000 3,67 27-03-07 STRØM & STEEN
LVTO 2-40 37 3000 3 8 5 41 03 9,8 3 1 3 5 0 3 9 1 -270 ,0% 6 % 1,60 750 -22 810 191 35 700 958 34 110 233 99,88 0,31 4,13 450 981 34 35000000 3,74 27-04-07 THON OLAV
OGBRGUPN 30-7 ,3 0000 00000 ,3 , 9,5 851 99200 00051 1 0 18 6 % 1,82 000 -18 581 030 40 000 982 39 581 48 99,95 0,3 4,23 000 000 40 40000000 4,03 23-04-07 KONGSBERGGRUPPEN
RL 10-7 ,5 0000 99840 ,8 ,3 99 8 9 3 9 0 4 7 9 -0 18 6 % 1,82 -800 792 079 40 600 997 39 192 82 99,99 0,03 3,98 400 998 39 40000000 3,75 11-01-07 ORKLA
ETNEEDM 0-20 36 4000 3 9 0 39 00 9,7 3 0 3 8 0 4 2 0 - 0 18 6 % 1,83 200 -8 800 224 40 800 988 39 000 236 99,97 0,09 3,98 000 997 39 40000000 3,65 02-02-07 EIENDOM REITAN
IE 50-7 ,6 0000 99270 ,5 ,7 99 2132 99920 02052 350 ,3% 6 % 1,83 500 -3 592 250 40 200 989 39 392 261 99,97 0,07 3,95 700 992 39 40000000 3,56 25-01-07 TINE
OTNNRE 2-10 35 0000 99670 ,5 ,6 99 3352 99880 03232 790 ,4% 6 % 1,84 920 -7 362 372 40 800 988 39 562 383 99,97 0,06 3,95 720 996 39 40000000 3,5 22-01-07 NORGE POSTEN
IBR 70-7 ,2 0000 98680 ,4 ,1 96 8165 98680 07845 1 0 18 6 % 1,85 000 -10 405 748 40 800 876 39 605 871 99,69 0,31 4,14 800 886 39 40000000 3,22 27-04-07 RIEBER
OGSRPE 1-10 34 5000 5 0 0 39 00 9,8 0 5 4 8 0 5 9 5 -640 ,0% 6 % 2,30 400 -16 952 495 50 500 988 49 452 507 99,98 0,04 3,94 900 004 50 50000000 3,43 15-01-07 NORGESGRUPPEN
NR INO 1-10 3 0000 99250 ,2 ,3 99 14894 99400 14294 140 ,4% 6 % 2,34 450 51 904 442 51 000 984 49 904 458 1 99,97 0,03 3,92 550 932 49 50000000 3 10-01-07 EIENDOM ENTRA
OTNNRE 2-20 35 0000 99720 ,2 ,6 99 7198 99960 06158 760 ,6% 6 % 2,76 620 -7 518 651 60 600 949 59 918 701 99,92 0,16 4,02 220 957 59 60000000 3,5 28-02-07 NORGE POSTEN
NUTILNTS NOTES INDUSTRIAL
ASUDAA 60-7 ,5 8000 83770 ,8 ,6 0,3 9 4 2 0 0 2 0 4 -7 2 13 6 % 1,33 320 -173 345 302 29 400 204 28 945 097 1 100,73 0,36 4,18 720 377 28 28000000 6,25 16-05-07 ASA HAFSLUND
OE EEAINNTS NOTES GENERATION POWER
NOTES NOTES
RM RF 2-40 42 2-10 3000 3 3 2 39 00 102 2183 00270 02453 6 2 13 6 % 1,38 425 -68 533 294 30 700 062 30 833 231 100,21 0,08 3,96 125 131 30 30000000 29-01-07 4,28 27-04-07 KRAFT TROMS
OE EEAINBNS BONDS GENERATION POWER
OGN OES 71-7 ,2 90-7 1000 10000 ,6 , 9,6 652 09260 10922 730 ,6% 6 % 0,96 350 -7 202 029 21 650 992 20 552 36 99,96 0,2 5,06 000 000 21 21000000 19-03-07 4,82 17-12-07 HOTELS NORGANI
N S 2-10 41 2-20 2000 2 5 0 47 01 9,7 267 49370 50647 620 ,4% 6 % 1,14 250 -6 417 036 25 750 943 24 667 92 99,77 0,16 4,72 000 950 24 25000000 28-02-07 4,17 29-11-07 ASA DNO
NR INO 0-30 36 0-30 10000 99060 ,3 ,6 99 2450 99400 0 2 0 -660 ,6% 6 % 4,56 640 -16 500 228 100 000 954 99 500 274 99,95 0,16 4,03 640 970 99 100000000 02-03-07 3,66 02-03-07 EIENDOM ENTRA
KRAA 50-7 ,5 50-7 5000 112160 ,6 ,7 0,2 9 1 103850 5 1 1 -2 8 68 6 % 6,86 180 -923 917 918 150 500 328 150 417 590 100,22 0,17 4,36 680 251 151 150000000 05-03-07 5,45 05-03-07 ASA AKER
TE TØ 1-90 38 1-30 1000 99900 , 02 99 1 6 99570 00277 330 ,6% 6 % 0,46 300 -3 767 012 10 700 995 9 067 17 99,96 0,2 4,1 000 999 9 10000000 15-03-07 3,84 14-09-07 STRØM & STEEN
O S 1-10 56 1-20 2500 2 3 6 43 ,3 0,6 4 3 2 7 8 2 2 2 -935 ,5% 6 % 0,95 375 -59 922 925 20 185 778 20 737 147 101,36 0,13 4,3 560 837 20 20500000 15-02-07 5,64 15-11-07 ASA DOF
TE TØ 1-40 42 1-10 2000 2 7 4 39 00 100 2449 30550 32999 7 2 10 6 % 1,06 026 -74 939 209 23 520 005 23 419 204 100,02 0,05 3,95 546 079 23 23000000 16-01-07 4,21 16-04-07 STRØM & STEEN
OO RU 0-00 51 0-10 4000 4 1 0 40 00 110 5960 24940 29910 1510 ,5% 6 % 1,95 120 -155 160 979 42 480 459 42 680 519 101,09 0,02 4,07 600 614 42 42000000 05-01-07 5,12 05-10-07 GROUP COLOR
KRYRS 21-7 ,1 20-7 0000 20760 ,8 ,4 0,8 8 0 6 0 0 6 9 0 -3 8 28 6 % 2,85 880 -430 800 594 62 800 606 61 000 988 102,68 0,04 4,18 680 037 62 60000000 12-01-07 7,41 12-10-07 YARDS AKER
EEO 2-80 36 2-20 7000 6 6 0 40 01 9,4 8 9 6 6 0 7 5 9 - 0 32 6 % 3,20 600 -8 192 250 70 800 960 69 392 289 99,94 0,14 4,03 400 969 69 70000000 20-02-07 3,63 20-08-07 TELENOR
EEO 0-20 44 0-20 7500 7 0 2 39 01 0,3 4 9 7 2 3 8 6 2 -7 9 36 6 % 3,64 190 -179 520 067 80 030 527 79 490 540 100,03 0,1 3,98 220 706 79 79500000 05-02-07 4,45 05-02-07 TELENOR
A 1-10 43 1-10 8000 8 0 8 43 ,5 99 7718 29830 37558 1 0 38 6 % 3,81 601 -12 558 725 83 380 988 82 178 737 99,99 0,05 4,3 981 000 83 83000000 19-01-07 4,38 19-01-07 SAS
NUTILBNS BONDS INDUSTRIAL
PRBNE ØE 70-7 ,1 70-7 000 50500 ,6 ,5 0,2 014 1 0 50634 880 ,3% 5 % 0,23 800 -8 304 066 5 200 016 5 104 50 100,32 0,05 4,06 000 025 5 5000000 17-01-07 4,81 17-04-07 MØRE SPAREBANKEN
ADE PRBN 2-60 53 10-7 000 60680 ,8 ,1 0,9 1 60550 4 3 -120 ,7% 5 % 0,27 280 -11 237 045 6 520 035 6 717 9 100,59 0,21 4,18 800 046 6 6000000 21-03-07 5,3 20-06-07 SPAREBANK SANDNES
TESAEAK 80-7 ,7 60-7 000 70550 ,5 ,1 0,3 051 0 9 70941 660 ,2% 5 % 0,32 650 -6 431 019 7 890 008 7 541 10 100,13 0,21 4,05 540 015 7 7000000 16-03-07 4,17 18-06-07 SPAREBANK ETNE
E RSEJL PRBN 1-50 39 1-20 5000 0 1 4 ,2 0,8 579 0 5 50999 395 ,3% 5 % 0,23 965 -3 969 029 5 250 004 5 719 25 100,08 0,12 4 215 008 5 5000000 14-02-07 3,94 14-05-07 SPAREBANK PRESTEGJELD NES
NBN 2-80 36 2-20 10000 0 9 0 40 01 9,5 1 1 199940 1 6 1 -010 ,2 5 5,02 100 -50 314 364 110 400 949 109 914 414 99,95 0,15 4,05 500 999 109 110000000 26-02-07 3,67 24-08-07 BANK BN
FINANCIAL BONDS BONDS FINANCIAL
FLOATING RATE SECURITIES SECURITIES RATE FLOATING
COUPON INTEREST MATURITY EFFECTIVE GAIN/LOSS COST PRICE FACE VALUE INTEREST*** UNREALISED SENSITIVITY** MARKET PRICE MARKET VALUE INTEREST RATE RISK CLASS****
ADJUSTMENT PONT ACCURED INTEREST ACCURED INTEREST SHARE OF THE FUND MARKET VALUE INCL.
SKAGEN Høyrente SKAGEN Note 8. Securities portfolio as of 31st December 2006 December 31st of as portfolio Securities 8. Note
66 ANNUAL REPORT 2006 • SKAGEN FUNDS • FUNDS SKAGEN • 2006 REPORT ANNUAL SKAGEN Høyrente SKAGEN
BACK TO CONTENTS TO BACK >>
distribution per unit at time of distribution. of time at unit per distribution the to equal price unit the in reduction a in result will This holders. unit to distribution for allocated is NOK 795,- 606 10
Unit price as of 29.12.2006: 102.6155 29.12.2006: of as price Unit
****** For liquidity in the portfolio per 31.12.2006, please refer to balance sheet balance to refer please 31.12.2006, per portfolio the in liquidity For ******
Risk class 6: Industry 6: class Risk
Risk class 5: Bank and financial institutions financial and Bank 5: class Risk
Risk class 4: County and local government local and County 4: class Risk
Risk class 3: Government, and government guaranteed outside the EEA EEA the outside guaranteed government and Government, 3: class Risk
Risk class 2: Government, and government guaranteed within the EEA EEA the within guaranteed government and Government, 2: class Risk
Risk class 1: Supranational organisations Supranational 1: class Risk
ighest credit risk. credit ighest h the six class and lowest, the has one Class risk. credit their to according classes risk six into divided are Securities ****
*** Effective interest is the average annual return of an interest bearing security until maturity. until security bearing interest an of return annual average the is interest Effective ***
All securities are traded in the Norwegian market. Norwegian the in traded are securities All
** Interest rate sensitivity is a simplified expression of how much the price of the security will change if the interest rate interest the if change will security the of price the much how of expression simplified a is sensitivity rate Interest ** changes by one percentage point. percentage one by changes
* Effective underlying return adjusted for management fee. management for adjusted return underlying Effective *
neetrt estvt* 0.23 sensitivity** rate Interest
Effective return to clients* 4.09 % 4.09 clients* to return Effective
Effective underlying return 4.24 % 4.24 return underlying Effective
OTOI E IUE FIGURES KEY PORTFOLIO
TOTAL EQUITY PORTFOLIO***** 331 837 487 3 916 190 330 464 150 334 380 340 -1 373 337 93,53 % % 93,53 337 373 -1 340 380 334 150 464 330 190 916 3 487 837 331 PORTFOLIO***** EQUITY TOTAL
ØTR PRBN 1-30 37 0 0 49835 40 01 9,6 1 8 49820 0 8 15 ,0% 5 % 1,40 -175 584 008 5 200 998 4 384 10 99,96 0,19 4,02 375 998 4 000 000 5 3,79 12-03-07 SPAREBANK NØTTERØ
RNSAEAK 80-7 ,1 1 0 0 99990 38 00 10 2 9 99960 00395 -0 28 5 % 2,80 -300 995 023 10 600 999 9 395 24 100 0,03 3,89 900 999 9 000 000 10 3,71 08-01-07 SPAREBANK GRAN
PRBNE ODNRE 50-7 ,5 1 0 0 1 2 5 ,6 ,2 0,2 6449 00180 06629 -8 5 2 050 -189 279 676 10 800 031 10 479 644 100,32 0,12 3,86 850 220 10 000 000 10 7,15 05-02-07 NORD-NORGE SPAREBANKEN 9 5 % ,99
BS 90-7 ,7 1 0 0 1 0 0 ,5 ,5 0 745 49980 50735 -5 42 5 % 4,20 -150 345 017 15 850 999 14 495 17 100 0,05 3,95 000 000 15 000 000 15 3,87 19-01-07 OBOS
PRBN OIKEIT 60-7 , 50000 49365 38 00 9,7 1802 49560 51372 205 4,23 025 2 732 133 15 650 995 14 082 138 99,97 0,07 3,89 625 993 14 000 000 15 3,5 26-01-07 BOLIGKREDITT 1 SPAREBANK % 5 %
PRBNE ØE 51-7 ,9 2 0 0 2 7 4 ,7 ,4 97 1 9 2 4 8 2 5 7 2 6 58 5 % 5,89 460 -26 972 057 21 080 947 20 892 110 99,75 0,84 4,47 540 973 20 000 000 21 4,19 15-11-07 MØRE SPAREBANKEN
TRBADBN 1-20 41 70000 6 0 ,5 ,2 95 108 7 1 69188 1 1 19 5 % 1,95 710 10 818 981 6 810 970 6 008 11 99,58 0,92 4,55 100 960 6 000 000 7 4,1 17-12-07 BANK STOREBRAND
ADRDT 3-10 53 60000 61870 45 08 107 240 61290 61530 -570 ,3% 5 % 4,53 760 -25 390 185 16 960 112 16 430 72 100,71 0,88 4,52 720 138 16 000 000 16 5,33 30-11-07 LANDKREDITT
PRBNE ET 11-7 , 00000 97240 44 08 88 0 1 1 7 0 1 7 1 1 0 55 5 % 5,56 600 -14 718 879 19 800 777 19 918 101 98,89 0,8 4,46 400 792 19 000 000 20 3,1 01-11-07 VEST SPAREBANKEN
IACA OE NOTES FINANCIAL
NOTES NOTES
OSESA 1-10 67 00000 10100 41 00 101 4 8 3 3 0 3 7 8 - 4 0 89 2 % 8,94 100 047 -1 681 975 31 900 033 30 781 941 1 100,11 0,04 4,12 000 081 31 000 000 30 6,75 15-01-07 STAT NORSKE
OENETBNS BONDS GOVERNMENT
SKUDENES OG AAKRA SPAREBANK 29-01-07 3,89 29-01-07 2 000 000 2 009 060 3,95 0,08 99,98 13 399 1 999 620 2 013 019 -9 -9 019 013 2 620 999 1 399 13 99,98 0,08 3,95 060 009 2 000 000 2 29-01-07 3,89 29-01-07 SPAREBANK AAKRA OG SKUDENES 440 0,56 % 5 % 0,56 440
TESAEAK 80-7 ,7 60-7 50000 0 0 ,5 ,1 0,3 759 0 5 50389 630 ,0% 5 % 1,40 350 6 879 013 5 350 006 5 529 7 100,13 0,21 4,05 000 000 5 000 000 5 16-03-07 4,17 18-06-07 SPAREBANK ETNE
NKEIT 40-7 ,7 60-7 50000 9 5 ,5 ,5 99 880 9 0 50650 - 5 14 5 % 1,40 850 -1 560 016 5 700 997 4 860 18 99,95 0,15 4,05 550 999 4 000 000 5 26-02-07 3,67 24-08-07 KREDITT BN
OPDAL SPAREBANK 10-05-07 3,91 12-02-07 5 000 000 5 014 500 3,97 0,11 100,09 27 696 5 004 400 5 032 096 -10 100 1,41 % 1,41 100 -10 096 032 5 400 004 5 696 27 100,09 0,11 3,97 500 014 5 000 000 5 12-02-07 3,91 10-05-07 SPAREBANK OPDAL 5
SI PRBN 1-40 36 50-7 50000 0 5 ,7 ,4 0,1 3 0 50540 4 5 20 ,1% 5 % 1,41 -200 450 043 5 450 005 5 000 38 100,11 0,04 3,97 650 005 5 000 000 5 15-01-07 3,6 14-04-08 SPAREBANK ASKIM
VNHRDSAEAK 90-7 ,8 90-7 50000 9 5 ,2 ,3 0, 242 0 5 50762 800 1,41 000 8 672 047 5 250 005 5 422 42 100,1 0,03 3,92 250 997 4 000 000 5 09-01-07 3,68 09-07-07 SPAREBANK KVINNHERAD % 5 %
GJERPEN OG SOLUM 08-02-07 3,86 08-02-07 6 000 000 6 019 200 3,98 0,11 99,97 34 097 5 998 500 6 032 597 -20 700 1,69 % 1,69 700 -20 597 032 6 500 998 5 097 34 99,97 0,11 3,98 200 019 6 000 000 6 08-02-07 3,86 08-02-07 SOLUM OG GJERPEN 5
SAUDA SPAREBANK 28-04-08 3,69 29-01-07 7 500 000 7 499 850 3,99 0,08 100,15 47 662 7 511 250 7 558 912 11 400 2,11 % % 2,11 400 11 912 558 7 250 511 7 662 47 100,15 0,08 3,99 850 499 7 000 500 7 29-01-07 3,69 28-04-08 SPAREBANK SAUDA 5
RVTAKN 60-7 ,2 60-7 80000 0 0 ,5 , 101 1 8 80800 2 8 0 22 5 % 2,24 000 8 480 020 8 000 008 8 480 12 100,1 0,2 3,95 000 000 8 000 000 8 16-03-07 4,32 16-03-07 PRIVATBANKEN
ODAL SPAREBANK 24-09-07 4,1 23-03-07 10 000 000 10 019 150 4,07 0,22 100,02 4 556 10 001 600 10 006 156 -17 550 2,80 2,80 550 -17 156 006 10 600 001 10 556 4 100,02 0,22 4,07 150 019 10 000 000 10 23-03-07 4,1 24-09-07 SPAREBANK ODAL % 5 %
N O 0-30 35 0-30 00000 9 5 ,5 ,7 99 680 9 0 1 2 5 330 ,0% 5 % 2,80 350 -3 250 022 10 400 995 9 850 26 99,95 0,17 3,95 750 998 9 000 000 10 02-03-07 3,58 02-03-07 NOR DNB
ORKDAL SPAREBANK 10-09-07 4 12-03-07 10 000 000 10 018 800 4,04 0,19 100,13 22 222 10 012 800 10 035 022 -6 000 2,81 2,81 000 -6 022 035 10 800 012 10 222 22 100,13 0,19 4,04 800 018 10 000 000 10 12-03-07 4 10-09-07 SPAREBANK ORKDAL % 5 %
HARSTAD SPAREBANK 02-03-09 3,86 01-03-07 10 000 000 10 024 000 4,13 0,16 100,14 32 167 10 013 600 10 045 767 -10 400 400 -10 767 045 10 600 013 10 167 32 100,14 0,16 4,13 000 024 10 000 000 10 01-03-07 3,86 02-03-09 SPAREBANK HARSTAD ,1% 5 % 2,81
UNA PRBN 1-10 38 20-7 1 0 0 1 1 0 , 01 101 073 00080 00153 - 0 2,8 700 -8 533 061 10 800 010 10 733 50 100,11 0,11 4,1 500 019 10 000 000 10 12-02-07 3,8 11-11-08 SPAREBANK SUNNDAL 5 % 1
RBN 1-10 34 1-10 00000 9 5 ,3 ,5 99 185 9 0 1 6 7 320 ,2% 5 % 2,82 250 -3 875 067 10 000 996 9 875 71 99,96 0,05 3,93 250 999 9 000 000 10 17-01-07 3,45 17-01-08 BANK SR
EB PRBN 1-10 36 1-10 00000 00600 39 00 101 354 00610 00964 1 0 2,8 100 10 694 099 10 100 016 10 594 83 100,16 0,03 3,95 000 006 10 000 000 10 10-01-07 3,67 10-01-08 SPAREBANK SELBU 5 % 2
TRBADBN 2-90 39 80-7 1 0 0 1 9 9 ,5 ,3 99 2 1 9 7 1 0 9 8 36 5 % 3,64 780 795 002 13 570 998 12 225 4 99,99 0,23 4,05 790 997 12 000 000 13 28-03-07 3,9 28-09-07 BANK STOREBRAND
NBN 1-60 38 1-30 0 0 39940 41 01 9,4 849 9 4 40599 - 6 11 5 % 1,12 960 -1 929 005 4 440 997 3 489 8 99,94 0,19 4,15 400 999 3 000 000 4 12-03-07 3,82 11-06-08 BANK BN
NBN 2-80 36 2-20 0 0 49850 40 01 9,5 1 6 49770 1 6 80 ,0% 5 % 1,40 -800 560 016 5 700 997 4 860 18 99,95 0,15 4,05 500 998 4 000 000 5 26-02-07 3,67 24-08-07 BANK BN
ILSRMSAEAK 10-7 ,2 10-7 90000 9 2 ,1 ,3 99 120 9 1 90840 - 1 2,5 017 -1 490 068 9 210 997 8 280 71 99,97 0,03 3,91 227 998 8 000 000 9 11-01-07 3,52 11-01-07 SPAREBANK LILLESTRØM 5 % 4
HOLLA OG LUNDE SPAREBANK 05-02-07 3,97 05-02-07 10 000 000 10 012 870 3,96 0,1 99,99 60 653 9 998 900 10 059 553 -13 -13 553 059 10 900 998 9 653 60 99,99 0,1 3,96 870 012 10 000 000 10 05-02-07 3,97 05-02-07 SPAREBANK LUNDE OG HOLLA 970 2,81 % 5 % 2,81 970
E RSEJL PRBN 1-50 39 1-20 00000 00500 4 ,2 0,8 5 3 1 0 0 1 5 3 -16 939 059 10 500 008 10 439 51 100,08 0,12 4 000 025 10 000 000 10 14-02-07 3,94 14-05-07 SPAREBANK PRESTEGJELD NES 50 ,1% 5 % 2,81 500
LKRSAEAK 51-7 ,2 50-7 1 0 0 1 1 8 ,9 ,4 0,3 9 4 1 1 6 1 0 0 130 3, 320 -1 600 109 12 360 015 12 240 94 100,13 0,04 3,99 680 016 12 000 000 12 15-01-07 3,72 15-10-07 SPAREBANK BLAKER 9% 5 % 39
IACA OD BONDS FINANCIAL
LAIGRT EUIIS SECURITIES RATE FLOATING
COUPON INTEREST MATURITY EFFECTIVE GAIN/LOSS COST PRICE FACE VALUE INTEREST*** UNREALISED SENSITIVITY** MARKET PRICE MARKET VALUE INTEREST RATE RISK CLASS****
ADJUSTMENT PONT ACCURED INTEREST ACCURED INTEREST SHARE OF THE FUND MARKET VALUE INCL.
SKAGEN Høyrente Institusjon Høyrente SKAGEN Note 8. Securities portfolio as of 31st December 2006 December 31st of as portfolio Securities 8. Note
67 SKAGEN Høyrente Institusjon Høyrente SKAGEN • ANNUAL REPORT 2006 • SKAGEN FUNDS SKAGEN • 2006 REPORT ANNUAL •
BACK TO CONTENTS TO BACK >>
istribution per unit at time of distribution. of time at unit per istribution d the to equal price unit the in reduction a in result will This holders. unit to distribution for allocated is NOK 310,- 035 9
Unit price as of 29.12.2006: 100.6618 29.12.2006: of as price Unit
****** For liquidity in the portfolio per 31.12.2006, please refer to balance sheet balance to refer please 31.12.2006, per portfolio the in liquidity For ******
Risk class 6: Industry 6: class Risk
Risk class 5: Bank and financial institutions financial and Bank 5: class Risk
Risk class 4: County and local government local and County 4: class Risk
Risk class 3: Government, and government guaranteed outside the EEA EEA the outside guaranteed government and Government, 3: class Risk
Risk class 2: Government, and government guaranteed within the EEA EEA the within guaranteed government and Government, 2: class Risk
Risk class 1: Supranational organisations Supranational 1: class Risk
highest credit risk. credit highest the six class and lowest, the has one Class risk. credit their to according classes risk six into divided are Securities ****
*** Effective interest is the average annual return of an interest bearing security until maturity. until security bearing interest an of return annual average the is interest Effective ***
changes by one percentage point. percentage one by changes rate interest the if change will security the of price the much how of expression simplified a is sensitivity rate Interest **
* Effective underlying return adjusted for management fee. management for adjusted return underlying Effective *
neetrt estvt* 4.47 sensitivity** rate Interest
Effective return to clients* 5.25 % 5.25 clients* to return Effective
Effective underlying return 6.05 % 6.05 return underlying Effective
OTOI E IUE FIGURES KEY PORTFOLIO
TOTAL EQUITY PORTFOLIO***** 564 469 195 13 572 098 555 480 519 569 052 726 -8 988 677 99,12 % % 99,12 677 988 -8 726 052 569 519 480 555 098 572 13 195 469 564 PORTFOLIO***** EQUITY TOTAL
89 % 5 5 % 89 2, 615 -372 247 595 16 367 470 16 879 124 823,52 0,25 3,65 982 842 16 000 000 2 17-01-07 3,65 17-10-13 PLC BANK SAMPO
OKO BANK PLC 21-06-11 3,78 21-03-07 2 000 000 16 502 345 3,78 0,25 822,17 17 267 16 443 427 16 460 694 -58 918 2,87 % 2,87 918 -58 694 460 16 427 443 16 267 17 822,17 0,25 3,78 345 502 16 000 000 2 21-03-07 3,78 21-06-11 PLC BANK OKO 5 5
3,61 % 5 5 % 3,61 605 -220 507 696 20 284 554 20 224 142 822,17 0,25 3,77 888 774 20 000 500 2 29-01-07 3,78 28-10-13 CORP FINANCE HSBC
4 260 2,88 % 5 5 % 2,88 260 4 -39 629 536 16 392 434 16 237 102 821,72 0,25 3,86 653 828 16 000 000 2 05-02-07 3,86 03-11-09 IND DANISH FOR FINANCE
DNBNOR 11-04-11 3,57 11-01-07 1 500 000 12 473 472 3,57 0,25 821,35 98 962 12 320 250 12 419 212 -153 222 2,16 % 5 5 % 2,16 222 -153 212 419 12 250 320 12 962 98 821,35 0,25 3,57 472 473 12 000 500 1 11-01-07 3,57 11-04-11 DNBNOR
DANSKE BANK 08-09-11 3,73 08-03-07 2 000 000 16 666 504 3,73 0,25 821,76 39 178 16 435 213 16 474 391 -231 291 2,87 % 2,87 291 -231 391 474 16 213 435 16 178 39 821,76 0,25 3,73 504 666 16 000 000 2 08-03-07 3,73 08-09-11 BANK DANSKE 5 5
IACA OE NOTES FINANCIAL
NOTES NOTES
ØSTERISK STAT 15-01-08 5 2 000 000 17 127 297 3,84 0,95 830,92 787 596 16 618 375 17 405 970 -508 923 3,03 % 2 2 % 3,03 923 -508 970 405 17 375 618 16 596 787 830,92 0,95 3,84 297 127 17 000 000 2 5 15-01-08 STAT ØSTERISK
US STAT 15-02-25 7,62 6 300 000 54 073 852 4,92 10,67 824,07 1 123 281 51 916 368 53 039 650 -2 157 484 9,24 % 3 3 % 9,24 484 157 -2 650 039 53 368 916 51 281 123 1 824,07 10,67 4,92 852 073 54 000 300 6 7,62 15-02-25 STAT US
UK STAT 07-09-16 4 4 700 000 55 263 278 4,73 7,77 1152,35 729 284 54 160 370 54 889 654 -1 102 908 9,56 % 2 2 % 9,56 908 102 -1 654 889 54 370 160 54 284 729 1152,35 7,77 4,73 278 263 55 000 700 4 4 07-09-16 STAT UK
TYSKE STAT 23-03-07 2,5 2 000 000 16 409 208 3,43 0,21 819,54 318 414 16 390 861 16 709 274 -18 347 2,91 % 2 2 % 2,91 347 -18 274 709 16 861 390 16 414 318 819,54 0,21 3,43 208 409 16 000 000 2 2,5 23-03-07 STAT TYSKE
THAILANDSKE STAT 27-07-16 5,4 130 000 000 23 739 838 5,38 7,23 17,25 520 865 22 424 610 22 945 475 -1 315 228 4,00 % 4,00 228 315 -1 475 945 22 610 424 22 865 520 17,25 7,23 5,38 838 739 23 000 000 130 5,4 27-07-16 STAT THAILANDSKE 3 3
SØR AFRIKANSK STAT 15-09-15 13,5 10 000 000 11 687 905 7,81 5,47 120,61 352 262 12 060 909 12 413 171 373 004 2,16 % 2,16 004 373 171 413 12 909 060 12 262 352 120,61 5,47 7,81 905 687 11 000 000 10 13,5 15-09-15 STAT AFRIKANSK SØR 3 3
E OT AE TT 10-7 ,5 40000 94588 61 74 480 4 5 1 2 3 1 6 8 7499 3,32 999 -714 289 066 19 839 720 18 450 345 468,02 7,46 6,17 838 435 19 000 000 4 5,25 01-03-17 STAT WALES SOUTH NEW % 3 3 %
NEDERLANDSKE STAT 28-02-07 0 2 000 000 16 548 576 3,51 0,16 816,96 - 16 339 116 16 339 116 -209 461 2,85 % 2 2 % 2,85 461 -209 116 339 16 116 339 16 - 816,96 0,16 3,51 576 548 16 000 000 2 0 28-02-07 STAT NEDERLANDSKE
MEXIKANSK STAT 28-12-23 8 41 000 000 23 894 046 7,5 9,43 60,35 15 743 24 743 364 24 759 107 849 318 4,31 % 3 3 % 4,31 318 849 107 759 24 364 743 24 743 15 60,35 9,43 7,5 046 894 23 000 000 41 8 28-12-23 STAT MEXIKANSK
MEXIKANSK STAT 29-12-11 9 30 000 000 19 105 185 7,29 4,04 61,94 8 639 18 581 800 18 590 440 -523 384 3,24 % 3 3 % 3,24 384 -523 440 590 18 800 581 18 639 8 61,94 4,04 7,29 185 105 19 000 000 30 9 29-12-11 STAT MEXIKANSK
ISLANDSK STAT 17-05-13 7,25 280 000 000 25 877 802 8,81 4,63 8,12 1 112 444 22 727 791 23 840 235 -3 150 011 4,15 % % 4,15 011 150 -3 235 840 23 791 727 22 444 112 1 8,12 4,63 8,81 802 877 25 000 000 280 7,25 17-05-13 STAT ISLANDSK 2 2
ISLANDSK STAT 17-03-10 7 310 000 000 27 796 845 9,8 2,56 8,12 1 507 318 25 169 711 26 677 028 -2 627 135 4,65 % 2 2 % 4,65 135 627 -2 028 677 26 711 169 25 318 507 1 8,12 2,56 9,8 845 796 27 000 000 310 7 17-03-10 STAT ISLANDSK
ISRAELSK STAT 31-01-16 0 14 000 000 23 459 631 5,63 6,46 165,63 - 23 188 491 23 188 491 -271 139 4,04 % 3 3 % 4,04 139 -271 491 188 23 491 188 23 - 165,63 6,46 5,63 631 459 23 000 000 14 0 31-01-16 STAT ISRAELSK
FRANSKE STAT 25-04-07 5,25 2 000 000 16 955 069 3,55 0,29 825,73 590 697 16 514 556 17 105 253 -440 513 2,98 % 2 2 % 2,98 513 -440 253 105 17 556 514 16 697 590 825,73 0,29 3,55 069 955 16 000 000 2 5,25 25-04-07 STAT FRANSKE
FINSKE STAT 04-07-07 5 2 000 000 16 651 477 3,7 0,49 825,99 405 049 16 519 813 16 924 862 -131 665 2,95 % 2 2 % 2,95 665 -131 862 924 16 813 519 16 049 405 825,99 0,49 3,7 477 651 16 000 000 2 5 04-07-07 STAT FINSKE
) 05-07-16 14 5 000 000 20 744 298 14,25 4,73 433,02 1 509 129 21 650 826 23 159 955 906 528 4,03 % 1 1 % 4,03 528 906 955 159 23 826 650 21 129 509 1 433,02 4,73 14,25 298 744 20 000 000 5 14 05-07-16 ) (AAA INVESTERINGSBANKEN EUROPEISKE DEN
BELGISKE STAT 28-03-08 5,75 2 000 000 16 982 743 3,83 1,13 839,63 719 413 16 792 665 17 512 078 -190 078 3,05 % 2 2 % 3,05 078 -190 078 512 17 665 792 16 413 719 839,63 1,13 3,83 743 982 16 000 000 2 5,75 28-03-08 STAT BELGISKE
BRASILIANSK STAT 05-01-22 12,5 1 800 000 5 589 985 10,56 6,98 335,19 197 085 6 033 415 6 230 499 443 430 1,09 % 3 3 % 1,09 430 443 499 230 6 415 033 6 085 197 335,19 6,98 10,56 985 589 5 000 800 1 12,5 05-01-22 STAT BRASILIANSK
RSLAS TT 50-6 25 1 0 0 4 4 7 00 53 3,1 24806 68486 93282 32619 8,59 129 296 3 832 342 49 806 844 46 026 498 2 334,61 5,3 10,06 677 548 43 000 000 14 12,5 05-01-16 STAT BRASILIANSK % 3 3 %
OEG OENETBNS BONDS GOVERNMENT FOREIGN
NORSKE STAT 15-05-15 5 9 000 000 9 488 800 4,26 6,62 104,71 283 562 9 423 900 9 707 462 -64 900 1,69 % 2 2 % 1,69 900 -64 462 707 9 900 423 9 562 283 104,71 6,62 4,26 800 488 9 000 000 9 5 15-05-15 STAT NORSKE
OENETBNS BONDS GOVERNMENT
LAIGRT EUIIS SECURITIES RATE FLOATING
COUPON INTEREST MATURITY EFFECTIVE GAIN/LOSS COST PRICE FACE VALUE INTEREST*** UNREALISED SENSITIVITY** MARKET PRICE MARKET VALUE INTEREST RATE RISK CLASS****
ADJUSTMENT PONT ACCURED INTEREST ACCURED INTEREST SHARE OF THE FUND MARKET VALUE INCL.
Note 8. Securities portfolio as of 31st December 2006 December 31st of as portfolio Securities 8. Note Tellus SKAGEN
** The fund was established during the year the during established was fund The **
* MNOK *
2006 0,66 -2,87 574 2 557 2 574 -2,87 0,66 2006
INVESTMENT % INDEX % VALUE* UNIT HOLDERS HOLDERS UNIT VALUE* % INDEX % INVESTMENT
vestment portfolio. portfolio. vestment
YEAR RETURN ON BENCHMARK NET ASSET NUMBER OF OF NUMBER ASSET NET BENCHMARK ON RETURN YEAR
The fund is well suited to be part of a long-term in- long-term a of part be to suited well is fund The
be tolerant of currency exchange rate fluctuations. fluctuations. rate exchange currency of tolerant be
Torgeir Høien Torgeir Manager Portfolio
tment horizon of at least 12 months. Investors must must Investors months. 12 least at of horizon tment
Yes fund UCITS
wish to invest in global bonds and who have an inves- an have who and bonds global in invest to wish
Lehman Global Treasury Index 3 - 5 years. years. 5 - 3 Index Treasury Global Lehman Benchmark
SKAGEN Tellus is a good option for investors who who investors for option good a is Tellus SKAGEN
Norway, Sweden, Denmark and the Netherlands the and Denmark Sweden, Norway, in marketing for Authorised
Unit Link Unit schemes Tax
good returns in the form of capital gains. capital of form the in returns good
One-time subscription NOK 1 000 1 NOK subscription One-time amount subscription Minimum
research to find undervalued bonds with potential for for potential with bonds undervalued find to research
p.a. p.a. 0.8 fee Management %
the world. The fund’s strategy is to use thorough thorough use to is strategy fund’s The world. the
0 0 fee Redemption %
regional authorities and financial institutions all over over all institutions financial and authorities regional
0 0 fee Subscription %
fund which invests in bonds issued by governments, governments, by issued bonds in invests which fund
2 557 2 holders unit of Number
SKAGEN Tellus is an actively managed global bond bond global managed actively an is Tellus SKAGEN
574 MNOK 574 value asset Net
0.66 0.66 start since Return %
audited.
29th September 2006 September 29th date start Fund This information is not part of the official accounts and has not been been not has and accounts official the of part not is information This
SKAGEN Tellus SKAGEN
68 ANNUAL REPORT 2006 • SKAGEN FUNDS • FUNDS SKAGEN • 2006 REPORT ANNUAL SKAGEN Tellus SKAGEN
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www.pwc.no www.pwc.no
Medlemmer av Den norske Revisorforening | Foretaksregisteret: NO 987 009 713 713 009 987 NO Foretaksregisteret: | Revisorforening norske Den av Medlemmer
s organisasjonen organisasjonen s PricewaterhouseCooper verdensomspennende den tilknyttet medlemsfirmaer individuelle til refererer navnet PricewaterhouseCoopers
Trondheim Tønsberg Ålesund Ålesund Tønsberg Trondheim Tromsø Stryn Stavanger Oslo Narvik Måløy Molde Rana i Mo Kristiansand Hamar Førde Fredrikstad Drammen Bergen Arendal Kontorer:
Note: This translation from Norwegian has been prepared for information purposes only only purposes information for prepared been has Norwegian from translation This Note:
State Authorised Public Accountant (Norway) (Norway) Accountant Public Authorised State
Gunnar Slettebø Slettebø Gunnar
PricewaterhouseCoopers AS AS PricewaterhouseCoopers
Stavanger, 29 January 2007 2007 January 29 Stavanger,
law and regulations. regulations. and law
the with comply and statements financial the with consistent are fund mutual each in profit the of allocation the for proposal the
x the information given in the Board of Directors' report concerning the financial statements, the going concern assumption, and assumption, concern going the statements, financial the concerning report Directors' of Board the in given information the
information in accordance with the law and good bookkeeping practice in Norway. Norway. in practice bookkeeping good and law the with accordance in information
x the management has fulfilled its duty to produce a proper and clearly set out registration and documentation of accounting accounting of documentation and registration out set clearly and proper a produce to duty its fulfilled has management the
ended, in accordance with accounting standards, principles and practices generally accepted in Norway Norway in accepted generally practices and principles standards, accounting with accordance in ended,
financial position of the mutual funds as of December 31, 2006, and the results of operations and cash flows for the year then then year the for flows cash and operations of results the and 2006, 31, December of as funds mutual the of position financial
x the financial statements have been prepared in accordance with the law and regulations and give a true and fair view of the the of view fair and true a give and regulations and law the with accordance in prepared been have statements financial the
In our opinion, opinion, our In
reasonable basis for our opinion. opinion. our for basis reasonable
management of the Company's financial affairs and its accounting and internal control systems. We believe that our audit provid audit our that believe We systems. control internal and accounting its and affairs financial Company's the of management es a a es
overall financial statement presentation. To the extent required by law and auditing standards an audit also comprises a review a comprises also audit an standards auditing and law by required extent the To presentation. statement financial overall of the the of
also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the the evaluating as well as management, by made estimates significant and used principles accounting the assessing includes also
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An a An statements. financial the in disclosures and amounts the supporting evidence basis, test a on examining, includes audit An udit
plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatem material of free are statements financial the whether about assurance reasonable obtain to audit the perform and plan ent.
including standards on auditing adopted by The Norwegian Institute of Public Accountants. These auditing standards require that require standards auditing These Accountants. Public of Institute Norwegian The by adopted auditing on standards including we we
We conducted our audit in accordance with the laws, regulations and auditing standards and practices generally accepted in Norw in accepted generally practices and standards auditing and regulations laws, the with accordance in audit our conducted We ay, ay,
Norwegian Act on Auditing and Auditors. Auditors. and Auditing on Act Norwegian
responsibility is to express an opinion on these financial statements and on other information according to the requirements of requirements the to according information other on and statements financial these on opinion an express to is responsibility the the
These financial statements are the responsibility of the Fund Management Company’s Board of Directors and Managing Director. Ou Director. Managing and Directors of Board Company’s Management Fund the of responsibility the are statements financial These r
standards, principles and practices generally accepted in Norway have been applied in the preparation of the financial statemen financial the of preparation the in applied been have Norway in accepted generally practices and principles standards, ts.
statements of income and cash flows, and the accompanying notes. The regulations of the Norwegian accounting act and accounting and act accounting Norwegian the of regulations The notes. accompanying the and flows, cash and income of statements
assumption, and the proposal for the allocation of the profit. The annual financial statements comprise the balance sheet, the the sheet, balance the comprise statements financial annual The profit. the of allocation the for proposal the and assumption,
We have also audited the information in the Board of Directors' report concerning the financial statements, the going concern concern going the statements, financial the concerning report Directors' of Board the in information the audited also have We
KGNTlu NK4 3 633 46 NOK Tellus SKAGEN
on NOK 9 473 752 752 473 9 NOK on j Institus rente øy SKAGEN H SKAGEN
SKAGEN H SKAGEN rente NOK 61 717 445 445 717 61 NOK rente øy
SKAGEN Avkastnin SKAGEN NOK 102 419 483 483 419 102 NOK g
SKAGEN Kon-Tiki NOK 2 302 925 897 897 925 302 2 NOK Kon-Tiki SKAGEN
SKAGEN Global NOK 3 745 441 603 603 441 745 3 NOK Global SKAGEN
SKAGEN Vekst NOK 2 685 489 600 600 489 685 2 NOK Vekst SKAGEN
We have audited the annual financial statements of the mutual funds as of 31 December, 2006, showing the following results: results: following the showing 2006, December, 31 of as funds mutual the of statements financial annual the audited have We
Telefaks +47 23 16 10 00 00 10 16 23 +47 Telefaks
Auditor’s report for 2006 2006 for report Auditor’s
Telefon 02316 02316 Telefon
N-4068 Stavanger Stavanger N-4068
Postboks 8017 8017 Postboks
Forus Atrium Atrium Forus
PricewaterhouseCoopers AS PricewaterhouseCoopers
AUDITOR’S REPORT FOR 2006 FOR REPORT AUDITOR’S
69 AUDITOR’S REPORT AUDITOR’S • ANNUAL REPORT 2006 • SKAGEN FUNDS SKAGEN • 2006 REPORT ANNUAL •
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ing market funds according to to according funds market ing Lipper uses quantitative methods to to methods quantitative uses Lipper performance.
bal equity funds and global emerg- global and funds equity bal tive to competitors in the same class. class. same the in competitors to tive and enables us to deliver world-class world-class deliver to us enables and
(S&P) rating agency ranks all glo- all ranks agency rating (S&P) most consistent performance rela- performance consistent most thousands of funds in this market market this in funds of thousands
Each year the Standard & Poor’s Poor’s & Standard the year Each who have achieved the strongest and and strongest the achieved have who makes us stand out from the many many the from out stand us makes
ognise funds and fund managers managers fund and funds ognise works. Our way of managing funds funds managing of way Our works.
ket fund for 2006. 2006. for fund ket funds won five awards, which rec- which awards, five won funds that our investment philosophy philosophy investment our that
global fund and best emerging mar- emerging best and fund global companies. In addition, our equity equity our addition, In companies. prizes are recognition of the fact fact the of recognition are prizes
SKAGEN Funds the prize for best best for prize the Funds SKAGEN fund manager among smaller fund fund smaller among manager fund These nominations, awards and and awards nominations, These
fondmarknaden.se market awarded awarded market fondmarknaden.se awarded the prize for the best equity equity best the for prize the awarded
prizes and honours. In Sweden, the the Sweden, In honours. and prizes Awards 2006, SKAGEN Funds was was Funds SKAGEN 2006, Awards Awards. Awards.
have been awarded a number of of number a awarded been have During the Lipper European Fund Fund European Lipper the During of the Year by 2006 Funds Europe Europe Funds 2006 by Year the of
pany and the portfolio managers managers portfolio the and pany to European Investment Director Director Investment European to
During 2006, the funds, the com- the funds, the 2006, During two out of 316 since launch in 2002. in launch since 316 of out two nated as one of three candidates candidates three of one as nated
wide. SKAGEN Kon-Tiki is number number is Kon-Tiki SKAGEN wide. Kristoffer Stensrud was nomi- was Stensrud Kristoffer
ingstar.se. ingstar.se. one out of a total of 1352 funds world- funds 1352 of total a of out one outstanding investments in 2006. 2006. in investments outstanding
Jonas Lindmark remarked at morn- at remarked Lindmark Jonas ranks SKAGEN Global as number number as Global SKAGEN ranks watch”, when it awarded prizes to to prizes awarded it when watch”,
three years in a row,” Morningstar’s Morningstar’s row,” a in years three According to five-year returns, S&P S&P returns, five-year to According SKAGEN Funds as “Equity firm to to firm “Equity as Funds SKAGEN
Weintraub – has managed to win win to managed has – Weintraub was among the top two percent. percent. two top the among was Global Investor Magazine selected selected Magazine Investor Global
ing that the same person – Filip Filip – person same the that ing cent in 2006, and SKAGEN Global Global SKAGEN and 2006, in cent
bal funds, I think that it is amaz- is it that think I funds, bal Kon-Tiki was among the best 30 per- 30 best the among was Kon-Tiki as e.g. Morningstar. e.g. as
“In broader categories, such as glo- as such categories, broader “In returns. In this ranking, SKAGEN SKAGEN ranking, this In returns. evaluate the funds, in the same way way same the in funds, the evaluate
business daily Dagens Industri and fund rating company Morningstar. Morningstar. company rating fund and Industri Dagens daily business
was named “Star Manager of the Year” in the global fund category by Swedish Swedish by category fund global the in Year” the of Manager “Star named was
For the third year in a row, SKAGEN Global and Portfolio manager Filip Weintraub, Weintraub, Filip manager Portfolio and Global SKAGEN row, a in year third the For
SKAGEN Funds has received international recognition and several awards in 2006. 2006. in awards several and recognition international received has Funds SKAGEN
Awards and commendations and Awards
smaller fund managers in 2006. in managers fund smaller
Thank you: Investment Director Kristoffer Stensrud receives the Lipper European Fund Award presented to SKAGEN as the best equi best the as SKAGEN to presented Award Fund European Lipper the receives Stensrud Kristoffer Director Investment you: Thank ty fund manager among among manager fund ty
70 ANNUAL REPORT 2006 • SKAGEN FUNDS • FUNDS SKAGEN • 2006 REPORT ANNUAL AWARDS AND COMMENDATIONS AND AWARDS
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an answer within one business day. business one within answer an Museum in Oslo, Norway. Oslo, in Museum downloaded from our website. website. our from downloaded
skagenfunds.com you will receive receive will you skagenfunds.com and our partnership with the Kon-Tiki Kon-Tiki the with partnership our and and redemption forms can also be be also can forms redemption and
If you send an e-mail to contact@ to e-mail an send you If in 2006 were the Tangaroa Expedition Expedition Tangaroa the were 2006 in redeem units online. Subscription Subscription online. units redeem
Monday to Friday with your queries. queries. your with Friday to Monday Other major sponsorship contributions contributions sponsorship major Other use “My Account” to subscribe and and subscribe to Account” “My use
between 09.00 and 17.00 (GMT+1), (GMT+1), 17.00 and 09.00 between bank accounts it is also possible to to possible also is it accounts bank
You may also call Customer Services Services Customer call also may You 8 MNOK to the project. the to MNOK 8 for those clients with Norwegian Norwegian with clients those for
may have regarding fund saving. saving. fund regarding have may In total SKAGEN has contributed contributed has SKAGEN total In of their SKAGEN holdings, and and holdings, SKAGEN their of
assist you with whatever queries you you queries whatever with you assist in 2006 and one million in 2007. 2007. in million one and 2006 in provides clients with an overview overview an with clients provides
Copenhagen. Our advisors will will advisors Our Copenhagen. Three million will be contributed contributed be will million Three the “My Account” web service. This This service. web Account” “My the
Tønsberg, Ålesund, Stockholm and and Stockholm Ålesund, Tønsberg, new Preikestolen mountain lodge. lodge. mountain Preikestolen new tions. For existing clients we offer offer we clients existing For tions.
Oslo, Bergen, Trondheim, Trondheim, Bergen, Oslo, 4 MNOK for the construction of a a of construction the for MNOK 4 and replies to frequently asked ques- asked frequently to replies and
by one of our offices in Stavanger. Stavanger. in offices our of one by Tourist Association with a further further a with Association Tourist our funds as well as important news news important as well as funds our
Monday to Friday, you may drop drop may you Friday, to Monday it would support the Stavanger Stavanger the support would it commentaries and status reports for for reports status and commentaries
Between 09.00 and 17.00 (GMT+1), (GMT+1), 17.00 and 09.00 Between ment company announced that that announced company ment fund units, daily price information, information, price daily units, fund
In December 2005, the manage- the 2005, December In regarding how to buy and sell our our sell and buy to how regarding Customer Services Customer
in different countries, instructions instructions countries, different in
tory to children and young people. people. young and children to tory the investments of all our funds. funds. our all of investments the information on the funds available available funds the on information
communicate the Stavanger City his- City Stavanger the communicate a complete summary of prices and and prices of summary complete a about SKAGEN Funds, including including Funds, SKAGEN about
money will primarily be used to to used be primarily will money prospects. In addition, you will find find will you addition, In prospects. the information that you need need you that information the
tory project with 2 MNOK. The The MNOK. 2 with project tory ions about investments, markets and and markets investments, about ions the website you will find most of of most find will you website the
we do with the Stavanger City his- City Stavanger the with do we the portfolio managers’ own opin- own managers’ portfolio the existing and potential clients. On On clients. potential and existing
included reinforcement of the work work the of reinforcement included important news, savings tips and and tips savings news, important tant source of information for both both for information of source tant
Other major contributions in 2006 2006 in contributions major Other the Market Report, you will find find will you Report, Market the pages in 2006 which is an impor- an is which 2006 in pages
electronically seven times a year. In In year. a times seven electronically version of its English language web- language English its of version
Our client newspaper is published published is newspaper client Our SKAGEN launched an improved improved an launched SKAGEN around Sao Paulo in Brazil. Brazil. in Paulo Sao around
help children in the poor areas areas poor the in children help www.skagenfunds.com Market Report Market
will receive 3 MNOK so they may may they so MNOK 3 receive will
the Children at Risk Foundation Foundation Risk at Children the of various communication channels to our clients. clients. our to channels communication various of
strengthen its work in Africa, and and Africa, in work its strengthen
communication. To achieve this, we provide a number number a provide we this, achieve To communication.
Borders will receive 3 MNOK to to MNOK 3 receive will Borders
Eastern Europe, Doctors Without Without Doctors Europe, Eastern Our objective is to offer our clients the best possible possible best the clients our offer to is objective Our
MNOK for an assistance project in in project assistance an for MNOK
Children’s Villages will receive 4 4 receive will Villages Children’s
in SKAGEN in
16 MNOK to various projects. SOS SOS projects. various to MNOK 16
In 2006 we contributed a total of of total a contributed we 2006 In
Client communication communication Client
nationally and globally. globally. and nationally
to improve society, locally, locally, society, improve to
sations and projects working working projects and sations
of our profits with organi- with profits our of
is only right to share some some share to right only is
fit. SKAGEN believes that it it that believes SKAGEN fit.
and the company itself bene- itself company the and
were in 2006, both our clients clients our both 2006, in were
and results are as good as they they as good as are results and
When the funds’ performance performance funds’ the When
contribution
Community Community
71 COMMUNITY CONTRIBUTION • CLIENT COMMUNICATION CLIENT • CONTRIBUTION COMMUNITY • ANNUAL REPORT 2006 • SKAGEN FUNDS SKAGEN • 2006 REPORT ANNUAL •
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Janniken Støldal and Anne Grete Løvås Grete Anne and Støldal Janniken Johan Horstmann Johan
Pål Didriksen and Stein Skovly Stein and Didriksen Pål
Eva Marie Sollie, Asbjørn Vagle, Vagle, Asbjørn Sollie, Marie Eva Christian Jessen and and Jessen Christian
3126 Tønsberg 3126
Kristen Kvamme, Elisabeth Gausel, Gausel, Elisabeth Kvamme, Kristen Denmark
Nedre Langgate 32, 32, Langgate Nedre
Skagen 3, Torgterrassen 3 4001 Stavanger 4001 3 Torgterrassen 3, Skagen
1051 København K, K, København 1051
TØNSBERG
STAVANGER Nyhavn 63A, 63A, Nyhavn
KØBENHAVN
Anna Svensson and Per Wennberg. Per and Svensson Anna
Gobitschek, Sara Stjärne, Jonas A Eriksson, Eriksson, A Jonas Stjärne, Sara Gobitschek,
Johan Meyer, Michael Metzler, Michael Michael Metzler, Michael Meyer, Johan
Kungsgatan 72A, 111 22 Stockholm, Sweden Stockholm, 22 111 72A, Kungsgatan
STOCKHOLM
Petter Sandtorv Petter
Joachim Skagen, Marit Bjørsvik and and Bjørsvik Marit Skagen, Joachim
5012 Bergen 5012 5 plass Bulls Ole Øvre
BERGEN
Anders Martinsen and Tore Bang Tore and Martinsen Anders
Vibeke Monsen Langaard, Truls Langballe, Langballe, Truls Langaard, Monsen Vibeke
Klingenberggt. 5, 0161 Oslo 0161 5, Klingenberggt.
OSLO
Johan Frisvold, Arild Rødal and Ronny Frantsen Ronny and Rødal Arild Frisvold, Johan
Notenesgate 3, 6002 Ålesund 6002 3, Notenesgate
Hans Petter Hammernes Hammernes Petter Hans ÅLESUND
Tom Gamlem, Marius Aspaas and and Aspaas Marius Gamlem, Tom
Kongensgate 8, Mercursenteret, 7011 Trondheim 7011 Mercursenteret, 8, Kongensgate
TRONDHEIM
Nordic region we operate the following offices: following the operate we region Nordic
cation and follow-up. International clients are welcome to contact our head office in Stavanger. In the the In Stavanger. in office head our contact to welcome are clients International follow-up. and cation
clients with the highest risk adjusted returns and the best possible service, in terms of client communi- client of terms in service, possible best the and returns adjusted risk highest the with clients
Our goal is to be the best possible investment manager for our clients. We will do this by providing providing by this do will We clients. our for manager investment possible best the be to is goal Our
SKAGEN Funds Offices: Funds SKAGEN
Yann Aker Yann Photo / Dybvig Per Illustrations
Sandnes Trykkeri as Trykkeri Sandnes Print DDB Oslo Oslo DDB Design
Ellen Jepson/DDB Studio Jepson/DDB Ellen Graphs 3 000 000 3 Circulation
Email: [email protected] [email protected] Email:
Fax: +47 51 86 37 00 37 86 51 +47 Fax:
Telephone: +47 04001 or +47 51 93 98 58 98 93 51 +47 or 04001 +47 Telephone:
www.skagenfunds.com
[email protected] you. you.
Company registration number: 867 462 732 462 867 number: registration Company or call us and we will do our utmost to help help to utmost our do will we and us call or
Tel. +47 04001. Fax +47 51 86 37 00 37 86 51 +47 Fax 04001. +47 Tel. visit us at one of our offices, send an e-mail e-mail an send offices, our of one at us visit
Skagen 3, Torgterrassen 3, Skagen Friday from 9 a.m. to 5 p.m. (GMT+1). Either Either (GMT+1). p.m. 5 to a.m. 9 from Friday
Post box 160, N-4001 Stavanger, Norway Stavanger, N-4001 160, box Post Customer Services is open from Monday to to Monday from open is Services Customer
Stavanger Fondsforvaltning AS Fondsforvaltning Stavanger / Funds SKAGEN
CONTACT CUSTOMER SERVICES CUSTOMER CONTACT OFFICE HEAD