Arctic Norwegian Equities Monthly Report April 2020
FUND COMMENTS April was a strong month for equi es, markets reacted posi vely to a gradual fla ening of new Covid-19 cases. Arc- c Norwegian Equi es (Class I) gave 8.6% return in April versus 10.2% for the OSEFX benchmark index. Year to date the fund has returned -22.1% compared to -16.7% for the OSEFX. Since incep on the fund has returned 100.7% versus 85.7% for the benchmark index. In April posi ve a ribu on for the Fund versus the benchmark index came from overweights in Vaccibody and BW Offshore, and underweight in Adevinta. Vaccibody held a company update confirming its medical pipeline is on- track, though slightly delayed due to Covid-19. They also announced an expansion into infec ous diseases, led by Gunnstein Norheim from CEPI. The fund has a small overweight in BW Offshore, the stock rose sharply with the rest of the Energy sector in April. BW Offshore has strong opera ng results from exis ng, producing units. The larg- est uncertainty is FPSO ‘Catcher’ which operates for Premier Oil. Last month the company announced a posi ve 5- year extension for another FPSO, ‘Pioneer’. Adevinta is nega vely affected by the lockdown in Europe, par cularly in France for its most important asset Leboncoin. The Adevinta share has been priced for high growth, but fell in April. Arc c Norwegian Equi es is underweight in Adevinta and sold some shares last month. In April nega ve a ribu on for the Fund versus the benchmark index came from overweights in NRC Group and Atea, and underweight Tomra Systems. In a month when more aggressive shares had a strong come-back it is not surprising NRC and Atea were slightly behind index. NRC fell somewhat in April a er outperforming in March. Covid -19 has not affected the company materially. The first Norwegian s mulus plan contained more money for railway maintenance. Atea announced results for the 1st quarter which were below market expecta ons, the company entered the year with a weak orderbook. But outlook for the 2nd quarter was strong, with higher order intake and a larger orderbook. Tomra Systems rose in April, though there was no significant company news. Over the last cou- ple of months Tomra has announced strong Q4 order intake, but a bo le deposit scheme in Scotland appears to be delayed. In April the fund has bought shares in companies we consider robust, such as Gjensidige Forsikring, Yara, Telenor and Europris. The fund has also added to posi ons in DNB and Schibsted. The fund has reduced some stakes in En- ergy, such as TGS and Aker ASA. The fund has sold all its shares in BW Energy. Year to date the strongest a ributors include overweight sin Crayon Group and Vaccibody, and underweight in Subsea 7. The weakest a ributors include overweight in NRC Group, and underweights in Tomra Systems and Telenor. Oslo, May 2020 Albert ColleƩ Alexander Larstedt Lager CIO Por olio Manager
ABOUT THE FUND The investment objec ve is to achieve long-term capital apprecia on primarily through equity investments in companies listed or traded on markets in Norway. The Fund may be considered as a focused equity fund – a “stock picker”. Our investment team has long experience in challenging the market consensus and invests only in companies and sectors we have knowledge of and understand. We seek to achieve the investment objec ve through ac ve por olio management based on competence and analysis of companies, sectors, markets and the macro-economic outlook. This results in selec ve company investments. There are no limita ons of which sectors within the Norwegian stock market the Fund may invest in. The por olio composi on may deviate significantly from the reference index. The Fund’s reference index is the Oslo Stock Exchange Mutual Fund Index (OSEFX) which is a total return index. The Fund is a UCITS fund. 20% 10.2 % 8.6 % 7.6 % 6.8 % 10% 3.5 % 4.4 % 1.0 % 2.7 % 0%
-10% -10.3 % -20% -16.7 % -14.6 % -22.1 % -30% Month YTD 12m 36m p.a. 60m p.a. Incep. p.a. Arctic Norwegian Equities Class I (15/11-10) OSEFX FUND COMPOSITION END OF MONTH
Real Estate Real Estate Energy Energy Industrials Industrials Health Care Health Care Consumer Staples Consumer Staples Materials Materials IT IT Financials Financials Consumer Discr. Consumer Discr. Telecom Telecom Utilities Utilities 0% 5% 10% 15% 20% 25% -8% -6% -4% -2% 0% 2% 4% 6% 8%
10 largest positions 5 largest overweights +/- 5 largest underweights +/- DNB ASA 9.0 % Equinor ASA 4.7 % NRC Group ASA 5.9 % Equinor ASA -4.5 % Telenor ASA 6.5 % Atea ASA 4.6 % Atea 3.8 % Tomra Systems -4.1 % Mowi ASA 6.1 % Gjensidige Forsikring AS 4.2 % Crayon Group Holding A 3.2 % Entra ASA -2.0 % NRC Group ASA 5.9 % Salmar ASA 4.0 % Vaccibody AS 2.5 % Telenor -1.9 % Yara International ASA 5.4 % Bakkafrost P/F 3.7 % SpareBank 1 Nord-Norg 2.3 % Schibsted ASA CL A -1.9 %
FUND PERFORMANCE AND RISK FIGURES —CLASS I NOK
3 6 Since Month months months YTD 1 year 3 years 5 years launch Fund 8.6 % -19.8 % -17.0 % -22.1 % -14.6 % 3.0 % 14.3 % 100.7 % Benchmark 10.2 % -15.2 % -13.1 % -16.7 % -10.3 % 10.7 % 24.1 % 85.6 % Difference -1.5 % -4.7 % -4.0 % -5.4 % -4.4 % -7.7 % -9.8 % 15.0 % Vinx Nordic Net, NOK 6.3 % -0.3 % 5.8 % 3.4 % 14.1 % 27.5 % 21.2 % 87.1 % Euro Stoxx 600, EUR 6.5 % -16.5 % -13.4 % -17.5 % -10.8 % -4.7 % -1.5 % 63.2 % S&P 500 TR, USD 12.8 % -9.3 % -3.2 % -9.3 % 0.9 % 29.7 % 54.7 % 196.0 % MSCI AC World, LC 10.3 % -11.2 % -6.8 % -11.7 % -4.2 % 15.1 % 27.8 % 109.0 %
5 top contribut. Fund Fund Contri- 5 bottom contribut. Fund Fund Contri- year to date weight return bution year to date weight return bution Nel Asa 0.8 % 46.1 % 0.32 % Nrc Group Asa 5.4 % -54.5 % -3.27 % Orkla Asa 2.6 % 7.1 % 0.26 % Aker Bp Asa 3.6 % -39.7 % -2.09 % Kahoot! As 0.6 % -3.0 % 0.18 % Dnb Asa 8.3 % -24.3 % -2.08 % Arundo Analytics Inc 1.1 % 16.4 % 0.15 % Mowi Asa 7.1 % -22.2 % -1.70 % Vaccibody As 2.9 % 14.3 % 0.15 % Atea Asa 4.4 % -30.3 % -1.35 % Standard Sharpe Tracking Information Portfolio characteristics Deviation Ratio Error Ratio Arctic Norwegian Equities 15.7 % 0.0 3.5 % -0.7 Benchmark 15.5 % 0.2 *) Based on 36 months rolling performance
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD 2020 -2.83 % -12.08 % -16.06 % 8.63 % -22.09 % 2019 3.69 % 2.82 % -0.34 % 2.07 % -2.03 % 1.07 % 0.26 % -0.31 % 0.77 % 3.12 % 3.12 % 3.31 % 18.83 % 2018 -0.59 % 0.34 % -1.79 % 6.33 % 2.10 % 0.83 % 1.38 % 2.75 % 2.32 % -5.34 % -3.07 % -5.98 % -1.40 % 2017 -0.10 % -0.87 % -2.12 % 1.68 % 0.72 % -1.70 % 4.13 % 1.08 % 5.18 % 2.28 % -0.87 % 1.53 % 11.22 % 2016 -8.62 % 2.65 % 1.28 % 3.19 % 2.45 % -2.94 % 1.65 % 1.75 % 2.42 % 3.82 % 1.80 % 2.48 % 11.85 % 2015 4.11 % 0.12 % 1.53 % 3.45 % 0.94 % -1.80 % 1.84 % -5.80 % -2.34 % 3.05 % 2.87 % 2.23 % 10.19 % 2014 0.79 % 2.67 % -0.32 % 0.71 % 3.31 % 2.66 % 0.43 % 0.49 % 0.97 % -1.01 % -0.22 % 2.03 % 13.15 % 2013 4.40 % 5.27 % -0.66 % 2.24 % 3.70 % -3.49 % 3.93 % 0.44 % 1.46 % 6.51 % 4.29 % -0.03 % 31.37 % 2012 5.26 % 9.20 % 0.42 % 0.97 % -7.84 % 4.40 % 1.93 % 2.59 % 2.13 % -2.45 % -1.75 % 1.67 % 16.68 % 2011 -2.89 % 2.19 % -0.17 % -0.06 % -3.43 % -2.25 % -1.08 % -8.59 % -9.19 % 9.65 % -2.28 % 2.43 % -15.78 %
200.0 % Disclaimer: Historical returns are no guarantee for future returns. Future returns will depend, inter alia, on market developments, the fund man- ager’s skill, the fund’s risk profile and subscrip on and management fees. 150.0 % The return may become nega ve as a result of nega ve price develop- ments. Arc c Fund Management AS seeks to the best of its ability to ensure 100.0 % that all informa on given in this report is correct, however, makes reserva- ons regarding possible errors and omissions. Statements in the report 50.0 % reflect the por olio managers’ viewpoint at a given me, and this view- point may be changed without no ce. The report should not be perceived 0.0 % as an offer or recommenda on to buy or sell financial instruments. Arc c Fund Management AS does not assume responsibility for direct or indirect loss or expenses incurred through use or understanding of the report. -50.0 % Employees of Arc c Fund Management AS may be owners of securi es 11/10 11/11 11/12 11/13 11/14 11/15 11/16 11/17 11/18 11/19 issued by companies that are either referred to in this rapport or are part of Arctic Norwegian Equities Class I OSEFX the fund's por olio.