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Weekly Update: Stimulus helps equities stage muted recovery

Central Banks ramped up stimulus to support the increasing areas of the global economy shut down by governments; fiscal stimulus worldwide now represents around 3% of global GDP.

The US approved a record-breaking USD 2 trillion support package, representing 9.5% of the country's GDP.

Equities enjoyed a three-day rally to help the MSCI All Country World Index end the week 2.6% higher but it remains down 21.1% year-to-date.

Here are selected events relevant for our funds:


  • The portfolio managers remain focused on conducting bottom-up fundamental research on existing and prospective positions to selectively capitalise on excess volatility and improve the long-term outlook for the portfolio.
  • The fund didn't enter or exit any positions last week but made minor portfolio adjustments in response to extreme share price movements.
  • The fund retains a liquid portfolio with a cash position below 1% in order to remain invested in the market.


  • SKAGEN Kon-Tiki outperformed the index over the week as the fund's energy-related and Korean holdings recovered from recent lows.
  • The portfolio managers added to three of their recent 'hot pots' and initiated two more during the week; these five companies exhibit either attractive defensive characteristics or significant upside potential in a swift recovery without taking balance sheet risk.
  • Amid extreme market volatility which is likely to remain high, the portfolio managers' focus is currently on large dislocations in markets or companies that they already know well, assessing the fitness of holdings for the changing economic backdrop and remaining disciplined to be able to capitalise fully when the market recovers.


  • Last week the global real estate market regained some ground after falling further than many other sectors the week before.
  • The investment team remain focused on what they believe are resilient sub-segments of the real estate market, characterised by companies with cash flow and balance sheet strength. They continue to build positions in operationally and financially stable businesses, using market movements to selectively increase exposure to quality names.
  • The portfolio is more liquid than it has been for a considerable time and the fund's cash position is currently around 8%.


  • The portfolio managers added two new hotpot companies; one is currently a position in both Kon-Tiki and Focus while the other is a holding in SKAGEN Global.
  • The overall portfolio remains highly liquid and the fund has recently received an inflow of dividends; its current cash position is 3.5%.
  • With companies generally struggling to estimate the impact from COVID-19, many have retracted their previous guidance while others are cancelling dividends and buyback plans, particularly Nordic companies.


  • The portfolio managers believe that the latest coronavirus developments are supportive of being more positive towards Asian and Japanese equities versus western markets, in particular the US which looks increasingly vulnerable from both a medical and economic perspective.
  • They have selectively increased company exposure in Asia and Japan, and remained relatively defensive in terms of the US, despite tentatively adding to several US companies with diversified catalysts and risk exposure factors.
  • The fund's cash position remains at 7%.

Fixed income funds

  • Both funds outperformed their respective benchmarks over the week.
  • The Norwegian fixed income market remains challenging but improved compared to the previous week with credit spreads narrowing, helped by the Norges Bank F-loan and NOK interventions.
  • On Friday, the Government Bond Fund (SOF) was approved (there were rumours it was active in the markets at the end of the week), which should further improve the functioning of the Norwegian money market.
  • Government bond markets started the week in 'risk-off' mode but EM spreads rallied from Tuesday to Thursday. European spreads continued to tighten after the ECB started to buy bonds under its extended QE program. Safe haven interest rates fell by the end of the week.
  • The funds' cash positions are currently 4.0% (SKAGEN Tellus) and 5.5% (SKAGEN Avkastning).

* All figures in EUR as of 27 March 2020

Historical returns are no guarantee for future returns. Future returns will depend, inter alia, on market developments, the fund manager’s skills, the fund’s risk profile and management fees. The return may become negative as a result of negative price developments. There is risk associated with investing in funds due to market movements, currency developments, interest rate levels, economic, sector and company-specific conditions. The funds are denominated in NOK. Returns may increase or decrease as a result of currency fluctuations. Prior to making a subscription, we encourage you to read the fund's prospectus and key investor information document. An overview of costs can be found at