Modelportfolio April 2014

Our allocation was not changed in the modelportfolio in April. The modelportfolio generated a positive return of 0.57% in April versus a positive return of 0.48% for the benchmark, a relative performance of plus 0.1% as such.

Our modelportfolio has generated a positive return of some 0.46% for the first four months of this year versus 1.27% for the benchmark. As such, the benchmark has generated some 0.81%-point better return than the modelportfolio.

The negative deviation stems from a very weak performance from the selected East Capital Russia fund which was a part of our equity selection until mid-March. By the date of removal, the fund had generated a negative return of some 32% since the start of this year. Even though the East capital Russia fund was weighting a marginal 3.5% in our model portfolio, the negative impact has been some 1%-point on our model portfolio performance this year. This explains more than our negative deviation versus the benchmark as such, hence the rest our portfolio and/or the allocation mix have generated outperformance versus our benchmark.

In our mid-March update we made some changes to our modelportfolio in addition to scrapping of the Russian fund. Our modelportfolio has consisted of the following recommendations and weightings since March 13:

Investments Portfolio
J O Hambro ' European Select Values Fund 10,0%
Fidelity Asian Special Situations 10,0%
SEB Nordic Focus 10,0%
TreeTop Global Opportunities 10,0%
Sum Equities 40,0%
Fixed Income  
Norwegian High Yield Bonds* 25,0%
BlueBay Emerging Market Bond Fund 10,0%
BlueBay High Yield Fund 10,0%
Muzinich Short Duration High Yield 10,0%
BlueBay Investment Grade Fund 5,0%
Sum Fixed Income 60,0%

 *Norwegian High Yield Bonds: Siem Offshore 2018, Color Group 2015 and Aker 2015

Return 2008 2009 2010 2011 2012 2013 30.04.2014
SEB NAP -6,73% 26,55% 6,45% 0,17% 12,00% 13,01% 0,46%
Benchmark** -12,77% 11,92% 6,01% -1,06% 8,23% 15,27% 1,27%
Outperformance 6,04% 14,63% 0,44% 1,23% 3,77% -2,26% -0,81%
MSCI World -30,06% 26,51% 10,57% -4,96% 16,42% 29,57% 1,95%

Overall, we are still somewhat cautious in regard of global equity markets and we still put a lot of attention on inflation and fiscal stimulation issues, well aware of that at one stage these two factors might be the catalysts for an equity markets downturn. This is the main reason for our 60% fixed income and 40% equity allocation in our modelportfolio. With that said, we want to highlight that some of our equity fund picks have opportunistic global mandates with quite broad risk mandates. Our equity exposure is therefore seen as being quite aggressive for the time being and we carefully watch sentiment and indicators that will lead us to downgrade equity weightings as our next move.