Modelportfolio September 2014

The modelportfolio was down 0.95% in September. The main negative contributions were BlueBay High Yield NOK and BlueBay Emerging Markets Bond NOK, falling 2.53% and 2.42% respectively. The Benchmark rose 0.44%. Most of the modelportfolio's holdings are hedged back to NOK while the MSCI World which is 50 % of the benchmark is not. The USD appreciation of 4 % explains most of the underperformance.

Changes in the Modelportfolio

Over the last 5-6 years the interest rate spreads have come in to a level last seen prior to the financial crises. Investors are getting increasingly anxious to rate increase and spread widening. During the turbulence this summer we saw clear evidence of this as the spreads in the US widened about 150 basis points due to sell off from retail investors. We are of the opinion that on a risk/reward basis we get better pay off by reducing the weight in high yields and increase the weight in equities.

For the modelportfolio we are reducing BlueBay High Yield NOK from 10% to 5%, and are terminating Muzinich Short Duration Bond Fond NOK which until now has had a weight of 5% in the portfolio. We are investing the proceeds in a European registered ETF that is tracking S&P 500 delivered by iShares/Blackrock.

Our Modelportfolio after implemented changes:

Investments Portfolio
Equities  
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%
Ishares Core S&P 500 UCITS 10,0%
Sum Equities 50,0%
   
Fixed Income  
Norwegian High Yield Bonds* 25,0%
BlueBay Emerging Market Bond Fund 10,0%
BlueBay High Yield Fund 5,0%
Carnegie Corporate Bond Fund 5,0%
SEB Liquidity Fund 5,0%
Sum Fixed Income 50,0%

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

Return 2008 2009 2010 2011 2012 2013 30.09.14
SEB NAP -6,73% 26,55% 6,45% 0,17% 12,00% 13,01% 2,58%
Benchmark** -12,77% 11,92% 6,01% -1,06% 8,23% 15,27% 4,69%
Outperformance 6,04% 14,63% 0,44% 1,23% 3,77% -2,26% -2,11%
MSCI World*** -30,06% 26,51% 10,57% -4,96% 16,42% 29,57% 8,42%

**Benchmark: 50/50 MSCI World og STX1
*** MSCI World in NOK