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Long US government bonds, as measured by the S&P U.S. Treasury Bond 10+ Year Index, returned an impressive 9.14% – the second-best month in the past 10 years. That’s a nice consolation after October closed 46% down from the peak in August 2020. The S&P 500 index, incidentally, posted a near identical return, at 9.13%.

Both figures testify to a whole lot of risk, which happily came out on the positive side this month. If you care about the standard risk figures, you can note that annualised volatility in this treasury bond index has been 15.8% since its peak, as compared to 17.7% for the S&P 500. Not that different, really.

If you find it strange that I choose to make a comment on risk now, I’d like to point out that it is precisely in times of exuberance that it is worth weighing. When everything looks dark, you’re probably thinking too much about it.

In the meantime, let me indulge in a bit of exultation about our own products. After all, when you ask if we’re concerned about the stock market pricing, we tend to remind you that you’re not invested in the stock market. You’re invested in our products, which typically have more moderate pricing. So why not turn the attention to the returns in these products.

As it happened, all our products delivered a positive return in November, despite the Norwegian market being far less jubilant than the S&P 500. It’s not the first time they’ve all been positive, but I dare say the accumulated return is a personal best for our company: After eleven months of 2023, our clients have an aggregate return of almost NOK 7.8 billion.

Lest we become too smug, I need to remind myself – and you – what these NOK 7.8 billion really represent: It’s the reward for having assumed risk. Please keep that in mind should returns be negative for a while.

 Historical returns are no guarantee for future returns. Future returns will depend, inter alia, on, market developments, the portfolio manager’s skill, the fund’s risk profile, as well as fees for subscription, management and redemption. Returns may become negative as a result of negative price developments. This is marketing communication.



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