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Both stocks and bonds took a beating, with the MSCI World index posting its worst month in almost ten years and spreads on US high-yield bonds shooting up by 104 basis points.

The Nordics fared better, in equities as well as fixed income, though we'd be hard-pressed to find grounds for rejoicing.

Notable exceptions to the market malaise were government bonds in countries like the USA and Germany, clearly a flight to safety, and Italian government bonds – a relief rebound following budget adjustments.

A lousy month indeed.

For the record: In local currency terms, December was the 19th worst month out of all 588 months since inception of the World index.

Scared? You shouldn't be. Chew the numbers differently and you will notice that such a lousy return can be expected every 30 months or so. That's the name of game, really. Stock markets do slide from time to time, just as occasional spread hikes are a fact of life in bond markets. If nobody told you, let me be clear: There'll be months like this.

Chew the numbers differently and you will notice that such a lousy return can be expected every 30 months or so.

Now, such months certainly make life more difficult for our sales staff and investment advisers. It's notoriously difficult to buy the dips and sell the rallies, not to mention argue convincingly against the common mood.

For our portfolio managers, however, things just got a bit easier. Whereas they spent part of last year scratching their heads in search of securities worth buying, they now enjoy a distinctly expanded menu. For fixed income in particular, higher yields make it notably easier to deliver appealing returns going forward.

So ... three cheers, then?

Nah. We do prefer positive returns in all our mandates, each and every month if possible, and certainly every year. December could have been a lot better.

But please remember: There'll be months like this.

Oh, and by the way: Have a wonderful and prosperous new year!

Fund updates for December 2018

Pareto Investment Fund
December was the third month in a row with significant negative returns in the market, and even more so for the fund.

 

Pareto Aksje Norge
For the full year, the market ended down 2.2 per cent, while the portfolio showed a solid excess return and ended the year in positive territory.

 

Pareto Nordic Equity
The fund has dropped since its launch on October 31. However, we consider the current portfolio a good starting point for positive returns in 2019.

 

Pareto Global 
Alas, December did not turn out to be a good end to the year. After nine consecutive years of positive returns, 2018 ended in the red.

 

Pareto Nordic Return 
Nordic equities declined around six per cent in 2018, making the Nordic stock market somewhat weaker than the Norwegian market.

 

Pareto Nordic Alpha
A weak Nordic stock market resulted in a negative development for the fund in December.

 

Pareto Nordic Omega
A weak Nordic stock market resulted in a negative development for the fund in December.

 

Pareto Nordic Corporate Bond
Despite challenging international markets, all share classes in Pareto Nordic Corporate Bond have delivered positive returns for the year.

 

Pareto Global Corporate Bond
The effective interest rate and the cash return in the fund are considerably higher now that we enter 2019.

 

Pareto Høyrente
Money market rates continue upwards. All other things being equal, this means that our bonds now pay a coupon that is around 0.50 percentage points higher than at the beginning of the year.

 

 

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.

Invest in our funds

Our product offering include equity funds, fixed income funds, balanced funds and alternative funds. The excess return in our funds is primarily generated from security selection and thorough company analysis.

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