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So much for taking this in stride.

Or maybe not. I'm no expert in virology – nor blackswanology, for that matter (the black swan metaphor represents an unexpected, unforeseeable event of great significance). But I wouldn't challenge claims that the coronavirus is close to being the perfect black swan.

And yet – what's actually lost so far?

No, I won't subject you to the proverbial litany of negative percentages. Instead, here's a list showing the setbacks in terms of months lost, or rather the months to which investors have been set back in assorted markets – give or take some imprecision in volatile markets.

Norway OSEBX: January 2019
FTSE UK: January 2019
ICE BofA Euro HY (B): April 2019
ICE BofA Euro HY: June 2019
DAX Germany: August 2019
MSCI World Index: September 2019
Nikkei 225: September 2019
OMX Stockholm 30: October 2019
S&P 500: October 2019
ICE BofA US High Yield: December 2019
US investment grade: all-time high ...

Of course, things might turn terribly worse. I have absolutely no idea what's going to happen with the spread of the coronavirus, at least no qualified idea. And, as disclaimers go, professed ignorance is no better guarantee of future performance than past performance. I just wanted to point out that so far, the financial unease seems to have been overplayed in the media.

Er, wait a minute ... that's not really news, is it?

Fund updates for February 2020

Pareto Investment Fund
Coronavirus fears severely affected oil and other commodities, cyclical businesses, and tourism. The price falls were relatively stronger for smaller and medium-sized companies. All of this contributed to the fund falling significantly more than its benchmark index.

 

Pareto Aksje Norge
February was a month of great contrasts. Most of our portfolio companies delivered quarterly reports in line with, or beating, market expectations, while coronavirus fears dampened the mood towards the end of February. The portfolio performed somewhat better than the market.

 

Pareto Nordic Equity
Coronavirus fears severely affected oil and other commodities, cyclical businesses, and tourism. The price falls were relatively stronger for smaller and medium-sized companies, and the Norwegian market fell more than the rest of the Nordic region.

 

Pareto Global 
February was a tough month for global stock markets and the portfolio fell along with the market. So far this year, however, the fund is only moderately down, after a good start to the year.

 

Pareto Nordic Return 
Coronavirus fears severely affected oil and other commodities, cyclical businesses, and tourism. The price falls were relatively stronger for smaller and medium-sized companies, and the Norwegian market fell more than the rest of the Nordic region.

 

Pareto Nordic Alpha
The fund fell somewhat in a weak stock market in February, hammered by the coronavirus.

 

Pareto Nordic Omega
The fund fell somewhat in a weak stock market in February, hammered by the coronavirus.

 

Pareto Nordic Corporate Bond
After a strong start to 2020, the fund fell slightly in February, particularly during the last week of the month. Portfolio adjustments through February were cautious.

 

Pareto Nordic Cross Credit
After a strong start in January, much of the fund's positive performance was reversed in February, particularly in the last week of the month. While we do not see any real threat to the credit quality of our investments, we do acknowledge that the global market jitters have imposed an increased risk premium on our market as well.

 

Pareto Global Corporate Bond
The fund was very cautious during the month. The only new issue we participated in was an investment grade company: Nasdaq. This was a good strategy.

 

Pareto Høyrente
This will be the very last monthly commentary for Pareto Høyrente, as the fund will now be merged into Pareto Nordic Cross Credit (PNCC). We thank everyone involved over the years for your trust and welcome you all to PNCC.

 

 

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.

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