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Through the ages we've actually had quite a few alternatives, from 24 December to, say, 31 August. If we had still been using the Julian calendar, we would have had to put off celebrating New Year's Eve by a full 13 days. (Some people still do, in orthodox countries like Russia and Serbia.)

A similiar point applies to measuring financial returns. Official records now show that the Oslo Børs benchmark index lost 1.8 per cent in 2018. If, every year, we had stopped counting one month later, last year's return would have been boosted by almost five percentage points. In Stockholm, the OMX 30 would go from losing some 10.7 per cent to stopping the bleeding at 4.9 per cent.

On the other hand, a similarly tilted 2017 would have detracted from the annual return counts in both Oslo and Stockholm, albeit by a lesser amount.

After a truly lousy end to 2018, markets came back with a vengeance.

In some years, it really makes a difference. In 2016, the MSCI World Index delivered a return of 9.0 per cent in local currency. If the year had ended in January, the annual return would have been 16.7 per cent. If, instead, it had ended in November, the figure would have shrunk to a puny 3.8 per cent.

See? Somehow, we attach special importance to the 12 months that end exactly on 31 December. Inevitably, this molds our perception of events in ways that may distort our view. Over time, of course, the choice of intermittent closing dates makes absolutely no difference.

The reason I bring this up, if you haven't already guessed it, is the wonderful rebound we experienced in January. After a truly lousy end to 2018, markets came back with a vengeance. In local currency, the obviously well diversified MSCI World Index rose by more than 7.2 per cent, a return surpassed only twice since 2009. Spreads on US high-yield bonds, no less subject to closing date effects, declined by almost one percentage point.

A time for rejoicing, then? A new, improved New Year's Eve? Well, not really. Just a time for remembering that no single figure holds the final truth – even if that figure finds its way into your tax filings.

Fund updates for January 2019

Pareto Investment Fund
The fund rose just over eight per cent in January, in excess of three percentage points ahead of the benchmark index. In other words, a good start after the second half of last year was a bleak affair.

 

Pareto Aksje Norge
The year and the month started abruptly, with a partial reversal of the December decline. January ended up just under five per cent for the portfolio.

 

Pareto Nordic Equity
The fund rose over two per cent in January, just over one percentage point behind the benchmark index.

 

Pareto Global 
At the end of January, eleven of our 24 portfolio companies had reported figures. The numbers were generally good, and nine out of these eleven companies delivered as expected or better.

 

Pareto Nordic Return 
The fund increased about two per cent in a favourable Nordic market. There should be an upside in the current year. Two factors can release the potential.

 

Pareto Nordic Alpha
At the end of January, the fund's value was unchanged from the previous month. The Nordic stock market rose and regained a third of the decline from the end of 2018.

 

Pareto Nordic Omega
At the end of January, the fund's value was unchanged from the previous month. The Nordic stock market rose and regained a third of the decline from the end of 2018.

 

Pareto Nordic Corporate Bond
Pareto Nordic Corporate Bond performed well in January. The market was generally strong and reclaimed some of the lost ground from the last two months of 2018.

 

Pareto Global Corporate Bond
After a few hesitant trading days in 2019, the risk appetite in the market has increased significantly. New issues within both investment grade and high yield are now underway. The terms and conditions are considerably better for us investors compared to 9 months ago and we have already been active in the month of January. Credit spreads have decreased and liquidity is much better.

 

Pareto Høyrente
Pareto Høyrente performed nicely in January, with a stable return. The market was generally strong and reclaimed some of the lost ground from the last two months of 2018.

 

 

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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