In fact, new all-time highs were again reached on a number of stock exchanges around the world, from Stockholm and Oslo to New York and Frankfurt. What a difference a year makes!
The exuberance is rather muted, though. New all-time highs inevitably spark this question from our clients: Now that the market has reached such new heights, should I be worried? With a slight twist to an iconic rock song: The present's so bright ... and we're not wearing shades. Maybe we should?
The short answer is a clear yes: You should be worried. If you've put your money in risky assets, you should always be worried, in the sense that you should be mentally prepared to lose part or all of your investment. You can manage this risk by having a sensible investment philosophy, but you can't make it go away.
A succession of all-time highs, however, should not be a source of concern. This does not signify risk. In a sense, it does exactly the opposite:
Stock indices don't hit all-time highs because they have climbed so high. They do so because, well, it's about time. The waiting time depends on the volatility. More volatile stock prices mean that all-time highs will be reached infrequently and irregularly, while less volatile markets imply more frequent all-time highs.
Remember when your savings account actually generated some interest income? Back then, your savings account hit new all-time highs every single day. That didn't bother you, did it?
Alas, stock markets don't reach new all-time highs every single day. They do so occasionally. But you wouldn't risk trading your stocks for an inert bank account, would you?
Finn Øystein Bergh
Chief Economist & Strategist
Fund updates for April 2021
Pareto Investment Fund
In our opinion, the fund is well prepared for economic normalisation and reopening.
Pareto Aksje Norge
It was another positive month in the stock market, and the same goes for our portfolio.
- Pareto Aksje Norge A
- Pareto Aksje Norge B
- Pareto Aksje Norge C
- Pareto Aksje Norge D
- Pareto Aksje Norge I
Pareto Nordic Equity
The fund continued to develop well in April. First quarter reports influenced the share prices of the companies in the portfolio, as well as the Nordic equity market.
Pareto Global
Falling interest rates led to growth companies doing relatively better than value companies this month. Nevertheless, the fund had a strong month, driven by good Q1 reports.
Pareto Nordic Return
The world's financial markets continue to soar. In April, the MSCI World Index rose by four per cent, the Nordic region by three per cent and our fund by a pleasant five per cent.
Pareto Nordic Alpha
The fund continued to develop well in April. First quarter reports influenced the share prices of the companies in the portfolio, as well as the Nordic equity market.
Pareto Nordic Omega
The fund continued to develop well in April. First quarter reports influenced the share prices of the companies in the portfolio, as well as the Nordic equity market.
Pareto Nordic Corporate Bond
April was another good month, sustained by the positive sentiment and low volatility for risk assets globally.
Pareto Nordic Cross Credit
A positive market sentiment with low volatility became April's signature and the fund delivered yet another good month.
- Pareto Nordic Cross Credit A (NOK)
- Pareto Nordic Cross Credit H (NOK)
- Pareto Nordic Cross Credit H (EUR)
- Pareto Nordic Cross Credit H-I (NOK)
- Pareto Nordic Cross Credit I (NOK)
Pareto ESG Global Corporate Bond
The ESG development remains strong in both Europe and the United States, and the fund had a strong and stable development during the month.
Pareto Obligasjon
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.