The month was characterized by increased credit spreads in global fixed income markets. The war in the Middle East has driven up energy costs and inflation expectations. In the eurozone, inflation expectations rose significantly. Both the ECB and the Bank of England signaled a more restrictive monetary policy, and the market began to price in fewer interest rate cuts than previously expected.
Global long-term government interest rates increased during the month as a result of higher future inflation expectations. In Norway, the key interest rate was kept at 4.0%. The interest rate path was adjusted upwards, and Norges Bank signaled two interest rate increases in 2026. The main message was the uncertainty surrounding future inflation.
The fund is exposed to the right sectors such as real estate, finance, insurance and banking. We consider these sectors to be robust and highly adaptable to new macroeconomic realities. As a conservative manager, we have little exposure to cyclical sectors such as oil services and shipping, where the earnings risk is higher and fluctuations greater.
At the end of the month, the fund had a current interest rate of 6.20%* and an effective interest rate of 6.78%*.
*Forcosts related to management. Will be subject to change from day to day, and is therefore no guarantee of the return in the period for which it is calculated.
Sincerely
Øivind Thorstensen & Simen Aarsland Øgreid
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