The fund posted a return of 6.59% in July and is up 15.15% so far this year.

The price of oil rose from 73 to 90 USD per barrel as a result of renewed military tensions between the U.S. and Iran. The fund’s holdings in the energy sector posted very strong price gains. Equinor was the main contributor to returns this month, and the company also reported better-than-expected quarterly results.

In the industrial, materials, and supplies sectors, performance was more mixed. Tomra and Borregaard stood out as positive performers. Norsk Hydro saw a slight decline.

Among consumer goods companies, seafood companies finally had a solid month and were the main driver of the fund’s outperformance relative to the benchmark index. So far this year, the sector has been characterized by lower-than-expected salmon prices, as well as significantly higher feed prices. However, forward earnings expectations have now come down considerably, resulting in an attractive risk-reward ratio. There are strong indications of negative supply growth in the second half of the year, and companies are also benefiting from favorable pricing in next year’s earnings estimates.

The financial sector also saw a generally positive trend. Storebrand rose nearly 10 percent and was the fund’s top-performing stock in the sector.

In the technology and communications services sector, Telenor saw its stock price dip slightly after reporting quarterly results that were somewhat weaker than expected. Vend Marketplaces saw less movement in its stock price.

The second-quarter earnings season has just begun, and so far we have seen some significant price swings on the day reports are released. We expect this trend to continue to influence the markets going forward. Valuations on the Oslo Stock Exchange relative to 12-month forward earnings have declined somewhat in recent months and are now below their historical average.

Kraft Norge’s portfolio is well diversified across sectors, characterized by mature companies with strong market positions in their segment. The selection process also emphasizes that the companies have a solid balance sheet and positive cash flows over time.

Sincerely

Stein Frode Aaseng