Kraft Norge posted a return of -0.09% in May and is up 13.61% so far this year.

The price of oil fell from 110 to 92 USD per barrel as a result of positive developments in the negotiations between the U.S. and Iran regarding the conflicts in the Middle East. European natural gas prices remained unchanged throughout the month. The fund’s holdings in the energy sector declined significantly, with Equinor seeing the sharpest drop. At the end of the month, we decided to buy back into this segment, as we see some risk that the conflict could persist longer than expected. As we see it in the short and medium term, the range of possible outcomes for oil prices remains relatively wide.

In the industrials, materials, and utilities sectors, performance was more mixed. Aker and Norwegian Air Shuttle were the top contributors to returns in May. Norsk Hydro and Kongsberg Gruppen also made positive contributions. Yara, Borregaard, and Bonheur stood out on the downside.

In the technology and communications services sector, both Vend Marketplaces and Telenor saw their stock prices decline slightly.

Consumer goods companies generally made little of a splash. Orkla, however, stood out in a negative way after reporting quarterly results that were on the weak side.

The fund’s holdings in the financial sector also saw only minor price fluctuations, and we have not made any significant changes in this segment in recent weeks.

The first-quarter earnings season is now over, and the results can be summarized as better than expected. The Oslo Stock Exchange has many companies that are benefiting from higher commodity prices, which has also led to an upward revision of future earnings estimates. Once again, we have seen significant negative price swings when companies have reported weaker-than-expected results.

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