The fund posted a return of -3.39% in September and is up 16.07% so far this year.

The price of oil started the month at around USD 90 per barrel. Following an escalation of the conflict in the Middle East, the price of oil rose toward USD 110 per barrel around the middle of the month, before falling back to around USD 95 per barrel toward the end of the month. We believe the market is pricing in high oil and gas prices well into the future and have reduced our exposure to oil and gas companies. During the month, we reduced our exposure to Equinor and AkerBP and sold our entire position in Vår Energi. In addition, we have completely exited our positions in Frontline and BW LPG, as we believe there are better investment opportunities for the fund following the sharp price appreciation of these companies. Within the energy sector, we have also purchased shares in Odfjell Drilling, Scatec, Arendals Fossekompani, and Cloudberry Clean Energy. The fund’s energy stocks performed positively overall. Frontline and Odfjell Drilling delivered the highest returns in Norwegian kroner within the sector, while Aker BP delivered the lowest return in Norwegian kroner.

In the industrial, materials, and utilities sectors, performance was mixed but negative overall. During the month, we added Kitron, Endur, Norbit, and Elkem to the portfolio. In addition, we have increased our holdings in Kongsberg Maritime and Borregaard. At the same time, we have reduced our holdings in Norsk Hydro and Yara. The largest positive contributors this month were Kongsberg Maritime, Bonheur, and Kitron. Despite the fact that we roughly halved our positions in Norsk Hydro and Yara at favorable prices compared to the end of the month, these two companies, along with Tomra and Aker, were the largest negative contributors within the industrials, materials, and utilities sectors this month.

In the consumer goods sector, performance was negative with the exception of SalMar, which posted a slightly positive return. Seafood stocks have been characterized by relatively low salmon prices due to an unusually high supply of salmon following a period of strong biological conditions and low disease incidence. Bakkafrost and Austevoll Seafood were the largest negative contributors in September. Orkla continued the previous month’s price decline. At the same time, the company announced a significant share buyback program, and there were several insider purchases during the month. We took advantage of the price decline to increase our position in Orkla.

The financial sector also posted a negative month. Storebrand and, in particular, Gjensidige were the month’s largest negative contributors to returns measured in Norwegian kroner. DNB posted a slightly negative performance, while Sparebank 1 Sør-Norge and SpareBank 1 Nord-Norge posted slightly positive performances. Gjensidige, in particular, experienced a drop in its share price due to fears that AI agents, such as Meta’s Muse, could disrupt the business models of insurance companies.

In the technology and communications services sector, Vend Marketplaces had an exceptionally poor month, with its stock price falling 18%—a decline that appears to be driven primarily by fears that AI will disrupt Vend’s business model. Telenor also had a weak month. We have slightly increased our position in Vend following the price decline and reduced our holdings in Telenor over the course of the month. At the same time, we have added Pexip to the portfolio.

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

Fredrik Bryne