First and foremost, I'd like to thank all you unit holders for your trust. Some of you have been with us since the start, while even more have joined us along the way. We are very pleased that the first two years have been a great journey for everyone. Since inception, the fund has now delivered a return of more than 18 per cent, and in the same period, total assets have grown to NOK 1.4 billion. Both figures show that our management philosophy, which is the very foundation of the fund, is working very well.
At launch in 2019, the world looked quite different. The economy was relatively stable, global growth was something as rare as synchronised and, not least, geopolitical conditions were calm. In January 2020, we therefore assumed that it would be a year with little new, where we focused on harvesting interest income for our customers. How wrong could we be?
The first quarter of 2020 can be briefly summarised as the worst period in the last 20 years. The coronavirus ensured that all asset classes were hit hard - regardless of quality, and most fell between 15 and 30 per cent. It was solely fear of the coronavirus that drove prices down. The volatility lasted about two weeks, and we realised early on that this could also be a very good opportunity for the fund. Kraft Høyrente made tough choices, and we stuck to the management philosophy of searching for quality, both on the way down and on the way up. We built up a large cash position early on and bought into companies that had never previously been available to us. At the same time, we rotated the portfolio and sold off holdings that had poor prospects due to the coronavirus. As a result, the fund rebounded quickly, and despite the turmoil caused by the coronavirus, we delivered a return of 6.91 per cent in 2020.
We stuck to our strategy going into 2021 and see no reason to change course. The fund has delivered well so far this year with a return of around 7.5 per cent. We have done well on most cyclical investments, and have also positioned ourselves well in technology such as IT, data warehouses and e-commerce players.
The fund currently has a solid portfolio that delivers solid operational and financial results. The portfolio is very well positioned to deliver good risk-adjusted returns in the years to come.
In conclusion, I would like to thank all unitholders again for their trust. Without you, the fund's success would not have been possible.
Regards
Øivind Thorstensen
