Has mentioned in the launching of our first contract as advisors, the SICAV - Optimize Invest Selection is a balanced fund portfolio oriented for long-term savings composed of equity funds and bond funds. It is exposed to shares from the Eurozone countries; Switzerland; Sweden; United Kingdom; Russia; Japan; South Korea and Canada.
The Fund bears to European High Yield, US Dollar, American High Yield, Norwegian Krone, Swedish Krona and Japanese Yen in the bond component.
Perspectives
The Norwegian economy is also part of the group of countries least impacted by the pandemic crisis. According to International Monetary Fund (IMF) data, by 2020, the GDP declined by 2.8% from the previous year.
For 2021, the outlook is optimistic (growth of 3.6%), which led the Bank of Norway to forecast an increase in the reference rate.
Most central banks want to provide maximum economic recovery stimuli through a low-interest policy: purchase of assets, packages with tax incentives… but the Bank of Norway is not in the same boat.
Norway does not have the pressure on the health side by presenting one of the West's lowest mortality rates. Also, the rising oil price (close to 60 dollars) is helping the country's accounts.
In conjunction with the increase in house prices, which is of concern to the authorities, the greater dynamism leads Norges Bank to forecast a 0% increase in the reference rate since May 2020, which is expected to rise in the second half of 2021.
By 1.4%, the Norwegian 10-year debt rate is already significantly higher than that of other European issuers with a maximum rating (AAA).
Strategic allocation
Depending on the differing central bank (Norwegian and European) positioning, the rate differential between Norway and the euro area will increase.
An expectation that should favour the Norwegian krone's exchange rate, which is still significantly undervalued vis-à-vis the euro. An attractive Yield and a "cheap" coin make NOK bond funds an attractive investment.
We reserve 5% of the portfolio to this region in a diversification logic through investment funds or bond ETFs.
Definitions:
Mutual fund – A mutual fund is a professionally managed financial product – investment fund - that gathers money from many investors to buy securities: bonds, share or both.
The advantage of this product compared to direct investment - direct purchase of shares or bonds - is that by joining many investors, the amounts available to invest considerably increase, which reduces costs and diversifies the investment (a more significant number of securities purchased).
This option is the most recommended for those who do not have much money (tens of euros are enough to invest), time to monitor the investment very regularly on a daily basis (there are fund managers who do this for you) and who have little knowledge of the financial markets.
ETFs - An exchange-traded fund is an investment fund traded on the Stock Exchange as if it were a stock. An ETF can also be called an index fund. Most ETFs track an index, such as a stock index or bond index