DNB High Yield Update October 2019

The return in September was -0,43% in NOK for the institutional share class. This reduces the YTD performance to 5,02% as of October 7th.

Launch of EUR distributing Retail share class

Please find the returns for other share classes in the table below.

The fund returned around -0.43 percent in September. The main reason for the negative return being a relatively weak development of bonds from issuers in the oil service sector. The best performing sectors in September have been conglomerates and shipping.

The subsector returns show a clear picture. As soon as global growth concerns came up, spreads in Offshore and Seafood widened, resulting in a weak development of these sub-indices.

The main global events this year, more specifically Brexit, the US-China trade war and the slowdown in global economic growth, also had its influence on markets in September. Some industry sectors such as oil and offshore were particularly weak, but overall, most sectors have been reasonably stable. The primary market has rebooted after the summer and a number of new issuers have entered the market.

The Norwegian central bank hiked the interest rate in September and lowered the interest rate path for the next couple of years. The rate hike was almost fully priced in so the market reaction was muted. In our view, this was the last rate hike in the recent hiking cycle (from 0.5% to 1.5%). The Norwegian economy is still strong and will remain so for the rest of this year. Looking forward to 2020 and 2021 we expect to see the growth in the Norwegian economy slow down and we might see interest rate cuts from the Norwegian central bank.