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A-share
A share in a company carrying specific rights. See share classes.

Active management
An investment ideology that focuses on companies, and which is based on the belief that research pays: Hard work, knowledge and talent is profitable, because there are “good” and “bad” companies. It is possible to change one’s risk/return ratio by building the portfolio from the bottom up with “good” companies – copying a certain index composition does not necessarily provide the best portfolio. With an active investment ideology, it is possible to choose one or a combination of several investment styles:

Growth: The manager focuses on companies in an attractive industry, with historical and expected growth in sales and earnings, as well as strong management.
Value: The manager focuses on companies that have low valuations in relation to earnings, that are traded at a discount from book capital, that are being overlooked by the market in general and have received little research attention, or that have hidden values.
Momentum: The manager buys when the share price is rising and sells when the share price is falling.
Top down: The manager first finds the best geographic areas, then industry, then company.
Bottom up: The manager primarily focuses on the companies, then the framework.

AMS
A Norwegian scheme for tax deductible savings in shares through investments in the equity market either directly in individual shares or through equity funds. The scheme was terminated effective the financial year 2000. The scheme is described in more detail under tax favourable products.

Articles of Association
All investment funds have to prepare articles of association. The articles of association shall contain all material information about the fund and its management. In Norway, the articles of association must be approved by the Norwegian Banking, Insurance and Securities Commission.

B-share
Share with limited rights. See share classes.

Balance sheet
Shows the company’s financial condition. A specification of the company’s assets, liabilities and equity capital. The balance sheet is set up so that the total on the left hand side is equal to (balances with) the total on the right hand side. The company’s assets are entered on the left hand side of the balance sheet (the asset side). Liabilities and equity capital are entered on the right hand side (the liabilities side).

Balanced fund
Balanced funds are investment funds that are not defined as pure equity funds or fixed income funds. A balanced fund may have a more or less fixed overweighting of shares or fixed income securities, but the proportion of different securities may also change during the life of the fund (life cycle fund). Se Investment fund for more information.

Basic price
See Net asset value.

Benchmark
A benchmark is an index, which expresses a weighted composition of the shares (or other securities) in a market. Changes in the value of the index is an indication of the average performance of the market.

Management companies choose an index as a benchmark for their investment funds, which is composed of securities that it is reasonable to compare the fund with, considering the fund’s investment mandate. A benchmark may therefore be used to compare to what extent the management company has succeeded in the management of its funds. For example, if the return of the fund during a specific period has been greater that the return of the benchmark, the management company has done a good job.

Bond
A bond is an interest-bearing security, a loan confirmation, that upon issue has a maturity of more than one year. The bond issuer (the borrower) may be public authorities, banks or large private enterprises. Bonds are redeemed by the issuer upon maturity, and in the period from issue to maturity the issuer pays interest, often called the coupon rate, to the bond owner. Bonds are normally freely negotiable, and there is a second-hand market for the buying and selling of bonds. There is an inverse relationship between the price of a bond and changes in the market rate of interest.  For example, if the market rate of interest rises, the price of a bond, and thus the price of a bond fund, will immediately fall.

Bond fund
A fund that primarily invests in interest-bearing securities with medium to long term maturities. Funds may have limited mandates, e.g. to just invest in government bonds. 

Brokerage fee
The fee you have to pay to a broker to do the work associated with trading securities on your behalf. Both the buyer and seller must pay a brokerage fee.

C

Cash flow
The difference between payments in and out during a period.

Central bank
Its most important task is to develop a country’s foreign currency policy, manage the public currency reserves, regulate payments to and from abroad and provide loans to a country’s other banks.

Credit risk
The risk of a borrower not meeting his payment obligations.  

Currency
The monetary unit of a country and its legal tender. The origin of the Norwegian term for currency, “valuta”, is value.

Currency exchange rate
The number of currency units you have to pay for a unit of a foreign currency.

Custodian
It is stipulated by law that all investment funds must have a custodian to receive and provide safe custody for the fund’s assets. This means that all assets of an investment fund (securities, liquid assets) must be deposited or entered into an account of a securities depository by this custodian. The custodian is also the body that on instruction from the management company receives deposits to the investment fund and makes payments from the fund, either due to a securities trade that the management company has made on behalf of the fund, or due to subscriptions or redemptions by unit owners. The custodian also has an additional supervisory function, in that it should ensure that the management company’s transactions in the individual funds are in accordance with the investment fund legislation and the fund’s articles of association. An investment fund’s custodian is usually a bank, but the function may also be carried out by a securities company.

The custodian is completely independent of the management company and shall ensure that the management company’s dispositions and instructions are founded on law or the articles of the investment fund. The role of the custodian is statutorily regulated to protect the unit owners by keeping the investment fund’s assets separate from the management company’s, and to control the dispositions of the management company.

Cyclical fluctuations
Fluctuations between times of economic growth and times of economic recession.

D

Deflation
A reduction over time of the general price level, i.e. an increase in the value of money. The opposite of inflation.

Diversification (risk diversification)
An investment fund puts its assets into many different securities, which results in fewer fluctuations in the value of the fund (i.e. less risk) than by placement in one or a few individual securities. In other words: by diversifying the fund’s portfolio the fund achieves risk diversification. The Norwegian Securities Funds Act sets minimum requirements for a fund’s diversification.

Dividend
The return received by the shareholders on their shares. Dividend is paid by companies if the profits are sufficient to cover it and other provisions, and will therefore vary from year to year according to the surplus generated by the company. Dividend is paid once a year.

Duration
A concept that, somewhat simply expressed, indicates the weighted average maturity (how long it is until a fixed income security matures) of the portfolio of a fixed income fund. If a fixed income fund has a duration of 0.23, it means that the fund’s average security matures in 0.23 years. When a loan matures and the remaining interest is paid, this loan has to be replaced by a new loan. See also Interest rate sensitivity.

Equity funds
An equity fund invests primarily in shares, but may also invest in interest bearing securities (it is then called a balanced fund). A share is an interest in the equity capital of a company. The return available to an equity fund is primarily capital gains (or losses), since such funds receive no current interest. Dividends paid by companies to shareholders will accrue to the unit holders in an equity fund and form part of the return. Equity funds that do not pay dividends out directly to its unit holders will reinvest dividends received in new shares. There are many types of equity funds on the market. What differentiates them is who manages them, and how they are managed (the fund’s mandate). Mandate differences usually reflect where the funds may invest (from which geographic or industrial sectors shares may be picked). The major categories are global funds, industry funds, regional funds and national funds. Generally speaking, a fund with a limited mandate, such as a national fund or an industry fund (narrow fund), will carry a higher risk than a fund with a broad mandate and a large spread over regions and industries (broad funds).

Effective rate of interest
Says something about how expensive a loan is. When banks state their rate of interest, it is usually a nominal rate. The effective rate of interest takes into account whether interest is paid in arrears or in advance, how many terms there are each year, as well as commissions and fees. The effective rate of interest shows the total cost of a loan converted to the annual rate of interest payable in arrears. The effective rate of interest is suitable for comparing costs of different loans.

Equity capital
The difference between liabilities and assets in the balance sheet. Equity capital is equivalent to net asset value.

Fixed interest rate
The interest rate of a loan may be locked in for a period of time, e.g. five years. This rate of interest is usually higher than the floating rate of interest, but it provides certainty if you assume that interest rates will increase in the future. If you want to be certain of how much you have to pay for your loan in the years ahead, a fixed interest rate may be a good alternative, because you will be able to plan your costs better. It is the opposite of floating interest rate.

Finance company
A company that lends money – particularly for business purposes.

Financial markets
All markets where participants offer or seek credit. We talk about the share market, the money market, etc.

Financial policy
Government decisions that impact different revenue and expense items in the government’s budget.

Fixed-rate period
The coupon rate of an interest bearing security is usually fixed for a certain period, the fixed-rate period. The duration of the period may vary from security to security. One bond may, for example, adjust the coupon rate every third year, whereas another bond may adjust the rate every other year. However, most bonds have a fixed coupon rate for the duration of the loan.

Fixed income fund
Fixed income fund is the collective term for funds that invest only in fixed income securities (interest bearing securities such as notes and bonds) and bank deposits.  A fixed income fund will normally achieve better terms of interest than what private individuals are able to on their own. For larger institutions, the use of fixed income funds is a good tool for risk diversification.

Floating interest rate
The rate of interest on a loan follows the market rate. The rate is usually lower than for a loan with a fixed rate of interest. However, floating interest rates provide more uncertainty and less opportunity to plan your expenses. Floating interest rate is recommended as long as the rates are stable and are not expected to increase much.

Foreign exchange policy
Measures instituted by governments to influence currency exchange rates.

Free policy
A free policy is a security entitling a person to pension benefits accrued from prior employments (with respect to defined benefit schemes). With the issue of a free policy the responsibility for these pension benefits have been transferred from the employer to an insurance company, i.e. the return on the policies is dependent on the insurance companies’ management and their framework conditions.

The free policy first becomes payable on the day the employee retires, i.e. normally at 67 years of age, unless there is no lower statutory retirement age. Payments are taxed as income, with up to 45 percent tax under the current tax regime in Norway.

Fund
A joint ownership in the form of a fund of assets that the co-owners have built up by buying units in the fund. Experts employed by the fund allocate the assets to shares, bonds and possibly bank deposits or other things that may provide a profitable return. The profits may also be distributed to the unit owners or added to the fund’s assets so that each unit increases in value. Investing directly in a fund is not subject to any lock-in period.

Fund of funds
A fund of funds is an investment fund that is investing its assets in one (or perhaps several) underlying investment funds.

Fund unit
A customer who puts money in an investment fund will be issued units in the fund (also called shares). The number of units issued will depend on the fund’s net asset value per unit, which indicates the value of one unit in this fund at the time of purchase. Each unit in an investment fund has the same value, and each unit has equal rights in the fund.

Hedge fund
There is no exact definition of what constitutes a hedge fund, and the variations between the individual funds calling themselves hedge funds may be considerable with respect to investment options and risk profile. A hedge fund usually assumes significantly higher risk than an ordinary investment fund, and is therefore a product designed for risk-seeking professional investors. A hedge fund is not obliged to comply with the Norwegian Securities Funds Act or the EU’s UCITS Directive, and hedge funds are free to use different financial instruments. They may apply leverage, and are usually free to use different derivatives. A hedge fund may also sell securities short, which entails that the fund sells borrowed securities, for then to buy the borrowed securities back at a later time (in other words, attempting to profit from a falling market).

High-interest (savings) account
A deposit account in a bank providing a higher rate of interest than e.g. a checking account. A high-interest account is usually a long-term savings account with limitations on the number of annual withdrawals.

Index
See Benchmark.

Index fund
An index fund is an investment fund that is managed relatively passively in relation to the fund’s benchmark (replication of an index). See Management style. Broadly speaking, index management may be conducted in three ways:

Full replication: Entails that the fund invests in the same securities making up the index, and with the same weighting in the portfolio as the weighting in the index.
Partial replication: Entails that the index is split into different elements (e.g. different industries) and that the fund follows the index by investing in accordance with the different elements’ weighting in the index (i.e. without investing in exactly the same securities making up the index).
Optimised selection: Entails that the fund weighs the cost of investing in line with the index up against the consequence in the form of expected return deviation by deviating from the index. A profitability analysis is performed to evaluate whether the fund will be better served by following the index or deviating from it.

Regardless of choice of approach, index management entails that the return of the index fund will correlate quite closely with the performance of the index.

Information ratio (IR)
A fund’s information ratio (IR) says something about how the fund has performed in comparison to its benchmark. IR accounts for both return and risk. If the fund has outperformed the market, it will receive a positive IR, whereas it receives a negative IR for poorer performance. As the name implies, IR is a ratio, and is calculated as follows:
Information Ratio (IR) = Differential return / Relative volatility
The differential return shows the deviation of the fund’s return relative to the market, whereas relative volatility shows how the fund’s return fluctuates relative to the return of the index.

Interest bearing securities
An interest bearing security represents a claim on an outstanding debt to be repaid by a borrower. Interest bearing securities may have different maturities (maturity is the time until the loan is repaid). Money market funds invest in short-term interest bearing securities, primarily notes, with a maturity of less than one year, whereas bond funds, as the name implies, invest in bonds, i.e. interest bearing securities with a longer maturity.

Interest rate sensitivity (modified duration)
The interest rate sensitivity of a fixed income fund is an expression of the immediate percentage change in the fund’s net asset value, if the effective rate of interest of all securities held by the fund is changed by one percentage point. A reduction in the general level of interest will increase the net asset value of a fixed income fund, whereas an increase in the general level of interest will reduce it. If the fund has a high interest rate sensitivity, a fall in the general level of interest will result in a relatively large increase in the net asset value, and vice versa.

Over time, the interest rate sensitivity of individual funds will normally vary within the sensitivity area of the benchmark. Deviations between the interest rate sensitivity of the fund and the benchmark arise when the manager actively tries to increase the return of the fund in relation to the benchmark. “Minimum/maximum interest rate sensitivity” refers to outer limits imposed on the management company for movement of the fund’s interest rate sensitivity.

Example:
If the benchmark of a fixed income fund has an interest rate sensitivity of 3, and the general level of interest increases by ½ percentage point, the benchmark will immediately experience a 1.5 percent reduction in value. The price of a fund using this benchmark, and which, for example, is subject to a minimum/maximum limit for interest rate sensitivity of 1 and 4 respectively, will fall by minimum 1 percent and maximum 4 percent per percentage point change in the level of interest, depending on the interest rate sensitivity of the fund at the time of the rate increase.

Interest payable in advance.
Interest that has to be paid in advance. Interest paid in advance is more expensive than interest paid in arrears at the same nominal rate of interest.

Investment fund
An investment fund is a collective investment portfolio, in which many persons have come together to invest their assets in the securities market, and where the management and different administrative tasks are performed by a management company.

Investment mandate
An investment mandate provides guidelines for how a management company may invest the assets of individual investment funds. In addition to the investment universe, the investment mandate may also contain guidelines for the management style of the investment fund.

Investment universe
An investment universe defines possible areas where an investment fund’s assets may be invested. The universe may be limited to comprise special securities (e.g. shares), investments in specific geographic areas (e.g. Asia), investments in certain industries (e.g. only technology shares), or a combination thereof.

Issue
Offer to subscribe for shares, primary capital certificates or bonds.

Life annuity
A savings and insurance scheme where the first payment takes place at least six years after the first contribution. Further payments are then distributed over at least six years. It may also continue as long as the beneficiary is alive. The return is not taxable during the saving period. The premium may be paid with a lump sum or in annual or semi-annual amounts. Life annuities are exempt from Norwegian wealth tax.

Limited company
An enterprise form. A limited company is a company with a certain capital distributed over one or several shares. The owners’ (shareholders) liability with respect to the company’s obligations is limited to the number of shares they own (limited responsibility). It is now common to differentiate between private limited companies (Ltd.) and public limited companies (Plc.).

Net asset value per unit (NAV)
The net asset value per unit (also referred to as the base price) indicates the market value of one fund unit.  (The individual unit owner will normally own several units in the investment fund.) The net asset value per unit is calculated by adding up the market value of all securities in which the fund has invested. Then the total costs accrued to the fund on the relevant day are deducted, and the amount is divided by the number of outstanding units in the fund. For most investment funds, the net asset value per unit is calculated daily. The number of units in an investment fund goes up with the subscription of new units in the fund, and goes down with the redemption of units. The performance of the net asset value per unit during a given period is an expression for the net return achieved by the investment fund during this period.

Nominal rate of interest
The nominal rate of interest is the rate stated by the bank for one year. It is also called annual interest rate (p.a. = pro anno). See also Real rate of interest.

Norwegian Banking Complaints Committee
A Norwegian tribunal that handles complaints regarding banks, finance and investment funds. The Norwegian Fund Management Association became associated with the Norwegian Banking Complaints Committee effective 1 January 2002. For more information, please see Complaints.

Norwegian Futures and Options Clearinghouse (NOS)
NOS is a clearing house for the Norwegian derivatives market. The Norwegian derivatives market consists of standardised options, futures and forward contracts traded at the Oslo Stock Exchange, in addition to OTC options (over the counter/ad hoc options), which are not quoted on the stock exchange. NOS executes clearing by stepping into the transaction between buyer and seller and becomes the legal counterpart of both the original parties. 

Note
Notes are interest bearing securities comparable to bonds. The difference between the two types of securities is that notes have a maximum maturity of one year. 

Offer Price
The price set for the shares, primary capital certificates or bonds upon issue. See also Subscription price.

Operating profit/loss
The ordinary result of business operations before deduction of interest, extraordinary items and taxes.

Option
An agreed right, but not an obligation, to purchase or sell a certain object or service during a certain period of time. Is often used in relation to an agreement to purchase or sell securities.

Oslo Stock Exchange
The central provider of quoted prices on funds and shares in Norway. Founded 1818. See also Stock Exchange.

Passive management
A passive investment ideology is based on the market always being right with respect to the pricing of shares. It assumes that all available information about a company is reflected in the share price, and to research and calculate the value of the company is a waste of time. The ideology maintains that share prices only move because new, unpredictable information becomes available about the companies. The ideology is not interested in the specific shares being bought, but presupposes that the composition of a market (a market index) is best, and that no other combination will provide a better relationship between risk and return. The risk/return ratio is determined by choosing which index to invest in.

Planned economy
An economic system where the government owns all means of production in a country and determines production and distribution of benefits.

Portfolio
A portfolio is a collection of securities. For example, a share portfolio is put together to achieve a desired risk and return.

Price
The price of currency, shares or other securities. It is the prices of securities that are quoted on a stock exchange. For example, if a share is sold for more than the quoted price, it is sold at a premium. If the share is sold for less than the quoted price, it is sold at a discount.

Prospectus
Management companies are obliged to prepare a prospectus for each of the investment funds they manage. The prospectus must present the fund’s articles of association, provide a brief explanation of applicable tax regulation for the investment fund and its unit holders, as well as provide information about rights and obligations carried by a unit in the investment fund. Prospectuses are available from individual management companies.

Q

R 

Real capital
In economics, a distinction is usually made between real capital, such as buildings, machinery, tools and other actual means of production, and financial capital, such as cash, bank deposits, securities, etc.

Real rate of interest
The actual rate of interest after taking into account the rate of inflation. To arrive at the real rate of interest, you deduct the rate of inflation from the nominal rate of interest.

Redemption fee
Fee charged to unit owners for redeeming – selling – units in an investment fund. The redemption fee is calculated as a percentage of the redeemed amount.

Relative volatility
Relative volatility is an expression for how the return of an investment fund has correlated with or deviated from the return of the fund’s benchmark during a period. High relative volatility means that the return of the fund only to a small extent may be “explained” by the performance of the benchmark. It means that the management company has chosen a significantly different composition of the fund’s portfolio than the benchmark. Low relative volatility means that the composition of the portfolios of the investment fund and the benchmark have been comparatively similar, which results in a strong correlation between the return of the fund and the return of the benchmark. In pure mathematical terms, the relative volatility of investment funds is defined as the annualised standard deviation of the monthly differences in return between the fund and the benchmark. See also Volatility.

Retail Price Index
Shows the changes in the general price level for selected groups of consumer staples and services. The index is based on the average household consumption with greatest emphasis on the goods that weigh most heavily in the household budget. It is therefore often referred to as ‘headline inflation’ as a measure of inflation for people in general. In Norway, it is Statistics Norway that collects the necessary data, assigns weights to the different product categories and prepares index figures each month.

Return on investment
The return indicates how the net asset value has performed during a period. The return is generated through dividends, changes in share prices and possibly changes in currency exchange rates (for investment funds investing in foreign securities) associated with the securities the fund has invested in. All return figures for investment funds are net figures, i.e. after deduction of all costs charged to the fund. You will find return figures for all investment funds registered in Norway in the price performance statistics.

Risk
There are a number of types of risk. In general, risk refers to what the chances are of loosing money or to miss out on profits. Generally speaking, a fund with a limited mandate, such as a national fund or an industry fund (narrow fund), will carry a higher risk than a fund with a broad mandate and a big spread between regions and industries (broad funds).

RISK adjustment
RISK is a Norwegian acronym meaning adjustment of a share’s entry value with the change in a company’s taxable capital. It is a system for avoiding double taxation, i.e. to avoid shareholders being taxed on capital that has already been taxed in a limited company. Practically speaking, this entails that shareholders, including unit owners in equity and balanced funds, will have the cost price of their shares (entry value) adjusted by a RISK amount. The RISK adjustment is made annually, but will only have consequences for unit owners in the year the units are redeemed.

Risk adjusted return
The measure of a fund’s return to its unit holders for the risk assumed. There are different ways of measuring this risk, including Information Ratio and Sharpe Index.

Risk diversification
Se Diversification.

Risk premium
The payment necessary to get someone to assume a risk.

Risk profile
The relationship between the expected return and the risk of an investment. It may be conservative or aggressive.

Security
A generic term for everything that is traded on a stock exchange. Among other things, securities comprise shares, bonds, notes and bills.

Serial loan
A loan whose principal is repaid in equal, regular instalments. As the principal of the loan is reduced by each instalment, the amount of interest paid also goes down. The monthly instalment amount (principal plus interest) will therefore be gradually reduced throughout the whole repayment period. Such a loan becomes increasingly less expensive, simply because it is being repaid quicker and the total monthly instalments are getting smaller and smaller. In aggregate you will therefore pay less interest on a serial loan than on an annuity loan with the same rate of interest and term.

Share
A share is an equity interest in a company and forms part of the company’s equity capital. For shareholders, the return on a share is either in the form of dividends from the company or increased market value of the share.

Share capital
The capital that has to be made available before a limited company may be incorporated. The total par value of all shares in a newly founded company.

Share classes
Usually all shares in a company have the same rights, but some companies choose to issue several classes or groups of shares, for example A-shares and B-shares or reference shares.

Share dividend
The part of the company’s annual profit that is distributed to the shareholders (owners) of the company. The return received by the shareholders on their shares. Dividend is paid by the company if the profits are good and all other provisions have been made, and will therefore vary from year to year according to the surplus generated by the company. Dividend is paid once a year. SKAGEN Fondene reinvests dividends in the funds.

Share portfolio
A person’s or company’s holdings of different shares.

Share price
The market value of a share. Usually applies to shares listed on a stock exchange. The share price, or the market value, varies with supply and demand.

Shareholder
Someone who owns one or several shares in a limited company. Among other things, the shareholder is entitled to receive regular information about the company, participate at general meetings and speak and vote on issues concerning the company.  A shareholder owns a percentage of the company proportionate to the number of shares he/she owns in the company. A shareholder has right of pre-emption with respect to subscription of shares in the raising of additional capital for the company. Shareholders may also receive dividends from the company.

Sharpe Ratio
Compares a fund’s return and standard deviation with the risk free return and provides a value for the fund’s risk adjusted return. A high number entails that the fund has a high risk adjusted return.  The fund with the highest Sharpe Ratio provides you with the best return relative to the risk you are assuming. This measure does not take any benchmark into account. The advantage is that you may compare funds with different investment mandates.

SICAV (umbrella funds)
SICAV is an acronym for ”Société d'Investissement à Capital Variable”. It means an investment company with variable share capital, and may in legal terms be considered as something in between an investment company and an investment fund. In practice, the share capital of a SICAV is equivalent to the net asset value of several different investment funds. In Norway the term umbrella fund is often used about a SICAV, because a SICAV usually consists of several different funds, where the investors may freely chose which of the funds they may invest their assets.  A number of Luxembourg registered UCITS funds marketed in Norway are organised as a SICAV.

Standard deviation
A measurement of uncertainty, e.g. with respect to an expected return.  The term standard deviation (or volatility) is important with respect to measuring risk. The standard deviation of a fund measures the historical fluctuation of the price of a fund. The lower the standard deviation, the lesser the probability of losing money – in other words, the risk becomes lower, according to this definition.

Stock Exchange
A stock exchange is an authorised marked that organises or runs a market for financial instruments that facilitates trading through regular or public price quotations.  A stock exchange must have a concession from public authorities in order to conduct business. Exchange activities related to securities are what most people associate with the word exchange (e.g. the Oslo Stock Exchange), but there are also other exchanges, such as commodities exchanges and exchanges that trade in electric power.

Subscription fee
A fee for subscribing to – buying – units in an investment fund. The fee is calculated as a percentage of the invested amount.

UCITS Directive
UCITS is an acronym for "Undertakings for Collective Investments In Transferable Securities" and is a term used for investment funds regulated by the EU Directive of the same name (Council Directive 85/611/EEC 20 December 1985). The UCITS Directive has been, due to the EEA agreement, implemented in Norway through the Norwegian Securities Funds Act. It follows from this directive that UCITS funds approved in one EEA country may be marketed in the other EEA countries.

Unit owner in an investment fund
By putting money in an investment fund, you are issued units in the investment fund and become a unit owner (or unit holder). As a unit owner you have no financial obligations with respect to the investment fund beyond the assets you have committed to the fund. There is no limitation in the number of unit owners in a fund.

V

Volatility
Volatility is an expression of to what extent the monthly returns have fluctuated around their own average during a certain measurement period, e.g. the past three or five years. High volatility indicates that there have been great fluctuations in the monthly returns. In pure mathematical terms, a fund’s volatility is defined as the annualised standard deviation of the fund’s monthly return. See also Relative volatility.

VPS (The Norwegian Central Securities Depository)
VPS is a rights registry, which, among other things, registers owners and changes in ownership for Norwegian securities. The institution provides transactional and other services to issuers of and investors in securities, and their intermediaries. VPS also acts as registrar and maintains the unit owner registry on behalf of several Norwegian fund management companies.