SKAGEN Global A

SKAGEN Global gained 5.5% in the first quarter, in line with the MSCI All Country World Index.

All performance figures as at 31 March 2017 in EUR, net of fees and annualised for periods greater than one year * Inception for SKAGEN Global 07/08/1997 ** Before 01/01/2010 benchmark was MSCI World Index

• Unilever was the top quarterly performer following an aborted approach by US rival Kraft-Heinz in February. G4S was the next largest contributor with the UK security company delivering solid FY16 results with improving operational performance and reduced leverage.
• Teva was the weakest quarterly performer as the Israeli pharma company lowered 2017 guidance and saw its CEO depart. General Electric was the second largest detractor as the US conglomerate reported sluggish revenues.
• Three new companies entered the fund. Hyundai Motor rejoined the portfolio after 18 months as we see the Korean auto manufacturer as undervalued and expect medium-term improvements in corporate governance. We bought Red Electrica as the Spanish utility company has high earnings visibility but has unduly suffered in the recent reflation trade. Finally, we bought a small position in Golar LNG, a global provider of liquefied natural gas (LNG) transportation services, as we think the market undervalues the company's new projects and pipeline.
• No companies exited the fund but we trimmed several holdings including Unilever, Comcast and G4S following strong share price performance.
• The same companies represent the fund's top ten holdings, albeit with different weightings since year-end (e.g. CK Hutchison and Roche have replaced AIG and Unilever as the top two holdings); the aggregate weighting for the top ten is 43.9%, down from 45.2% at year-end.
• The Global fund remains attractively valued, both on an absolute and relative basis:

Status Reports: Read the SKAGEN Global Status Report for March here

SKAGEN Kon-Tiki A

SKAGEN Kon-Tiki climbed 11.6% during the first quarter, 1.5% ahead of the MSCI Emerging Markets Index which rose 10.1%.

All performance figures as at 31 March 2017 in EUR, net of fees and annualised for periods greater than one year * Inception for SKAGEN Kon-Tiki A 05/04/2002

• Samsung Electronics was the top quarterly performer following strong results and a new share buy-back programme from the Korean giant. Banrisul was the next best contributor with the Brazilian bank buoyed by a strong domestic market and bid speculation.
• Tullow Oil was the largest quarterly detractor with the UK-based exploration company requiring a huge rights issue, followed by the Johannesburg Stock Exchange which was hurt by political turmoil in South Africa and weak results.
• We continued to consolidate the portfolio during the quarter, selling our holdings in China Shipping Development, Euronav and Frontline given the challenging tanker market outlook. We also sold our position in Swedish-Swiss industrial company ABB following strong share price performance and switched our holding from Thai bank Kiatnakin into Bangkok Bank which we see as more attractively valued.
• Banrisul replaced ABB in the fund's top twelve holdings during the first quarter with their aggregate weighting falling from 51.4% to 49.3% over the period.
• The Kon-Tiki portfolio is attractively valued, both in absolute and relative terms:

Status Reports: Read the SKAGEN Kon-Tiki Status Report for March here

SKAGEN Focus A

SKAGEN Focus increased by 3.5% in the first quarter, underperforming the MSCI All Country World Index which returned 5.5%.

All performance figures as at 31 March 2017 in EUR, net of fees and annualised for periods greater than one year * Inception for SKAGEN Focus 26/05/2015

• Korean retailer e-mart was the largest contributor following strong quarterly results with its hyper-market turnaround seemingly on track and growth in on-line sales. Compatriot Samsung SDI was the next best performer with the battery manufacturer growing again following the Galaxy Note 7 recall and other issues.
• Aryzta was the biggest quarterly detractor following the Swiss bakery's latest profit warning with a new management team now exploring ways to de-lever its balance sheet. Whiting Petroleum was the next worst performer as the Denver-based oil and gas company delivered a net loss in line with expectations and guidance for increased 2017 production.
• Three new companies entered the fund. We bought Gold Fields as we believe the South Africa-based exploration company is incorrectly valued in line with its domestic peers despite its attractive overseas asset base. We re-invested in Hyundai Motor where we see a possible restructuring, improved governance and better capital allocation as potential catalysts to boost an attractive valuation. We also initiated a position in Italian bank Unicredit which we expect to benefit from balance sheet de-risking, simplification of its corporate structure and cost-cutting.
• We sold out of Jenoptik as the optical technology group's shares reached our target price following strong operational performance.
•  Philips Lighting replaced Whiting Petroleum in the fund's top ten holdings during the first quarter with their aggregate weighting falling from 44.6% to 42.3% over the period.
•  The Focus portfolio is attractively valued, both on an absolute and relative basis:

Status Reports: Read the SKAGEN Focus Status Report for March here

SKAGEN Tellus A

SKAGEN Tellus climbed 0.6% over the first quarter, outperforming the JPM Broad GBI Unhedged index which rose 0.3%.

All performance figures as at 31 March 2017 in EUR, net of fees and annualised for periods greater than one year * Inception for SKAGEN Tellus 29/09/2006 *** Before 01/01/2013 benchmark was Barclay's Capital Global Treasury Index 3-5 years

• Mexico was the largest quarterly contributor with the Mexican peso appreciating as the market doubted President Trump's ability to implement protectionist policies, followed by Peru where our bonds experienced price gains.
• Greece and Norway were the fund's largest quarterly detractors, with the latter due to currency depreciation.
• The fund's duration is currently 3.1 years, substantially below the index's 7.7 years, and we have very low duration on our investments in the US, UK, Canada, Mexico and Norway where we expect currency appreciation.
• We have longer duration in countries where we expect the credit premium to fall (e.g. Portugal and Croatia) or where there are high interest rates (e.g. Peru and Chile).
• The global economy has begun the year on a strong footing with better than expected economic data, supporting our view of stable or higher long-term interest rates in the US and central Europe.

Status Reports: Read the SKAGEN Tellus Status Report for March here

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Important information

Except otherwise stated, the source of all information is SKAGEN AS as at the date of the publication of the investment report. Historical returns are no guarantee for future returns. Future returns will depend, inter alia, on market developments, the fund manager's skills, the fund's risk profile and subscription and management fees. The return may become negative as a result of negative price developments. Statements reflect the portfolio managers' viewpoint at a given time, and this viewpoint may be changed without notice. This report should not be perceived as an offer or recommendation to buy or sell financial instruments. SKAGEN AS does not assume responsibility for direct or indirect loss or expenses incurred through use or understanding of the report. Employees of SKAGEN AS may be owners of securities issued by companies that are either referred to in this report or are part of the fund's portfolio. SKAGEN AS does not give advice to Dutch retail investors. We always recommend that you speak to your financial adviser before making any investment decisions. They can take into account your personal circumstances when discussing financial objectives and how best to achieve them. Before you invest, you should consider and understand the risks of investing in the funds. Further information on the funds and the risks associated with investing can be found in the Full Prospectus or the Key Investor Information Document(s). These documents are available in English and you can request copies by contacting our offices.