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SKAGEN Vekst: A Nordic and Global Equity Fund
SKAGEN Vekst is an actively managed portfolio which combines undervalued Nordic and global companies. The fund is managed by Søren Milo Christensen and Sondre Solvoll Bakketun.
Investment Strategy
Nordic countries contain some of the world’s best-managed companies. Corporate governance and business practices are often market-leading while levels of protection for minority shareholders and transparency are generally very high. However, the Nordic investment universe is relatively small and the fund's broad mandate allows up to half of its assets to be invested in companies listed outside of the region. This global flexibility also helps to diversify portfolio risk away from the Nordic region.
The fund is actively managed, consistent with SKAGEN's investment philosophy. The portfolio managers are benchmark agnostic and their value-based strategy is to find attractively priced companies with clearly identifiable catalysts for a revaluation. These businesses may be out of favour (often due to short-term market noise) but where changes, either internally or in the operating environment, will improve their fundamental outlook.
The portfolio managers target companies with a margin of safety and possessing clear, coherent and realistic triggers to drive a share price re-rating. This approach creates a portfolio tilted towards classic value stocks with a focus on capital return. Holdings must have both downside protection and upside potential based on their core earnings, cash flow growth and / or cost restructuring.
Portfolio Characteristics
The concentrated portfolio typically contains 40-60 holdings with the top 35 positions representing 70-90 percent of assets. The fund has a bias towards mid / large cap companies with select high-conviction small cap ideas. The portfolio's geographic exposure is typically balanced 50:50 between Nordic stocks and those listed outside the region.
The fund managers also target diversification across different sectors in order to manage portfolio risk. The investment horizon is typically a minimum of 3-5 years but can be significantly longer as the portfolio managers attach greater value to fundamentals than short-term trends.