DNB Scandinavia outlook ‘neutral’ through March

A mix of risk versus growth factors led DNB Asset Management managers Karl Høgtun and Kjell Hjørnevik to take a ‘neutral’ view in their approach for the DNB Scandinavia fund through March.

In their analysis, they have had to balance sectors with above trend growth, such as Commodities, against assets that are growing more slowly such as Utilities.


    Below Trend  Above Trend

Early slowdown

Sectors: Broad defensive

– Utilities, Telecom, (Financial)

Best asset: Bonds (cash)

Earnings risk: high

Late upswing

Sectors: Broad cyclical

– Materials, Energy, (Industrials)

Best asset: Commodities

Earnings risk: Moderate


 Late slowdown

Sectors: Defensive growth

-Healthcare, Consumer Staples, Financials

Best asset: Stocks (cash)

Earnings risk: Moderate

 Early upswing

Sectors: Cyclical growth

– Tech, Consumer Durables, Industrials

Best asset: Stocks

Earnings risk: Low



The managers added that they had no strong convictions, and therefore took a blend of long and short positions, including:

   – Long Health Care/Short CS

   – Long Tech/Short Industrials

   – Long CD

   – Short Financials (Neutral Banks)

The chief geopolitical risk remains Iran and the impact this may have on oil supply.

However, there are other ongoing risks the managers said, including deleverating of European banks, sovereign budget deficits and high debt levels, credit spreads on banks, and the position of the raw materials cycle.


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