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– The DNB Navigator fund was established in 1997 and is now liquidated after 23 years. This is due to declining interest among our clients, especially over the past year, writes communications consultant Cecilie Skjennald at DNB in an email.
But it is not just interest in the fund that has fallen.
For several months, the arrows point down to the DNB Navigator fund, which invests primarily in oil services and shipping companies on the Oslo Stock Exchange.
The fund has had a negative return of 41 percent so far this year.
Thus, DNB Navigator has been one of the worst performing Norwegian managed funds during the period, according to the fund summary from the Oslo Stock Exchange. By comparison, the main index on the Oslo Stock Exchange has fallen eight percent so far this year.
In the last five years, the fund has had a negative return of more than 10 percent.
At the time of liquidation, the fund’s total assets are approximately NOK 180 million and it has just over 4,000 clients.
– In recent months, only around 5 million crowns have been invested, with a large proportion being savings deals in progress, writes Skjennald.
– Switch to “green” backgrounds
Historically low oil prices and the corona crisis have affected the entire oil industry, but especially service companies.
DNB Navigator had the majority of its investments in Frontline and BW Offshore, companies that cannot claim a good year on the stock market.
Frontline’s stake has fallen 29 percent year-to-date, while BW Offshore’s stake has dropped as much as 50 percent in the same period.
– We see a clear shift towards “green” funds and, as a commercial player, it is natural that we listen to the wishes of clients and rather broaden the range of funds with particularly high requirements for ESG. In recent years, we have seen the volumes of our green funds increase, writes Skjennald.
ESG stands for environmental, social and corporate governance, and it means that the environment, social responsibility and corporate governance are taken into account.
Continue with oil service
Until now, DNB Navigator has been managed by Rune Kaland and Dag Hammer. The former would not be interviewed by DN and referred to the bank’s communications department.
However, he was interviewed by Finansavisen in July. The reason was the fund’s poor performance.
At the time, Kaland believed that what was needed to make the fund work better was the price of oil.
“What is needed for the oil service to recover is that the price of oil must rise to a level where it is profitable for producers to invest,” he told the newspaper.
On Thursday afternoon, a barrel of North Sea oil is trading at $ 40, a 38 percent decline so far this year.
Kaland told Finansavisen that the fund had overperformed, compared to its benchmark, not the leading index.
A summary by DNB shows that the fund has had a relative excess return of 4.09% so far this year. Relative performance is measured against total performance in a specific market. In this case, it is the fund’s exposure within the oil service and shipment.
– Oil service and shipping will continue to be a part of several of our funds in the future, but as we see less demand from customers, it is natural to phase out the most sophisticated product in the industry, Skjennald writes to DN.
Climate fund discontinued
DNB Navigator is not the first fund DNB will close this year. In April, DN referred to the Eco Absolute Return retail A climate fund, which has long been DNB’s “worst fund.”
In two years, the fund had fallen nearly 40 percent. By comparison, the main index on the Oslo Stock Exchange had fallen roughly 15.5 percent in the same period.
However, DNB told DN that lack of fund size was the main reason for the liquidation. DNB declined to disclose the number of clients, but said the fund had total assets of NOK 86 million. By then, total assets had been reduced by NOK 50 million in one year. (Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We would like you to share our cases via a link, which leads directly to our pages. Copying or other use of all or part of the content may only be done with written permission or as permitted by law. For more terms, see here.
