Arctic Funds Plc
Interim Report and Unaudited Financial Statements For the six months period ended 30 June 2014
Contents
Page
Directors and Other Information 2
Investment Manager's Reports 3
Portfolio of Investments 5
Balance Sheet 22
Profit and Loss Account 26
Statement of Changes in Net Assets attributable to Redeemable Participating Shareholders 29
Notes to the Financial Statements 31
For the six months period ended 30 June 2014
Directors and Other Information
Registered Office2nd Floor
Beaux Lane House Mercer Street Lower Dublin 2 Directors John Fitzpatrick* Tom Murray* Simen Hofset+ * Independent Director
All Directors are Non Executive Investment Manager and Distributor Arctic Fund Management AS
Haakon VIIs gate 5 7th Floor, NO-0161 Oslo
Norway Custodian
BNY Mellon Trust Company (Ireland) Limited Guild House Guild Street IFSC Dublin 1 Ireland Administrator
BNY Mellon Investment Servicing (International) Limited Riverside Two
Sir John Rogerson’s Quay Grand Canal Dock Dublin 2
Ireland
Independent Auditor
Deloitte & Touche
Chartered Accountants and Statutory Audit Firm Deloitte & Touche House
Earlsfort Terrace Dublin 2
Ireland
Swedish Paying Agent
Skandinaviska Enskilda Banken AB Sergels Torg 2
SE-106 40 Stockholm Sweden
Irish Legal Advisers Maples and Calder 75 St Stephen's Green Dublin 2
Ireland
Norwegian Legal Advisers
Bugge, Arentz-Hansen and Rasmussen Stranden 1 P.O. Box 1524 Vika, N-0117 Oslo Norway Secretary MFD Secretaries Limited Beaux Lane House Mercer Street Lower Dublin 2
Ireland Promoter
Arctic Securities ASA P.O. Box 1833 Vika N-0123 Oslo Norway Distributor
Arctic Fund Management AS Haakon VIIs gate 5
7th Floor, NO-0161 Oslo Norway Sub-Distributor Nordnet Bank AB Gustavslundsvägen 141 SE-167 14 Bromma Sweden UBS AG Aeschenvorstadt 1 CH-4002 Basel Switzerland UBS AG Bahnhofstrasse 45 CH-8098 Zurich Switzerland
MFEX Mutual Funds Exchange AB Linnégatan 9-11
SE-114 47 Stockholm Sweden
+Effective 23 July 2014, Simen Hofset resigned as a Director and Bengt Arve Rem was appointed as a Director.
Investment Manager’s Reports
Arctic CoveredThe Fund returned 0.23 % in June and 1.61% year-to-date. The 3-month government certificate index (ST1X) gave a return of 0.13 % in June, and has returned 0.69% YTD. The three-month government yield fell 17 basis points (bp) to 1.23% this month, in comparison 3-month NIBOR only fell 9 bp. The Norwegian Central Bank took the market by surprise at their meeting on June 19th by lowering their interest rate path by as much as 28 bp in 2015 and 45 bp in 2016. Moreover they signaled a 30% probability of further rate cuts. The Norwegian krone depreciated immediately from 8.17 to 8.30 and NIBOR dropped some points but the reaction was not nearly as strong. NIBOR continued to fall throughout the month and ended at 1.75%.
In June credit spreads remained unchanged for covered bonds with and without an official rating. The same was true for the short senior bank bonds. Issue activity for senior bank and covered bonds have been low during the month, and the two largest issuance has been Danske Bank and Sparebanken Sør who both brought in 1.5 billion NOK in a respectively 5 and 6 years covered bond at level equal to NIBOR + 30 bp.
3 month Last 6 month YTD Last 12 month Last 36 month Last 60 month Inception
Arctic Global Equities
The Fund returned 4.03% in June and 8.09% YTD. The reference index MSCI All Country World, returned 4.47% in June and 7.41% YTD. International stock markets advanced roughly 1.5% in June, with Europe underperforming and the strongest performances coming from India and Brazil. As the Norwegian Kroner depreciated meaningfully in the period the returns in NOK terms were quite favorable. Among the biggest gainers was also Japan, where stock markets rallied amid Prime Minister Abe announcing a package of reforms as part of the much anticipated third arrow of “Abenomics”. June was a month marked by yet another dramatic geopolitical development with the consequences of the ongoing civil war in Syria once again coming in the focal point of global attention as the terror organization ISIS occupation of most parts of western Iraq. This resulted most notably in an increase of Brent Crude from around USD 109/barrel to about USD 113/barrel. Among other commodities, precious metals have performed strongly while soft commodities declined the second month in a row. With regards to sectors, Energy was dominant in June, with Utilities – still the strongest sector year to date – coming in second place after yet another strong month. Telecoms were the weakest performers and the only negative sector besides Consumer Staples. 2 years ago, in June 2012, the global markets bottomed out after a 12% correction over a 2 months period. We haven’t seen another drop over 10% in the global index ever since. While historical evidence suggests that a market correction is overdue, short term triggers remain out of sight.
Arctic High Return
The Fund yielded 0.87% in the month of June. The return is 4.61% YTD. The 3-month government certificate index (ST1X) has returned 0.13 and 0.69% respectively for the periods. European HY credit spreads fell in the month of June. The European high yield index iTraxx Crossover narrowed by 14 basis points, from 256bp to 242bp. European and American HY indices, for the month of June and year-to-date, returned 0.6% (5.3%) and 0.9% (5.3%) respectively.
New issuance of corporate bonds in the Norwegian market reached NOK 67.7 billion in the first six months, of which 70% was in the high yield segment. The default rate for the last twelve months remains unchanged from May at 1.3% p.a. The running yield in Arctic High Returns is 6.5% and the credit market fundamentals continue to be strong.
Arctic Investment Grade
The Fund returned 0.51% in June and 2.43% year-to-date. The 3-month government certificate index (ST1X) gave a return of 0.13% in June, and has returned 0.69 % YTD. In June 3 year government bond yield rose by 21 basis points (bsp) to 1.56%. Hence the three year government bond index (ST4X) gave a return of 0.76% and 2.19% year to date.
The European Central Bank (ECB) cut interest rates as expected at its meeting in June and they have now for the first time ever negative deposit rates. Furthermore, they introduced a 4 year loan program to banks if they lend out to small and medium sized enterprises. The European market reacted positively to the initiative and credit spreads for senior bank bonds fell and is now roughly equal to Investment Grade industry. At home markets did not react as much and for the month as a whole, Norwegian investment grade (IG) corporate spreads remained relatively unchanged.
This is also the case for the utility bonds and long-term senior bank bonds. Issue activity for IG bonds in both the Norwegian and the Swedish market has been low this month. New names in the portfolio this month is BWG Homes that during June has been taken over by OBOS.
For the six months period ended 30 June 2014
Investment Manager’s Reports (Continued)
Arctic Norwegian EquitiesThe Fund once again outperformed the global index and were up about 2.2% in June. It was a strong month for the salmon sector with Marine Harvest being the top performer within the OSEFX, and both Salmar and Lerøy Seafood finishing top five. Salmon stocks moved up amid higher Salmon forward prices, lower smolt release in Chile and the introduction of stricter sea lice limits by the Norwegian Ministry of Fisheries that effectively limit supply growth. Also among the top ten performers was surprisingly DNO whose share price plummeted initially after the terror organization ISIS occupation of Iraq’s second biggest city Mosul. The stock recovered sharply at the end of the month as pushes from the Kurdish local government for a more decentralized distribution of political power in Iraq became more and more likely to be heard in Bagdad. Yara continued its rally of recent months. Lower gas prices in Europe and higher nitrate- premiums contributed to the strong performance. The worst performer in the OSEFX in June was Norwegian Air Shuttle. Continuous margin pressure, negative media coverage throughout the last months concerning regulatory difficulties with Norwegians transatlantic flights as well as strike-threats from on-board crew unions are likely to have affected investor confidence.
Arctic Fund Management AS July 2014
Portfolio of Investments as at 30 June 2014
Arctic Covered
The accompanying notes are an integral part of the Financial Statements.
Coupon
Rate % Maturity Date Quantity
Fair Value NOK
% of Net Asset Value FINANCIAL ASSETS AT FAIR VALUE
Corporate Bonds - 99.35%
Financial - 99.35%
Denmark
Danske Bank A/S 2.12% 1/7/2019 10,000,000 10,000,000 1.50 Netherlands LeasePlan Corp. NV 3.69% 7/9/2015 10,000,000 10,178,000 1.53 Norway Askim Sparebank 2.52% 29/3/2016 5,000,000 5,032,000 0.76 Bustadkreditt Sogn og Fjordane A/S 2.25% 18/4/2018 20,000,000 20,230,000 3.05 DNB Boligkreditt A/S 2.19% 22/11/2019 40,000,000 40,588,000 6.11 Eiendomskreditt 2.31% 15/9/2017 10,000,000 10,087,000 1.52 Eika Boligkreditt A/S 2.20% 8/6/2018 10,000,000 10,126,000 1.52 Eika Boligkreditt AS 2.36% 16/12/2020 15,000,000 15,214,500 2.29 Fana Sparebank Boligkreditt AS 2.24% 15/5/2018 15,000,000 15,105,000 2.27 Fana Sparebank Boligkreditt AS 2.20% 11/2/2020 15,000,000 15,066,000 2.27 Flekkefjord Sparebank 2.88% 21/3/2016 5,000,000 5,067,000 0.76 Flekkefjord Sparebank 2.39% 30/3/2017 10,000,000 10,048,000 1.51 Gjensidige Bank Boligkreditt A/S 2.31% 21/9/2018 25,000,000 25,415,000 3.83 Haugesund Sparebank A/S 3.46% 11/6/2016 10,000,000 10,276,000 1.55 Helgeland Boligkreditt A/S 2.30% 17/6/2015 7,000,000 7,041,300 1.06 Helgeland Boligkreditt A/S 2.39% 4/3/2019 10,000,000 10,102,000 1.52 Helgeland Boligkreditt AS 2.23% 16/6/2020 20,000,000 20,072,000 3.02 Jernbanepersonalets Sparebank 2.41% 10/10/2016 10,000,000 10,063,000 1.51 KLP Banken AS 2.24% 10/3/2017 5,000,000 5,000,000 0.75 Landkreditt Boligkreditt A/S 2.34% 18/4/2016 5,000,000 5,036,000 0.76 Landkreditt Boligkreditt A/S 2.33% 5/9/2016 7,000,000 7,056,000 1.06 Lillesands Sparebank 2.70% 8/6/2015 10,000,000 10,071,000 1.52 Marker Sparebank 2.40% 27/2/2017 11,000,000 11,014,300 1.66 More Boligkreditt A/S 2.32% 6/9/2018 10,000,000 10,169,000 1.53 More Boligkreditt A/S 2.14% 10/5/2019 10,000,000 10,095,000 1.52 Nordea Eiendomskreditt A/S 2.33% 19/6/2019 20,000,000 20,434,000 3.08 Nordea Eiendomskreditt AS 2.21% 17/6/2020 20,000,000 20,136,000 3.03 Pluss Boligkreditt A/S 2.11% 14/9/2018 10,000,000 10,094,000 1.52 RorosBanken 2.88% 5/2/2016 15,000,000 15,183,000 2.28 Sor Boligkreditt A/S 2.37% 20/6/2018 10,000,000 10,189,000 1.53 Sparebank 1 Boligkreditt A/S 2.21% 16/8/2018 10,000,000 10,126,000 1.52 Sparebank 1 Boligkreditt A/S 2.28% 10/9/2019 17,000,000 17,326,400 2.61 Sparebank 1 Boligkreditt AS 2.37% 17/6/2020 20,000,000 20,310,000 3.06 Sparebank 1 Hallingdal 2.88% 26/10/2016 10,000,000 10,181,000 1.53 Sparebank 1 Ringerike Hadeland 2.86% 4/12/2017 10,000,000 10,260,000 1.54 Sparebank 1 SMN 2.68% 16/3/2016 20,000,000 20,274,000 3.05 Sparebank 1 Telemark 3.10% 9/9/2016 15,000,000 15,367,500 2.31 Sparebanken More 2.78% 5/12/2016 15,000,000 15,283,500 2.30 Sparebanken More 2.24% 5/9/2017 10,000,000 10,003,000 1.51 Sparebanken Ost Boligkreditt A/S 2.27% 18/10/2016 15,000,000 15,144,000 2.28 Sparebanken Pluss 2.70% 9/5/2016 20,000,000 20,286,000 3.05 Sparebanken Sor 2.65% 16/9/2015 5,000,000 5,051,000 0.76 Sparebanken Vest Boligkreditt A/S 2.17% 8/4/2016 5,000,000 5,032,500 0.76 Sparebanken Vest Boligkreditt A/S 2.92% 13/11/2017 10,000,000 10,287,000 1.55 SSB Boligkreditt A/S 2.15% 20/9/2018 15,000,000 15,144,000 2.28 Terra Boligkreditt A/S 2.28% 3/12/2019 10,000,000 10,174,000 1.53 Totens Sparebank Boligkreditt A/S 1.94% 2/12/2015 5,000,000 5,000,500 0.75 Totens Sparebank Boligkreditt A/S 2.27% 25/8/2016 5,000,000 5,037,500 0.76
For the six months period ended 30 June 2014
Portfolio of Investments as at 30 June 2014 (Continued)
Arctic Covered (Continued)
Coupon
Rate % Maturity Date Quantity
Fair Value NOK
% of Net Asset Value FINANCIAL ASSETS AT FAIR VALUE (continued)
Corporate Bonds - 99.35% (continued) Financial - 99.35% (continued) 584,298,000 87.94 Sweden Skandiabanken AB 2.14% 4/10/2018 20,000,000 20,182,000 3.03 Stadshypotek AB 2.40% 16/5/2019 20,000,000 20,466,000 3.08 Swedbank Hypotek AB 2.23% 19/3/2021 15,000,000 15,051,000 2.27 55,699,000 8.38
Total Corporate Bonds 660,175,000 99.35
Total Financial Assets at Fair Value 660,175,000 99.35
Net Investments at Fair Value 660,175,000 99.35
Cash at bank 13,035,410 1.96
Other assets in excess of liabilities (8,702,064) (1.31)
Total Net Assets 664,508,346 100.00
Analysis of Total Assets
% of Total Assets
Transferable securities admitted to an official exchange
listing or traded on a regulated market 97.84%
Other assets 2.16%
Total Assets 100.00%
Portfolio of Investments as at 30 June 2014 (Continued)
Arctic Global Equities
The accompanying notes are an integral part of the Financial Statements.
Shares
Fair Value NOK
% of Net Asset Value FINANCIAL ASSETS AT FAIR VALUE
Common Stock - 98.95% Basic Materials - 9.30%
Japan
Nippon Steel Corp. 502,000 9,848,067 1.79
Netherlands
LyondellBasell Industries NV 15,000 8,984,557 1.64
Portugal
Portucel Empresa Produtora de Pasta e
Papel S.A. 325,000 9,338,308 1.70
United Kingdom
BHP Billiton Ltd. 65,000 13,496,763 2.45
United States
The Dow Chemical Co. 30,000 9,469,437 1.72
Communications - 6.29% China China Mobile Ltd. 120,000 7,141,807 1.30 United States Google, Inc. 2,400 8,607,067 1.57 Qualcomm, Inc. 20,000 9,716,019 1.76
Verizon Communications, Inc. 30,400 9,123,930 1.66
27,447,016 4.99 Consumer, Cyclical - 12.61% France Renault S.A. 20,000 11,091,826 2.02 Germany Adidas AG 20,000 12,425,600 2.26 Japan Mitsubishi Corp. 43,100 5,498,498 1.00
Nissan Motor Co. Ltd. 81,000 4,713,144 0.86
10,211,642 1.86
Korea, Republic Of
Hyundai Motor Co. 3,800 5,286,945 0.96
Norway
Royal Caribbean Cruises Ltd. 18,000 6,138,757 1.12
Spain
Cie Automotive S.A. 48,821 4,305,541 0.78
NH Hoteles S.A. 250,000 9,081,506 1.65 13,387,047 2.43 United States L Brands, Inc. 30,000 10,794,349 1.96 Consumer, Non-cyclical - 17.57% France Sanofi-Aventis S.A. 11,200 7,297,928 1.33
For the six months period ended 30 June 2014
Portfolio of Investments as at 30 June 2014 (Continued)
Arctic Global Equities (Continued)
Shares
Fair Value NOK
% of Net Asset Value FINANCIAL ASSETS AT FAIR VALUE (continued)
Common Stock - 98.95% (continued)
Consumer, Non-cyclical - 17.57% (continued)
Germany
Henkel AG & Co. KGaA 12,000 8,509,613 1.55
Merck KGaA 20,000 10,648,355 1.93
19,157,968 3.48
Spain
Prosegur Cia de Seguridad S.A. 222,000 9,770,483 1.78
United Kingdom
Reckitt Benckiser Group PLC 24,100 12,902,441 2.34
United States
General Mills, Inc. 25,000 8,056,812 1.47
Johnson & Johnson 30,000 19,251,701 3.50
PepsiCo, Inc. 20,000 10,959,963 1.99 Pfizer, Inc. 50,700 9,230,070 1.68 47,498,546 8.64 Diversified - 4.34% Germany GEA Group AG 35,000 10,165,407 1.85 Hong Kong Hutchison Whampoa Ltd. 100,000 8,389,091 1.53 Singapore Keppel Corp. Ltd. 100,000 5,307,903 0.96 Energy - 8.54% Netherlands Schlumberger Ltd. 20,000 14,469,752 2.63 Sweden Lundin Petroleum AB 75,000 9,308,804 1.69 United Kingdom
Royal Dutch Shell PLC 50,525 12,832,754 2.33
United States
Cameron International Corp. 25,000 10,383,075 1.89
Financial - 17.07%
Germany
Muenchener Rueckversicherungs AG 4,000 5,439,245 0.99
Japan
The Bank of Yokohama Ltd. 219,000 7,730,631 1.41
Netherlands
ING Groep NV 100,000 8,617,457 1.57
Norway
DnB NOR ASA 100,000 11,220,000 2.04
Portugal
Banco BPI S.A. 300,000 3,852,658 0.70
Singapore
Arctic Global Equities (Continued)
The accompanying notes are an integral part of the Financial Statements.
Shares
Fair Value NOK
% of Net Asset Value FINANCIAL ASSETS AT FAIR VALUE (continued)
Common Stock - 98.95% (continued) Financial - 17.07% (continued)
Spain
Bolsas y Mercados Espanoles S.A. 25,000 7,322,949 1.33
United States
American Express Co. 24,200 14,082,424 2.56
Capital One Financial Corp. 25,300 12,818,397 2.33
Citigroup, Inc. 30,000 8,667,130 1.57
JPMorgan Chase & Co. 25,000 8,835,811 1.61
44,403,762 8.07
Industrial - 18.19%
Germany
Deutsche Post AG 33,000 7,320,051 1.33
Hong Kong
Orient Overseas International Ltd. 250,000 7,508,632 1.37 Japan
Hitachi Ltd. 202,000 9,075,228 1.65
Komatsu Ltd. 49,500 7,049,280 1.28
16,124,508 2.93
Netherlands
Koninklijke Boskalis Westminster NV 35,000 12,312,843 2.24 Spain
ACS Actividades Cons y Servicios S.A. 20,000 5,610,586 1.02 Construcciones y Auxiliar de Ferrocarriles
S.A. 1,000 2,933,799 0.53
Sacyr Vallehermoso S.A. 150,000 5,828,122 1.06
Tecnicas Reunidas S.A. 25,000 9,485,712 1.72
23,858,219 4.33
Sweden
SKF AB 60,000 9,391,426 1.71
United States
General Electric Co. 87,500 14,104,788 2.56
United Parcel Service, Inc. 15,000 9,445,516 1.72
23,550,304 4.28
Technology - 5.04%
Korea, Republic Of
Samsung Electronics Co. Ltd. 1,500 9,639,080 1.75
United States
Apple Computer, Inc. 14,000 7,980,262 1.45
Micron Technology, Inc. 50,000 10,105,518 1.84
18,085,780 3.29
Total Common Stock 544,197,286 98.95
Private Placements - 0.09% Energy - 0.09%
Norway
For the six months period ended 30 June 2014
Portfolio of Investments as at 30 June 2014 (Continued)
Arctic Global Equities (Continued)
Shares
Fair Value NOK
% of Net Asset Value FINANCIAL ASSETS AT FAIR VALUE (continued)
Private Placements - 0.09% (continued) Energy - 0.09% (continued)
Total Private Placements 495,000 0.09
Total Financial Assets at Fair Value 544,692,286 99.04
Net Investments at Fair Value 544,692,286 99.04
Cash at bank 5,425,441 0.99
Liabilities in excess of other assets (139,318) (0.03)
Total Net Assets 549,978,409 100.00
+ Private Placements are valued in good faith by the Investment Manager.
Analysis of Total Assets
% of Total Assets
Transferable securities admitted to an official exchange
listing or traded on a regulated market 98.75% Transferable securities other than those admitted to an
official exchange listing or traded on a regulated market 0.09%
Other assets 1.16%
Total Assets 100.00%
Portfolio of Investments as at 30 June 2014 (Continued)
Arctic High Return
The accompanying notes are an integral part of the Financial Statements.
Coupon
Rate % Maturity Date Quantity
Fair Value NOK
% of Net Asset Value FINANCIAL ASSETS AT FAIR VALUE
Corporate Bonds - 97.83% Basic Materials - 2.64% Norway Aker ASA 6.65% 7/09/2022 13,000,000 13,821,600 0.62 Sweden Dannemora Mineral AB 11.75% 22/03/2016 2,478,000 1,367,972 0.06 Northland Resources AB 15.00% 15/07/2019 3,294,875 10,307,237 0.47 WA Wallvision AB 9.00% 5/12/2017 10,000,000 9,650,310 0.44 21,325,519 0.97 United Kingdom TiZir Ltd. 9.00% 28/09/2017 3,700,000 23,330,712 1.05 Communications - 4.09% Luxembourg
European Directories BondCo SCA 7.30% 9/12/2018 3,200,000 26,842,119 1.21 Norway
The Northern Alliance 8.65% 20/12/2018 10,000,000 10,001,000 0.45 Sweden
AINMT Scandinavia Holdings AB 9.75% 19/03/2019 13,000,000 12,175,438 0.55 United States
Seadrill Ltd. 6.50% 5/10/2015 6,500,000 41,628,293 1.88
Consumer Cyclical - 0.96%
Denmark
Jacob Holm & Sonner Holding A/S 6.17% 4/03/2019 13,000,000 12,084,737 0.55 Sweden
Nordic Service Partners Holding AB 6.04% 27/06/2019 10,000,000 9,181,198 0.41
Consumer Non-cyclical - 2.91% Norway Curato Bidco AS 7.07% 22/11/2018 10,000,000 10,283,000 0.46 StormGeo Holding AS 7.51% 31/01/2017 5,000,000 5,108,500 0.23 15,391,500 0.69 Sweden Candyking Holding AB 5.90% 29/01/2018 15,000,000 13,997,632 0.63 Orexo AB 4.91% 9/05/2018 8,000,000 7,345,693 0.33 Troax Group AB 5.76% 12/06/2020 2,000,000 16,799,841 0.76 YA Holding AB 7.87% 18/06/2019 12,000,000 11,018,539 0.50 49,161,705 2.22 Consumer, Cyclical - 6.67% Norway BWG Homes ASA 5.45% 28/11/2018 13,000,000 14,185,600 0.64
Color Group A/S 6.15% 18/12/2017 20,000,000 20,372,000 0.92 Color Group ASA 6.89% 25/08/2016 25,500,000 61,311,350 2.77 Teodin Acquico A/S 7.70% 2/10/2017 6,000,000 6,233,400 0.28 102,102,350 4.61
For the six months period ended 30 June 2014
Portfolio of Investments as at 30 June 2014 (Continued)
Arctic High Return (Continued)
Coupon
Rate % Maturity Date Quantity
Fair Value NOK
% of Net Asset Value FINANCIAL ASSETS AT FAIR VALUE
Corporate Bonds - 97.83% Consumer, Cyclical - 6.67%
Sweden
Braathens Aviation AB 6.68% 20/03/2018 20,000,000 18,555,182 0.83
eTRAVELi AB 6.79% 27/09/2017 1,800,000 15,706,449 0.71
West Air Europe AB 8.00% 8/05/2018 12,000,000 11,475,717 0.52 45,737,348 2.06 Consumer, Non-Cyclical - 4.69%
Norway
Albain Bidco Norway A/S 6.67% 1/11/2020 30,000,000 30,111,000 1.36 Austevoll Seafood ASA 5.68% 7/02/2017 4,500,000 4,707,900 0.21
BWG Homes ASA 5.89% 12/12/2016 30,000,000 32,082,000 1.45
Marine Harvest ASA 5.14% 12/03/2018 21,000,000 21,655,200 0.98 Volstad Shipping A/S 7.68% 30/05/2018 15,000,000 15,363,000 0.69 103,919,100 4.69 Diversified - 2.19%
Norway
AGR Petroleum Services Holdings A/S 7.93% 5/02/2018 22,000,000 22,796,400 1.03 Island Offshore Shipholding LP 6.94% 5/04/2016 25,000,000 25,707,500 1.16 48,503,900 2.19 Energy - 21.33% Bermuda BassDrill Alpha Ltd. 7.50% 5/07/2018 1,649,999 10,080,366 0.46 BW Offshore Ltd. 5.81% 21/03/2018 15,000,000 15,480,000 0.70 Floatel International Ltd. 8.00% 11/10/2017 4,000,000 26,485,964 1.20 North Atlantic Drilling Ltd. 6.08% 30/10/2018 35,000,000 35,203,000 1.59 87,249,330 3.95
Cayman Islands
Polarcus Ltd. 8.00% 7/06/2018 2,200,000 23,301,499 1.05
Siem Offshore, Inc. 6.43% 30/01/2018 27,000,000 27,669,600 1.25 50,971,099 2.30
Luxembourg
Pacific Drilling S.A. 8.25% 23/02/2015 3,200,000 20,248,575 0.91 Marshall Islands
Harkand Finance, Inc. 7.50% 28/03/2019 1,700,000 10,453,614 0.47 Netherlands
Bluewater Holding BV 10.00% 10/12/2019 4,900,000 32,015,507 1.44 Norway
Beerenberg Holdco II AS 6.73% 27/06/2018 20,000,000 20,000,000 0.90 Det Norske Oljeselskap ASA 8.43% 28/01/2016 30,000,000 52,107,000 2.35
DOF Subsea ASA 7.17% 29/04/2016 17,500,000 73,795,050 3.33
Electromagnetic GeoServices A/S 7.65% 27/06/2016 16,000,000 16,256,000 0.74 Norwegian Energy Co. A/S 6.00% 9/12/2016 14,219,766 41,913,493 1.89 Norwegian Energy Co. ASA 4.00% 9/12/2018 11,382,180 7,000,041 0.32 Rem Offshore ASA 6.68% 27/01/2015 11,000,000 11,174,900 0.50 Solor Bioenergi Holding A/S 6.66% 2/11/2017 11,500,000 11,621,900 0.52 Veritas Petroleum Services BV 7.00% 1/04/2019 2,800,000 17,310,461 0.78 251,178,845 11.33
Arctic High Return (Continued)
The accompanying notes are an integral part of the Financial Statements.
Coupon
Rate % Maturity Date Quantity
Fair Value NOK
% of Net Asset Value FINANCIAL ASSETS AT FAIR VALUE
Corporate Bonds - 97.83% Energy - 21.33%
Singapore
Axis Offshore Pte Ltd. 7.48% 18/05/2018 1,800,000 11,227,522 0.51 Oro Negro Drilling Pte Ltd. 7.50% 24/01/2019 1,500,000 9,331,426 0.42 20,558,948 0.93 Financial - 9.73%
Denmark
Danske Bank A/S 4.27% 6/12/2023 35,000,000 36,260,000 1.63
Finland AC Alpha Oyj 4.72% 19/06/2019 2,000,000 16,836,797 0.76 Iceland Arion Banki HF 6.66% 4/03/2016 17,000,000 17,430,100 0.79 Norway Handelseiendom II A/S 4.70% 13/01/2015 4,000,000 3,300,000 0.15 Hjelmeland Sparebank 9.87% 14/08/2014 4,000,000 4,024,000 0.18 Hospitality Invest AS 7.80% 12/02/2019 15,000,000 15,001,500 0.68 Jernbanepersonalets Sparebank 5.75% 29/09/2049 5,000,000 5,030,500 0.23 Kistefos A/S 11.19% 3/07/2015 6,000,000 6,345,000 0.29 Kistefos AS 9.07% 16/12/2016 10,000,000 10,301,000 0.46
Pareto Bank ASA 7.66% 29/03/2049 10,000,000 10,450,000 0.47 Pioneer Public Properties II A/S 6.69% 5/04/2018 16,000,000 16,280,000 0.73 Pioneer Public Properties III AS 6.23% 27/06/2019 14,000,000 14,016,800 0.63 Protector Forsikring A/S 7.70% 19/04/2022 15,000,000 15,933,000 0.72 Sparebank 1 Nord Norge 6.39% 20/12/2049 2,000,000 2,092,600 0.09 Sparebank 1 SR Bank 5.18% 2/12/2021 5,000,000 5,249,500 0.24 Sparebanken More 6.43% 9/10/2017 8,000,000 8,374,400 0.38 Sparebanken Vest 5.17% 9/02/2022 5,000,000 5,260,500 0.24 Storebrand Livsforsikring 4.46% 31/03/2049 5,000,000 5,018,000 0.23 126,676,800 5.72 Sweden Hoist Kredit AB 4.54% 18/12/2016 20,000,000 18,415,642 0.83 Industrial - 39.83% Belgium
Exmar NV zero coupon 7/07/2017 20,000,000 20,000,000 0.90
Bermuda
GasLog Ltd. 7.15% 27/06/2018 17,000,000 17,914,600 0.81
Hoegh LNG Holdings Ltd. 7.69% 3/10/2017 41,000,000 43,332,900 1.96 Ship Finance International Ltd. 6.70% 19/10/2017 30,000,000 56,397,000 2.55 Stolt-Nielsen Ltd. 6.39% 19/03/2018 19,000,000 50,389,900 2.28 168,034,400 7.60 Cyprus Songa Offshore SE 9.46% 11/06/2015 4,500,000 17,315,750 0.78 17,315,750 0.78 Denmark J Lauritzen A/S 9.93% 24/10/2017 28,000,000 29,845,200 1.35 Estonia
For the six months period ended 30 June 2014
Portfolio of Investments as at 30 June 2014 (Continued)
Arctic High Return (Continued)
Coupon
Rate % Maturity Date Quantity
Fair Value NOK
% of Net Asset Value FINANCIAL ASSETS AT FAIR VALUE
Corporate Bonds - 97.83% Industrial - 39.83% Marshall Islands Golar LNG Partners LP 6.90% 12/10/2017 23,000,000 24,311,000 1.10 Navigator Holdings Ltd. 9.00% 18/12/2017 3,000,000 19,974,882 0.90 Teekay Corp. 6.43% 9/10/2015 25,000,000 25,557,500 1.15 Teekay LNG Partners LP 6.91% 3/05/2017 11,500,000 12,139,400 0.55 Teekay Offshore Partners LP 6.42% 25/01/2018 15,000,000 26,556,100 1.20 108,538,882 4.90
Norway
Boa Deep C A/S 7.18% 27/04/2016 11,080,995 11,392,371 0.51
BOA Offshore A/S 8.40% 18/12/2018 8,000,000 8,192,000 0.37
BOA Sbl A/S 7.20% 19/04/2018 20,900,000 21,040,030 0.95
Bonheur ASA 6.67% 10/02/2019 19,500,000 20,925,450 0.94
DOF ASA 8.64% 12/09/2019 44,000,000 46,855,600 2.11
DOF ASA 6.41 02/07/18 6.54% 7/02/2018 22,500,000 22,486,500 1.01
E Forland A/S 8.41% 4/09/2018 5,893,333 6,065,418 0.27
Farstad Shipping ASA 5.87% 15/02/2017 6,000,000 21,298,500 0.96
Fjord Line A/S 9.18% 5/02/2016 19,000,000 19,370,500 0.87
Havila Shipping ASA 5.55% 8/11/2016 9,628,593 27,223,515 1.22 Hexagon Composites ASA 6.70% 2/07/2018 9,000,000 9,531,000 0.43 Klaveness Ship Holding AS 6.07% 20/03/2020 34,000,000 34,139,400 1.54 Norwegian Car Carriers ASA 10.50% 29/09/2015 13,855,556 14,132,667 0.64 Ocean Yield ASA 5.65% 26/03/2019 41,500,000 41,815,400 1.89
Odfjell SE 7.46% 11/04/2017 12,500,000 19,220,850 0.86
Olympic Shipping A/S 7.86% 21/09/2017 15,000,000 15,654,000 0.71 Olympic Shipping AS 6.83% 18/06/2019 18,000,000 18,003,600 0.81 Rem Offshore ASA 7.40% 14/03/2018 28,000,000 28,742,000 1.30 Solstad Offshore ASA 6.04% 25/02/2016 10,000,000 23,340,300 1.06 Vestland Offshore Invest A/S 11.68% 15/01/2016 4,000,000 4,202,800 0.19 Viking Supply Ships A/S 9.91% 21/03/2017 21,000,000 22,302,000 1.01 Volstad Subsea A/S 8.19% 5/07/2016 7,876,923 8,112,443 0.37 Western Bulk AS 8.52% 19/04/2017 12,000,000 12,420,000 0.56 Wilh Wilhelmsen ASA 2.71% 30/03/2020 5,000,000 4,702,000 0.21 World Wide Supply AS 7.75% 26/05/2017 3,000,000 18,397,870 0.83 479,566,214 21.62 Sweden AR Packaging Group AB 6.08% 9/07/2017 1,000,000 8,740,923 0.39 Kahrs Holding AB 8.37% 20/12/2017 20,000,000 19,464,030 0.88 Polygon AB 5.33% 16/04/2019 1,200,000 10,079,905 0.46 38,284,858 1.73 Technology - 2.79% Denmark AX IV EG Holding III 6.84% 2/12/2020 23,250,000 26,742,126 1.21 Norway
Dolphin Group A/S 9.41% 14/11/2016 5,000,000 35,079,900 1.58 35,079,900 1.58
Arctic High Return (Continued)
The accompanying notes are an integral part of the Financial Statements.
Coupon
Rate % Maturity Date Quantity
Fair Value NOK
% of Net Asset Value FINANCIAL ASSETS AT FAIR VALUE
Forward Foreign Currency Contracts Maturity Date Counterparty
Amount Sold
Amount Bought
17 September 2014 BNY Mellon USD 4,400,000 NOK 27,151,960 81,889 0.00
Total Forward Foreign Currency Contracts 81,889 0.00
Total Financial Assets at Fair Value 2,168,056,995 97.83
FINANCIAL LIABILITIES AT FAIR VALUE Forward Foreign Currency Contracts
Date Counterparty
Amount Sold
Amount Bought
17 September 2014 BNY Mellon EUR 9,315,000 EUR 75,914,083 (2,581,751) (0.12) 17 September 2014 BNY Mellon EUR 2,000,000 EUR 16,253,230 (600,411) (0.03) 17 September 2014 BNY Mellon DKK 10,000,000 NOK 11,216,250 (88,121) 0.00 17 September 2014 BNY Mellon DKK 13,720,000 NOK 14,994,588 (515,009) (0.02) 17 September 2014 BNY Mellon SEK 147,550,000 NOK 133,358,115 (2,395,771) (0.11) 17 September 2014 BNY Mellon SEK 10,000,000 NOK 9,136,742 (63,793) 0.00 17 September 2014 BNY Mellon USD 4,400,000 NOK 26,409,680 (581,435) (0.02) 17 September 2014 BNY Mellon USD 40,600,000 NOK 244,432,300 (5,350,629) (0.24)
Total Forward Foreign Currency Contracts (12,176,920) (0.54)
Total Financial Liabilities at Fair Value (12,176,920 ) (0.54)
Net Investments at Fair Value 2,155,880,075 97.29
Cash at bank 41,026,627 1.85
Other assets in excess of liabilities 19,128,796 0.86
Total Net Assets 2,216,035,498 100.00
Analysis of Total Assets
% of Total Assets
Transferable securities admitted to an official exchange
listing or traded on a regulated market 95.19%
Other assets 4.81%
Total Assets 100.00%
For the six months period ended 30 June 2014
Portfolio of Investments as at 30 June 2014 (Continued)
Arctic Investment Grade
Coupon
Rate % Maturity Date Quantity
Fair Value NOK
% of Net Asset Value FINANCIAL ASSETS AT FAIR VALUE
Corporate Bonds - 99.59% Basic Materials - 1.30% Norway Borregaard ASA 2.78% 26/02/2019 10,000,000 10,047,000 1.30 Communications - 3.91% Norway Atea ASA 3.74% 19/06/2018 21,000,000 21,359,100 2.75 Schibsted ASA 2.90% 6/05/2021 9,000,000 9,000,900 1.16 30,360,000 3.91 Consumer Cyclical - 1.77% Sweden Volvo Treasury AB 1.88% 15/04/2019 15,000,000 13,738,748 1.77 Consumer Non-cyclical - 1.81% Norway Nortura SA 6.94% 19/11/2014 3,000,000 3,053,400 0.39 Sweden ICA Gruppen AB 1.97% 17/06/2019 12,000,000 11,003,116 1.42 Consumer, Cyclical - 4.92% Norway BWG Homes ASA 5.45% 28/11/2018 35,000,000 38,192,000 4.92 Consumer, Non-cyclical - 8.49% Denmark
Arla Foods amba 2.73% 22/06/2016 10,000,000 9,372,148 1.21
Arla Foods Finance A/S 2.78% 4/06/2018 28,000,000 26,331,981 3.39 35,704,129 4.60 Norway Felleskjopet Agri BA 3.85% 13/02/2018 15,000,000 15,654,000 2.02 TINE S.A. 2.92% 4/04/2018 5,000,000 5,109,000 0.66 20,763,000 2.68 Sweden ICA Gruppen AB 2.60% 25/06/2018 10,000,000 9,425,393 1.21 Financial - 64.68% Denmark
Danske Bank A/S 4.27% 6/12/2023 26,000,000 26,936,000 3.47
Finland
Sampo 2.55% 29/05/2018 17,000,000 15,848,377 2.04
Netherlands
LeasePlan Corp. NV 3.69% 7/09/2015 10,000,000 10,178,000 1.31 Norway
Bank Norwegian A/S 2.49% 23/05/2016 9,000,000 22,312,700 2.87 Bien Sparebank A/S 3.65% 26/09/2016 13,000,000 13,406,900 1.73
Arctic Investment Grade (Continued)
The accompanying notes are an integral part of the Financial Statements.
Coupon
Rate % Maturity Date Quantity
Fair Value NOK
% of Net Asset Value FINANCIAL ASSETS AT FAIR VALUE
Corporate Bonds - 99.59% Financial - 64.68% Norway Brage Finans AS 2.88% 20/05/2016 14,000,000 14,002,800 1.81 DNB Bank ASA 3.35% 19/06/2023 8,000,000 8,083,200 1.04 DnB NOR Boligkreditt 1.98% 18/05/2016 500,000 501,950 0.06
Drangedal & Tordal Sparebank 2.92% 4/09/2018 5,000,000 5,057,500 0.65 Entra Eiendom A/S 2.96% 10/04/2017 10,000,000 10,149,000 1.31 Gjensidige Bank ASA 3.37% 17/06/2024 8,000,000 7,967,200 1.03 Kredittforeningen for Sparebanker 2.75% 29/10/2018 10,000,000 10,138,000 1.31 Landkreditt Finans AS 3.07% 21/10/2016 10,000,000 20,106,000 2.59 Norwegian Property ASA 3.04% 5/04/2019 10,000,000 10,036,000 1.29 Olav Thon Eiendomsselskap ASA 2.96% 31/10/2018 25,000,000 25,417,500 3.28
Opdals Sparebank 2.80% 23/02/2016 5,000,000 5,058,500 0.65
Orkdal Sparebank 2.44% 7/05/2018 13,000,000 12,997,400 1.67
Pareto Bank ASA 3.51% 2/11/2015 7,000,000 27,395,900 3.54
Rindal Sparebank 2.50% 5/09/2016 10,000,000 10,050,000 1.30 Santander Consumer Bank A/S 2.93% 18/11/2016 28,000,000 28,142,800 3.63 Sektor Gruppen A/S 4.30% 14/12/2016 20,000,000 20,664,000 2.66 Sparebank 1 Nord Norge 4.75% 20/09/2017 8,000,000 23,231,400 3.00 SpareBank 1 Ringerike Hadeland 3.36% 12/06/2024 10,000,000 10,002,000 1.29
Sparebank 1 SMN 3.55% 15/03/2017 3,500,000 19,305,882 2.49
SpareBank 1 SMN 1.50% 20/05/2019 500,000 4,228,937 0.54
Sparebank 1 SR Bank ASA 5.18% 2/12/2021 10,000,000 20,607,000 2.65 SpareBank 1 SR Bank ASA 2.13% 14/04/2021 2,500,000 21,430,255 2.76 Sparebanken Hedmark 3.39% 13/06/2023 3,000,000 3,028,500 0.39
Sparebanken More 4.15% 22/02/2023 8,000,000 8,268,800 1.07
Sparebanken Pluss 3.63% 27/11/2023 10,000,000 10,124,000 1.30 Sparebanken Vest 3.56% 10/10/2023 13,000,000 21,176,800 2.73 Steen & Strom AS 3.04% 21/02/2019 5,000,000 5,038,500 0.65
Storebrand ASA 3.52% 22/10/2018 5,000,000 5,112,500 0.66
Storebrand Livsforsikring 4.46% 31/03/2049 5,000,000 5,018,000 0.65 Thon Reitan A/S 3.09% 17/10/2016 10,000,000 10,090,000 1.30
Vardar AS 3.87% 14/12/2017 5,000,000 5,045,500 0.65 423,195,424 54.55 Sweden Ikano Bank AB 2.71% 29/01/2016 15,000,000 13,884,714 1.79 Skandiabanken AB 2.23% 14/08/2020 5,000,000 5,030,000 0.65 Sparbanken Oresund AB 3.91% 27/11/2023 7,000,000 6,744,293 0.87 25,659,007 3.31 Industrial - 8.11% Denmark
AP Moeller - Maersk A/S 3.76% 22/03/2017 17,000,000 17,729,300 2.29 Norway Avinor A/S 3.75% 8/05/2020 8,000,000 8,363,200 1.08 Veidekke ASA 3.41% 4/06/2018 10,000,000 10,285,000 1.32 18,648,200 2.40 Sweden NCC Treasury AB 2.76% 30/08/2018 10,000,000 9,367,558 1.21
Skanska Financial Services AB 3.01% 12/03/2018 18,000,000 17,159,045 2.21 26,526,603 3.42
For the six months period ended 30 June 2014
Portfolio of Investments as at 30 June 2014 (Continued)
Arctic Investment Grade (Continued)
Coupon
Rate % Maturity Date Quantity
Fair Value NOK
% of Net Asset Value FINANCIAL ASSETS AT FAIR VALUE
Corporate Bonds - 99.59% Technology - 1.11% Finland Tieto OYJ 2.88% 23/05/2019 1,000,000 8,635,095 1.11 Utilities - 3.49% Norway
Fredrikstad Energi A/S 3.83% 30/10/2017 26,000,000 27,089,400 3.49
Total Corporate Bonds 772,732,192 99.59
Total Financial Assets at Fair
Value 772,732,192 99.59
FINANCIAL LIABILITIES AT FAIR VALUE Interest Rate Swaps - (0.13)%
European Union Counterparty
3 Month EURIBOR Swedbank 1.03% 21/02/2018 1,800,000 (368,737 ) (0.05) 3 Month EURIBOR Swedbank 0.68% 20/05/2019 500,000 (29,976 ) – 3 Month EURIBOR Swedbank 1.29% 14/04/2021 2,500,000 (624,858 ) (0.08) (1,023,571 ) (0.13)
Total Interest Rate Swaps (1,023,571 ) (0.13)
Forward Foreign Currency Contracts
Date Counterparty
Amount Sold
Amount Bought
18 August 2014 BNY Mellon SEK 117,500,000 NOK 106,225,780 (1,902,784) (0.24) 17 September 2014 BNY Mellon EUR 5,830,000 NOK 47,512,518 (1,615,846) (0.21)
Total Forward Foreign Currency Contracts (3,518,630) (0.45)
Total Financial Liabilities at Fair Value (4,542,201 ) (0.58)
Net Investments at Fair Value 768,189,991 99.01
Cash at bank 6,547,192 0.84
Other assets in excess of liabilities 1,154,349 0.15
Total Net Assets 775,891,532 100.00
Analysis of Total Assets
% of Total Assets
Transferable securities admitted to an official exchange
listing or traded on regulated market 98.76%
Other assets 1.24%
Total Assets 100.00%
Portfolio of Investments as at 30 June 2014 (Continued)
Arctic Norwegian Equities
The accompanying notes are an integral part of the Financial Statements.
Shares
Fair Value NOK
% of Net Asset Value FINANCIAL ASSETS AT FAIR VALUE
Common Stock - 94.82% Basic Materials - 6.78%
Norway
Borregaard ASA 200,000 8,880,000 0.49
Yara International ASA 371,024 114,015,675 6.29
122,895,675 6.78 Communications - 8.96% Norway PEXIP A/S 160,000 1,760,000 0.10 Schibsted ASA 41,860 13,374,270 0.74 Telenor ASA 1,054,133 147,262,380 8.12 162,396,650 8.96 Consumer Non-cyclical - 1.54% Norway Nordic Nanovector AS 960,000 24,000,000 1.32 Targovax AS 182,000 3,913,000 0.22 27,913,000 1.54 Consumer, Cyclical - 4.77% Norway
Norwegian Air Shuttle A/S 59,775 12,038,685 0.66
Royal Caribbean Cruises Ltd. 218,880 74,528,640 4.11
86,567,325 4.77
Consumer, Non-cyclical - 12.68%
Norway
Aqualis ASA 2,810,000 9,132,500 0.50
Austevoll Seafood ASA 984,202 39,663,341 2.19
Cermaq ASA 105,634 8,926,073 0.49
Clavis Pharma ASA 3,402,369 13,779,594 0.76
Leroy Seafood Group ASA 60,639 13,583,136 0.75
Marine Harvest ASA 694,000 58,122,500 3.21
Nutri Pharma ASA 3,189,945 8,357,656 0.46
Orkla ASA 642,000 35,085,300 1.94 Salmar ASA 328,567 35,156,669 1.94 221,806,769 12.24 Sweden Cortendo AB 1,881,000 7,994,250 0.44 Energy - 20.25% Norway
Det Norske Oljeselskap ASA 429,018 28,744,206 1.59
DNO International ASA 1,890,000 44,585,100 2.46
Electromagnetic Geo-Services ASA 371,567 2,374,313 0.13
Petroleum Geo-Services ASA 472,580 30,717,700 1.69
REC Solar A/S 105,863 9,892,897 0.54
Renewable Energy Corp. ASA 4,893,607 17,352,731 0.96
Statoil ASA 757,293 142,674,001 7.87
Subsea S.A. 480,217 54,936,825 3.03
TGS Nopec Geophysical Co. ASA 113,300 22,218,130 1.23 353,495,903 19.50
United States
For the six months period ended 30 June 2014
Portfolio of Investments as at 30 June 2014 (Continued)
Arctic Norwegian Equities (Continued)
Shares
Fair Value NOK
% of Net Asset Value FINANCIAL ASSETS AT FAIR VALUE (continued)
Common Stock - 94.82% (continued) Financial - 18.42%
Norway
DnB NOR ASA 1,486,210 166,752,762 9.20
Gjensidige Forsikring ASA 528,509 58,135,990 3.21
Sparebank 1 SR Bank ASA 705,033 42,125,722 2.33
Sparebanken 1 SMN 495,390 26,874,907 1.48 Sparebanken Nord-Norge 1,124,907 39,934,199 2.20 333,823,580 18.42 Industrial - 13.10% Bermuda Frontline 2012 Ltd. 496,000 23,560,000 1.30 Stolt-Nielsen Ltd. 211,072 31,660,800 1.75 55,220,800 3.05 Marshall Islands Dorian LPG Ltd. 135,360 17,867,520 0.98 Norway AF Gruppen ASA 120,900 8,704,800 0.48
American Shipping ASA 210,586 9,160,491 0.51
Deep Sea Supply PLC 1,066,700 10,613,665 0.59
Next Biometrics Group A/S 205,650 15,115,275 0.83
Norsk Hydro ASA 2,464,959 80,924,604 4.47
Telio Holding ASA 756,800 35,569,600 1.96
Veidekke ASA 45,000 3,105,000 0.17
Wilh. Wilhelmsen ASA 21,377 1,122,292 0.06
164,315,727 9.07
Technology - 6.31%
Israel
Vizrt Ltd. 1,262,110 33,572,126 1.85
Norway
Dolphin Group A/S 2,272,594 13,999,179 0.77
Nordic Semiconductor ASA 960,953 29,212,971 1.61
Opera Software ASA 459,808 37,612,295 2.08
80,824,445 4.46
Utilities - 2.01%
Bermuda
BW LPG Ltd. 404,217 36,379,530 2.01
Total Common Stock 1,718,705,399 94.82
Private Placements - 0.03% Energy - 0.03%
Norway
NBT A/S + 33,000 495,000 0.03
Total Private Placements 495,000 0.03
Total Financial Assets at Fair Value 1,719,200,399 94.85
Net Investments at Fair Value 1,719,200,399 94.85
Portfolio of Investments as at 30 June 2014 (Continued)
Arctic Norwegian Equities (Continued)
The accompanying notes are an integral part of the Financial Statements.
Shares
Fair Value NOK
% of Net Asset Value
FINANCIAL ASSETS AT FAIR VALUE (continued)
Liabilities in excess of other assets (40,306,052) (2.22)
Total Net Assets 1,812,479,272 100.00
+ Private Placements are valued in good faith by the Investment Manager.
Analysis of Total Assets
% of Total Assets
Transferable securities admitted to an official exchange
listing or traded on a regulated market 92.49% Transferable securities other than those admitted to an
official exchange listing or traded on a regulated market 0.03%
Other assets 7.48%
Total Assets 100.00%
For the six months period ended 30 June 2014
Balance Sheet as at 30 June 2014
Arctic Covered Arctic Global Equities Arctic High Return Arctic Investment Grade Arctic Norwegian Equities Total
NOK NOK NOK NOK NOK NOK
Assets Note
Financial assets at fair value through profit or loss 3 660,175,000 544,692,286 2,168,056,995 772,732,192 1,719,200,399 5,864,856,872
Cash at bank 8 13,035,410 5,425,441 40,940,607 6,547,192 133,584,925 199,533,575
Interest receivable 1,511,825 6 21,153,045 3,183,555 1,852 25,850,283
Dividend receivable – 273,835 – – 1,564,063 1,837,898
Receivable for subscriptions 3 – – – – 3,286 3,286
Receivable from investments sold – 647,562 47,333,850 – 3,978,137 51,959,549
Other assets 18,398 19,082 6,806 7,562 14,248 66,096
Total Assets 674,740,633 551,058,212 2,277,491,303 782,470,501 1,858,346,910 6,144,107,559
Liabilities
Financial liabilities at fair value through profit or loss 3 – – 12,176,920 4,542,201 – 16,719,121
Payable for investments purchased 10,000,000 550,817 40,259,750 – 42,646,337 93,456,904
Investment management fees 4 25,495 253,260 378,150 59,619 2,413,418 3,129,942
Performance fees 4 – – 7,488,612 1,534,550 – 9,023,162
Payable for redemptions 3 – – 264,511 – 145,097 409,608
Administration fees 4 172,240 165,137 285,213 169,523 403,765 1,195,878
Custodian fees 4 86,207 53,040 229,493 92,478 117,226 578,444
Audit fees 18,073 18,073 72,290 27,109 45,181 180,726
Directors' fees 4 58 58 15 50 37 218
Interest payable – – 133,580 93,822 – 227,402
Other payables and accrued expenses 40,586 39,418 167,271 59,617 96,577 403,469
Total Liabilities (excluding Net Assets attributable to holders of
redeemable participating shares) 10,342,659 1,079,803 61,455,805 6,578,969 45,867,638 125,324,874
Net Assets attributable to holders of redeemable participating shares 664,397,974 549,978,409 2,216,035,498 775,891,532 1,812,479,272 6,018,782,685
Represented by:
Net Assets attributable to holders of redeemable participating shares based on
dealing NAV (at last traded market prices) 664,508,346 550,088,781 2,216,145,870 776,001,904 1,812,589,644 6,019,334,545
FRS 10 adjustment in relation to organisational costs 3 (110,372) (110,372) (110,372) (110,372) (110,372) (551,860)
Net Assets attributable to holders of redeemable participating shares (at
bid/ask market prices) 664,397,974 549,978,409 2,216,035,498 775,891,532 1,812,479,272 6,018,782,685
Number of shares issued
Class A NOK 6 – 12,818 125,724 – 25,581 –
Class B NOK 6 592,913 56,683 1,316,535 639,899 172,963 –
Class B SEK 6 – – – 25,481 – –
Class D NOK 6 – – 294,340 – 875,306 –
Balance Sheet as at 30 June 2014 (Continued)
The accompanying notes are an integral part of the Financial Statements.
Arctic Covered Arctic Global Equities Arctic High Return Arctic Investment Grade Arctic Norwegian Equities
NOK NOK NOK NOK NOK
Dealing Net Asset Value per share
Class A NOK – 1,168.24 1,313.67 – 1,434.65 – Class B NOK 1,120.75 1,228.11 1,320.88 1,172.74 1,536.15 – Class B SEK – – – 1,093.01 – – Class D NOK – – 1,060.01 – 1,372.20 – Class I NOK – 1,281.14 – – 1,561.42 –
For the six months period ended 30 June 2014
Balance Sheet as at 31 December 2013
Arctic Covered Arctic Global Equities Arctic High Return Arctic Investment Grade Arctic Norwegian Equities Total
NOK NOK NOK NOK NOK NOK
Assets Note
Financial assets at fair value through profit or loss 3 629,054,300 502,170,575 1,814,953,215 901,778,575 1,161,806,671 5,009,763,336
Cash at bank 8 18,137,506 2,611,703 34,291,572 12,445,625 57,099,107 124,585,513
Interest receivable 1,486,128 32 20,147,924 5,117,241 1,586 26,752,911
Dividend receivable – 273,138 – – 264,644 537,782
Receivable for subscriptions 3 – – – – 3,001,754 3,001,754
Receivable from investments sold – 5,835,544 – – 30,792,072 36,627,616
Other assets 6,211 6,197 22,730 6,197 6,198 47,533
Total Assets 648,684,145 510,897,189 1,869,415,441 919,347,638 1,252,972,032 5,201,316,445
Liabilities
Financial liabilities at fair value through profit or loss 3 – – 639,687 1,509,862 – 2,149,549
Payable for investments purchased – 5,575,189 – 5,001,500 66,213,487 76,790,176
Investment management fees 4 26,590 165,814 323,761 73,407 10,188,183 10,777,755
Performance fees 4 – – 7,461,481 1,832,151 – 9,293,632
Payable for redemptions 3 – – 3,153,273 – – 3,153,273
Administration fees 4 161,784 162,992 173,516 155,968 252,485 906,745 Custodian fees 4 54,813 33,430 127,838 63,511 70,139 349,731 Audit fees 71,867 67,397 68,569 68,566 68,571 344,970 Directors' fees 4 – – – – – – Interest payable – 63 – 416,048 – 416,111 Dividend payable – – 253 – – 253
Other payables and accrued expenses 26,548 27,385 28,018 38,536 25,888 146,375
Total Liabilities (excluding Net Assets attributable to holders of
redeemable participating shares) 341,602 6,032,270 11,976,396 9,159,549 76,818,753 104,328,570
Net Assets attributable to holders of redeemable participating shares 648,342,543 504,864,919 1,857,439,045 910,188,089 1,176,153,279 5,096,987,875
Represented by:
Net Assets attributable to holders of redeemable participating shares based on
dealing NAV (at last traded market prices) 648,495,140 505,017,516 1,857,591,642 910,340,686 1,176,305,876 5,097,750,860
FRS 10 adjustment in relation to organisational costs 3 (152,597) (152,597) (152,597) (152,597) (152,597) (762,985)
Net Assets attributable to holders of redeemable participating shares (at
bid/ask market prices) 648,342,543 504,864,919 1,857,439,045 910,188,089 1,176,153,279 5,096,987,875
Number of shares issued
Class A NOK 6 – 7,421 116,235 – 16,379 –
Class B NOK 6 587,916 57,112 1,179,652 786,529 163,040 –
Class B SEK 6 – – – 9,700 – –
Class D NOK 6 – – 219,468 – 529,266 –
Balance Sheet as at 31 December 2013 (Continued)
The accompanying notes are an integral part of the Financial Statements.
Arctic Covered Arctic Global Equities Arctic High Return Arctic Investment Grade Arctic Norwegian Equities
Dealing Net Asset Value per share NOK NOK NOK NOK NOK
Class A NOK – 1,087.72 1,257.37 – 1,308.73 – Class B NOK 1,103.04 1,138.93 1,262.62 1,144.97 1,395.74 – Class B SEK – – – 1,009.41 – – Class D NOK – – 1,011.49 – 1,251.39 – Class I NOK – 1,186.57 – – 1,417.25 –
For the six months period ended 30 June 2014
Profit and Loss Account for the period ended 30 June 2014
Arctic Covered Arctic Global Equities Arctic High Return Arctic Investment Grade Arctic Norwegian Equities Total
NOK NOK NOK NOK NOK NOK
Income Note
Interest income 3 8,175,480 7,266 71,252,130 14,145,966 122,382 93,703,224
Dividend income 3 – 8,728,790 – – 45,032,379 53,761,169
Other income 21,525 – 1,632,213 72,866 – 1,726,604
Net realised gain/(loss) on:
- investments 1,226,813 24,823,432 (6,596,545 ) 6,659,002 61,143,577 87,256,279
- foreign currency – 2,417,376 17,957,647 8,741,506 (17,488 ) 29,099,041
Net change in unrealised appreciation/(depreciation) on:
- investments 2,668,501 3,466,553 39,025,130 2,461,045 47,515,682 95,136,911
- foreign currency – 5,421,641 (13,944,452 ) (8,410,066 ) 10,562 (16,922,315 )
Total investment income 12,092,319 44,865,058 109,326,123 23,670,319 153,807,094 343,760,913
Expenses
Investment management fees 4 323,804 2,053,047 3,443,136 816,076 9,779,741 16,415,804
Performance fees 4 – – 7,488,612 1,534,550 – 9,023,162 Administration fees 4 345,421 346,026 531,699 356,974 766,882 2,347,002 Custodian fees 4 180,563 154,153 518,525 214,915 408,574 1,476,730 Audit fees 4 17,196 21,665 74,711 29,533 47,601 190,706 Legal expenses 109,897 109,562 379,414 153,959 242,752 995,584 Directors' fees 4 18,318 18,318 36,531 21,352 27,424 121,943 Interest expense 610,217 – 4,407,118 1,409,239 – 6,426,574 Other expenses 30,892 44,821 77,255 40,352 72,375 265,695 Total expenses 1,636,308 2,747,592 16,957,001 4,576,950 11,345,349 37,263,200
Net income from operations before taxation 10,456,011 42,117,466 92,369,122 19,093,369 142,461,745 306,497,713
Taxation
Withholding tax – 1,733,780 – – 10,374,036 12,107,816
Total taxation – 1,733,780 – – 10,374,036 12,107,816
Net increase in Net Assets attributable to holders of redeemable participating shares resulting from operations (based on bid/ask
market prices) 10,456,011 40,383,686 92,369,122 19,093,369 132,087,709 294,389,897
FRS 10 adjustment in relation to organisational costs 3 (42,224 ) (42,224 ) (42,224 ) (42,224 ) (42,224 ) (211,120 )
Net increase in Net Assets attributable to holders of redeemable participating shares resulting from operations (based on last traded
market prices) 10,413,787 40,341,462 92,326,898 19,051,145 132,045,485 294,178,777
Profit and Loss Account for the year ended 31 December 2013
The accompanying notes are an integral part of the Financial Statements.
Arctic Covered Arctic Global Equities Arctic High Return Arctic Investment Grade Arctic Norwegian Equities Total
NOK NOK NOK NOK NOK NOK
Income Note
Interest income 3 17,487,970 49,406 137,487,974 23,992,705 164,389 179,182,444
Dividend income 3 – 6,766,892 – – 30,356,588 37,123,480
Other income – 142 5,171,827 (2,361 ) – 5,169,608
Net realised gain/(loss) on:
- investments 3,168,885 26,560,507 12,708,710 5,654,917 115,055,233 163,148,252
- foreign currency – 7,172,704 (14,937,687 ) (10,842,818 ) (60,129 ) (18,667,930 )
Net change in unrealised appreciation/(depreciation) on:
- investments (560,221 ) 35,053,822 (27,015,170 ) 5,114,592 104,767,325 117,360,348
- foreign currency – 19,742,590 18,685,807 12,564,675 (10,562 ) 50,982,510
Total investment income 20,096,634 95,346,063 132,101,461 36,481,710 250,272,844 534,298,712
Expenses
Investment management fees 4 657,621 2,648,775 4,929,536 1,263,098 19,585,541 29,084,571
Performance fees 4 – – 8,891,074 2,101,395 – 10,992,468 Administration fees 4 578,736 591,052 862,893 578,642 984,995 3,596,318 Custodian fees 4 328,050 282,312 852,515 326,570 531,474 2,320,921 Audit fees 4 90,793 86,323 89,936 87,493 89,937 444,482 Legal expenses 135,295 135,295 184,373 135,295 135,295 725,554 Directors' fees 4 47,948 47,903 47,903 47,903 47,903 239,560 Interest expense 887,750 7,526 7,037,380 1,991,597 25 9,924,278 Other expenses 77,005 95,390 94,754 84,558 110,290 461,997 Total expenses 2,803,198 3,894,576 22,990,364 6,616,551 21,485,460 57,790,149
Net income from operations before taxation 17,293,436 91,451,487 109,111,097 29,865,159 228,787,384 476,508,563
Taxation
Withholding tax – 1,610,534 – – 5,026,998 6,637,532
Total taxation – 1,610,534 – – 5,026,998 6,637,532
Net increase in Net Assets attributable to holders of redeemable participating shares resulting from operations (based on bid/ask
market prices) 17,293,436 89,840,953 109,111,097 29,865,159 223,760,386 469,871,031
FRS 10 adjustment in relation to organisational costs 3 (85,148 ) (85,148 ) (85,148 ) (85,148 ) (85,148 ) (425,739 )
Net increase in Net Assets attributable to holders of redeemable participating shares resulting from operations (based on last traded
market prices) 17,208,288 89,755,805 109,025,949 29,780,011 223,675,238 469,445,291
For the six months period ended 30 June 2014
Profit and Loss Account for the period ended 30 June 2013
Arctic Covered Arctic Global Equities Arctic High Return Arctic Investment Grade Arctic Norwegian Equities Total
NOK NOK NOK NOK NOK NOK
Income Note
Interest income 3 9,099,354 33,953 67,096,904 10,260,364 72,430 86,563,005
Dividend income 3 – 3,587,642 – – 21,144,252 24,731,894
Other income – – 7,371,719 180 1,699,172 9,071,071
Net realised gain/(loss) on:
- investments 2,046,699 12,604,580 2,857,725 4,651,649 26,979,893 49,140,546
- foreign currency 71 (1,860,007) (2,570,532 ) (2,877,066 ) (21,094 ) (7,328,628 )
Net change in unrealised appreciation/(depreciation) on:
- investments 327,386 (1,433,278) (16,513,095 ) 2,454,644 13,917,806 (1,246,537 )
- foreign currency 629 19,763,508 5,159,280 3,736,666 – 28,660,083
Total investment income 11,474,139 32,696,398 63,402,001 18,226,437 63,792,459 189,591,434
Expenses
Investment management fees 4 326,951 1,126,283 2,313,873 529,319 4,066,615 8,363,041
Performance fees 4 – – 4,222,310 1,205,723 – 5,428,033 Administration fees 4 220,856 226,908 414,122 216,523 387,316 1,465,725 Custodian fees 4 169,557 116,233 434,646 145,524 216,889 1,082,849 Audit fees 4 46,344 46,344 48,785 46,345 48,786 236,604 Legal expenses 30,514 29,540 29,376 29,540 30,662 149,632 Directors' fees 4 22,129 22,131 22,070 22,130 22,132 110,592 Interest expense 672,978 724 4,053,022 378,955 2 5,105,681 Other expenses 40,394 45,379 50,634 41,985 51,135 229,527 Total expenses 1,529,723 1,613,542 11,588,838 2,616,044 4,823,537 22,171,684
Net income from operations before taxation 9,944,416 31,082,856 51,813,163 15,610,393 58,968,922 167,419,750
Taxation
Withholding tax – 895,052 – – 4,671,379 5,566,431
Total taxation – 895,052 – – 4,671,379 5,566,431
Net increase in Net Assets attributable to holders of redeemable participating shares resulting from operations (based on bid/ask market
prices) 9,944,416 30,187,804 51,813,163 15,610,393 54,297,543 161,853,319
FRS 10 adjustment in relation to organisational costs 3 (41,758 ) (41,758) (41,758 ) (41,758 ) (41,758 ) (208,790 )
Net increase in Net Assets attributable to holders of redeemable participating shares resulting from operations (based on last traded
market prices) 9,902,658 30,146,046 51,771,405 15,568,635 54,255,785 161,644,529
Statement of Changes in Net Assets attributable to Redeemable Participating Shareholders for the period ended 30 June 2014
The accompanying notes are an integral part of the Financial Statements.
Arctic Covered Arctic Global Equities Arctic High Return Arctic Investment Grade Arctic Norwegian Equities Total
NOK NOK NOK NOK NOK NOK
Net assets attributable to holders of redeemable participating shares
at beginning of period 648,342,543 504,864,919 1,857,439,045 910,188,089 1,176,153,279 5,096,987,875
Proceeds for redeemable shares issued 47,000,000 20,055,409 426,456,957 111,841,254 552,130,880 1,157,484,500
Payments for redeemable shares redeemed (41,400,580 ) (15,325,605 ) (160,229,626) (265,231,180 ) (47,892,596 ) (530,079,587 )
Net increase in net assets attributable to holders of redeemable
participating shares from operations 10,456,011 40,383,686 92,369,122 19,093,369 132,087,709 294,389,897
Net assets attributable to holders of redeemable participating shares
at end of period 664,397,974 549,978,409 2,216,035,498 775,891,532 1,812,479,272 6,018,782,685
