Salmon Is a Winner Again for Norway's Top Performing Stock Fund

(Bloomberg) -- A Norwegian stock fund is making its familiar swim upstream.

Forte Tronder is once again Norway’s best performing stock fund, boosted by a bet on salmon in its native Trondelag region. That comes after two volatile years, including a 1 percent return last year and massive 51 percent gain in 2016.

Norwegian fish stocks are this year defying predictions as salmon prices climb and many in the industry gaining a better control over costs. The industry had a dismal 2017 as the market worried about falling salmon prices and rising costs. The Oslo New Seafood Index has surged 34 percent this year, after sliding 4.8 percent last year.

“We’re still positive,” Morten Schwarz, portfolio manager, said by phone on Wednesday. “The salmon price has risen a lot and it’s keeping up better than what many have expected.”

Forte Tronder, which is based in Trondheim and mainly invests in companies with local links or production, has risen 12 percent in 2018. That’s the best among Norwegian stock funds, according to Morningstar.

Salmon Is a Winner Again for Norway's Top Performing Stock Fund

Schwarz, who oversees about about 500 million kroner ($65 million), has about 28 percent of the fund invested in the fish industry. The biggest holdings are Norway Royal Salmon ASA and SalMar ASA. He sees salmon prices remaining high enough to support good earnings.

“There will be some fluctuations through the year but I believe it can stay at a level where the fish farmers have good margins,” said Schwarz, who joined Forte in February.

Schwarz also manages the fund Forte Norge, which is a broader Norwegian stock fund. He recently bought Norsk Hydro “close to the bottom” after the aluminum price had fallen and the problems at the Alunorte refinery in Brazil erupted.

“It was an overreaction on the share price,” he said. “It had fallen a lot because of the aluminum price and all the noise. We thought all that noise would subdue at least a bit.”

Norwegian Air Shuttle ASA is another holding in Forte Norge. British Airways owner, IAG SA, said last week that it has bought a stake the low-cost airline and is considering a full offer.

“It’s difficult to say any value and what an industrial player is willing to pay depends on synergies and market position,” he said. “We will evaluate a bid and it will be exciting to see what happens with Norwegian.”

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