– He was a star – E24

Folketrygdfondet secured $3.4 billion from Danish company Novo Nordisk, which skyrocketed on the Copenhagen Stock Exchange and became the most valuable company in Europe.

Danish pharmaceutical giant Novo Nordisk has seen explosive growth in recent years, and its stock market value has risen sharply.

During 2023, the company's market capitalization rose from NOK 3,000 billion to more than NOK 4,700 billion, before rising this year to about NOK 5,800 billion.

Europe's most valuable company previously made good profits by supplying insulin to diabetics around the world, but recently treating obesity has also become an important source of income.

Folketrygdfondet has also benefited from this.

– He has been a star for a long time, Folketrygfondet president Kjetil Houg tells E24.

The fund's annual report was presented on Friday.

He raised $3.4 billion in Novo Nordisk

The annual report showed that the largest contribution to the result in the stock portfolio, amounting to NOK 3.4 billion, came from Novo Nordisk shares.

The fund owns Novo Nordisk shares worth about nine billion at the end of 2023.

Hauge points out that the Danish pharmaceutical giant captured a large portion of the proceeds on the Copenhagen Stock Exchange.

– It was the most important contributor to the stock portfolio's return last year, he said.

Novo Nordisk had after-tax profits of about 84 billion Danish kroner last year, compared with 55 billion Danish kroner the year before, according to a company report. Annual Report.

Novo Nordisk recently announced significant investments in new capabilities. Last year, the company announced production expansions totaling more than NOK 115 billion.

This applies, among other things, to the production of anti-obesity products such as Wegovy and Ozempic.

– Wegovy could become a gold mine, said analyst Søren Luntoft Hansen at Danish bank Sydbank. to E24 last summer.

– Made important achievements

According to Haug, Folketrygdfondet is a long-term shareholder in Novo Nordisk.

– It's a success story. Hogg says there is now a relatively limited product range at the company, but they have an exceptionally good business model and are now capitalizing on it.

– They have made important breakthroughs, especially in dietetic medicine.

Novo Nordisk's share has risen by about 70 percent in the past year:

Hoge points out that Novo Nordisk has succeeded in continuing to develop the molecule that the company used to treat diabetes.

– It is a medicine with good results. They are now also able to increase production of this drug. This is why they have this crazy development.

– All thanks to the company for the good work over many years.

-Novo Nordisk has become one of the fund's largest equity positions. Do overweightoverweightOverweight in this context means that the investor has an additional number of shares in the company, such that the share of shares in the portfolio is greater than the share of shares in the general market. or weight lossweight lossUnderweight in this context means that the investor has fewer shares in the company than usual, so that the share of shares in the portfolio is less than the share of shares in the general market. In stock?

-We don't usually comment on that. Some of the few secrets we keep are the exact location in each company.

But we deliver a result that has an additional return on it 150 basis points150 basis points150 basis points is the same as 1.5 percentage points.. Obviously, if we had been very wrong in the Novo Nordisk share, the result might not have been so good, Hoge says.

Last year, the fund's equity investments returned 1.5 percentage points higher than the index it compares to, called the benchmark index.

Hit with a stock pick

Folketrygdfondet uses many strategies to try to outperform the market.

According to Hogg, last year's excess return was tied to company selection, meaning the fund was able to pick the right companies within each sector.

A strategy that worked well last year was to avoid what the fund calls excessive optimism, according to Hogg.

– Simply put, it is about avoiding those stocks whose prices are falling too much and whose price level is difficult to interpret well based on our fundamental evaluation.

Usually, there are stocks whose profits are far in the future and expectations are high. In the last two years, we have had very good results from exactly that strategy.

The fund's strategy of identifying high-quality companies that will perform well over time also performed well last year after underperforming in 2022, according to Hogg.

Hough also highlights the fund's return on investments in interest-bearing securities last year. The rate was 8.15 percent, giving an additional return of two percentage points.

– The fixed income portfolio forms an important part. We have positioned ourselves well going into 2022 and have increased the level of risk in the fixed income portfolio at a good time. We get a good return on that risk in 2023.