Delphi Norden: Suitability

The Delphi Norden Fund is suitable for those with a long-term investment horizon (10 years or more) and who wish to invest in an actively managed fund in the Nordic equity markets. The fund manager selects 3-5 stocks in each of at least five sectors where an upward trend in both the stock price and sector index has been identified. Typically there are 20-40 stocks in the portfolio. There are no restrictions as to the proportion of assets allocated to each of the Nordic stock markets.

The Fund is suitable in an aggressive strategy where all investments are allocated into equities. This strategy should, in general, only be considered if you have an investment horizon of 10 years or more. However, the fund may also be suitable in a balanced strategy where investments are allocated into a mix of equities and bonds when you have at least 6 years to retirement. The fund is on the other hand not suitable in a cautious strategy consisting of bonds and cash or in a safe strategy with only cash.

Stock market investments (equities) are more volatile than cash or bonds and so their value is prone to fluctuation. Year on year returns are likely to vary more dramatically, possibly delivering negative returns in some years. Conversely, equities can perform better than cash or bonds in some years and equities provide, in general, a better overall rate of return over a long period of time. However, this is not guaranteed.

Investing for retirement, as with all investment opportunities, is about balancing performance against risk. The tolerance to risk will depend on a whole range of factors; for example, whether or not other savings exist to fall back on. However, the most important consideration is likely to be age and time remaining until retirement. A younger investor may typically be more likely to invest in equities. As the time to retirement approaches, the investor may look to consolidate gains by switching equities into less volatile investments such as bond and cash funds.

Investors should note that, due to the plan's benefits being provided in Norwegian Krone but funds being invested in foreign markets, an exchange rate risk is involved.