Luminor fund portfolios. November PDF Free Download

Luminor fund portfolios November 2017

Information to make educated investment decision Benefits of diversification and correct asset allocation Model portfolio concept and the theory behind it EUR based Model portfolio offering at Luminor Investment and risk profile descriptions to find a suitable portfolio Model Portfolio Simplified Model Portfolio USD based Model portfolio offering at Luminor EUR Model portfolio historical composition This presentation is not an investment advice or an offer to buy any securities

Importance of asset allocation Investment outcomes are largely determined by the long-term mixture of assets in a portfolio Security selection and market-timing 12% Percentage of a portfolio s movements over time explained by: Asset allocation 88% Note: Calculations are based on monthly returns for 518 U.S. balanced funds from January 1962 through December 2011. (Wallick et al., 2012) Asset allocation at Luminor Academic research, best in class practice, extensive knowledge and experience Forward-looking estimates of asset classes risk and return, updated twice per year Model portfolios optimized for maximum expected return at a given risk level Luminor advises to use globally diversified model portfolios based on personal risk/return profile 4

Model portfolio concept The concept is grounded on the following fundamental insights: 1. Investors should hold diversified portfolios 2. Diversification provides a better trade-off between return and risk regardless of the chosen risk level 3. It is the risk-tolerance and return expectation of the client/investor that determines the asset allocation, the division between equity and fixed income investments Asset class allocation Equities Bonds Bond risk level allocation Equity regional allocation Low Risk Medium Risk High Risk North America Western Europe Nordics Japan Emerging Markets 5

Choice of products Well-diversified portfolio with correct asset allocation can be obtained using different product solutions depending on customer specific needs and goals Lump sum more than 5 000 EUR Model Portfolio solution Periodic Investment Lump sum less than 5 000 EUR Simplified Model Portfolio solution Both Model Portfolio and Simplified Model Portfolio solutions ensure the correct asset allocation in the portfolio Model portfolio solution more flexibility for investors with larger portfolios Simplified solution an easy way to start building an optimal portfolio or add regular installments to the existing one 6

Model Portfolio solutions in Luminor Based on Nordea Asset Management Funds Actively managed funds, covering major regions and asset classes Well-diversified portfolios, providing access to various markets for both larger and smaller investors Funds selected to provide best match to the desired asset allocation Best funds for each region/asset class selected based on various performance indicators Regular review by Luminor investment committee to ensure continuously best performance Flexibility and advanced supporting tools One fund family (Nordea, SICAV 1), providing for easy switch between funds Portfolio rebalancing possibility during regular advisory session using specialized software 7

Why we choose Nordea Asset Management funds? Leading investment manager in the Nordic region with EUR 174 billion assets under management Global business model, manages asset classes across the full investment spectrum 68 actively managed funds 44 with more than EUR 100 million in assets under management Close to 600 employees, of which 1/3 are dedicated investment specialists 3 funds with 5 stars 9 funds with 4 stars 14 funds with 3 stars by Morningstar Multi-boutique approach: internal and external investment managers 8 02/02/2015

Investment profile description Expected yearly return* Expected return distribution (3Y,6Y, 10Y)* Risk during investment period: the worst and the best 12M return Asset class breakdown Conservative You prefer to minimize the fluctuations of your investment value and therefore accept modest wealth accumulation. You are also aware that even a modest wealth accumulation does not eliminate the possibility that for a short period of time the value of your investment can decline somewhat or increase more than on average in long term. 2,2% Min. return Expected return Max. return 3Y -6% 7% 21% 6Y -5% 14% 36% 10Y -2% 25% 56% -8% 18% Oct 07-08 March 09-10 10 % Equity 70 % Bonds 20% Cash Moderate You have a low risk tolerance but you also desire a moderate wealth accumulation. Therefore you accept some decline in your investment value for shorter periods of time in order to increase expected returns on your investment over time. 3,3% Min. return Expected return Max. return 3Y -10% 10% 33% 6Y -9% 21% 58% 10Y -6% 38% 93% -16% 27% 30 % Equity 60 % Bonds 10% Cash Oct 07-08 March 09-10 Balanced You strive for a somewhat higher expected return on your investment. Therefore you accept fluctuations in your investment value in shorter periods of time in order to enable clear accumulation of your wealth over time. 4,3% Min. return Expected return Max. return 3Y -15% 14% 48% 6Y -16% 29% 86% 10Y -13% 53% 142% -24% 37% 50 % Equity 50 % Bonds Oct 07-08 March 09-10 Progressive You strive for high expected return and can tolerate large fluctuations in the portfolio value both short and long term in order to enable clear accumulation of your wealth over time. 5,2% Min. return Expected return Max. return 3Y -20% 17% 63% 6Y -22% 36% 115% 10Y -20% 67% 196% -31% 44% 70 % Equity 30 % Bonds Oct 07-08 March 09-10 Aggressive Your main objective is high expected return and you can tolerate large fluctuations in the portfolio value over time including negative portfolio return not only for a short period of time but also for longer periods. Therefore you accept that time is needed for high average return to materialize into clear accumulation of wealth; i.e. you have a long investment horizon. 6,2% Min. return Expected return Max. return 3Y -26% 20% 79% 6Y -29% 43% 148% 10Y -28% 82% 260% -39% 53% Dec 07-08 March 09-10 90 % Equity 10% Bonds * The expected return distribution at the end of the investment horizon is determined with a 90% probability. The expected return (minimum, average as well as maximum return) is not guaranteed and is calculated based on the historical data and future assumptions. The expected return can not be regarded as a safe indicator of the future investment results actual return may differ significantly from the one specified in this presentation. The value of the investment portfolio may grow or shrink depending on the developments in the global financial markets, which are affected by a number of risk factors. Investor may lose part or all of his invested capital. Luminor bears no responsibility for any losses that the customer might incur by relying on the information contained in this presentation.

Shortlisting the choice of suitable investment profiles (Model Portfolio) What is the purpose of your investments? Maintaining your wealth Your first priority is to limit the risk. You accept a lower return in order to minimize the risk of loss. Conservative risk profile Growing your wealth You want to increase your wealth. You accept a reasonable risk of loss in order to gain a reasonable return. Balanced risk profile Growing your wealth considerably You mainly seek high returns in order to increase your wealth. You accept a high risk in order to achieve high returns. Aggressive risk profile Investment profiles Conservative Moderate Balanced Progressive Aggressive Note: Detailed descriptions of the investment profiles with risk and return estimates are on the next page. Choose the most suitable to you out of the proposed 3 based on the risk and return characteristics most appropriate to your investment goals. 12

Historical performance (yearly returns)* 40% 30% 20% Aggressive 10% 0% -10% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD Progressive Balanced Moderate Conservative -20% -30% -40% *Historical performance is calculated with annual portfolio rebalancing done on the last trading day of each year. Until 31.12.2013 the historical performance is based on the returns of the underlying indices. Starting from 01.01.2014, the performance is calculated based on the specific funds in the model portfolio. Shown historical performance does not include any transaction costs, taxes or any other fees that may apply. The historical performance is presented for information purpose only. Investors actual investment result may differ from the one presented here. Past performance is not a reliable indicator of future results and investors may not recover the full amount invested. 14

Bonds Equities Conservative Portfolio Asset Fund name Weight Allocation Global Stable Equity Fund - Euro Hedged 5.5% Emerging Stars Equity Fund 2.0% European Value Fund 2.5% N. America 3.4% W. Europe 3.0% Nordics 0.7% Japan 0.6% CEE 0.1% Asia ex Japan 1.9% L. America 0.2% Flexible Fixed Income Fund 40.5% Emerging Market Bond Fund 22.5% Global Bond Fund 27.0% Money Market 20.3% Low risk 30.5% Medium risk 19.0% High risk 20.2% 15

Bonds Equities Moderate Portfolio Asset Fund name Weight Allocation Global Stable Equity Fund - Euro Hedged 16.5% Emerging Stars Equity Fund 6.0% European Value Fund 4.5% Nordic Equity Small Cap Fund 3.0% N. America 10.2% W. Europe 6.9% Nordics 4.3% Japan 1.8% CEE 0.4% Asia ex Japan 5.8% L. America 0.6% Flexible Fixed Income Fund 21.0% Emerging Market Bond Fund 21.0% Global Bond Fund 28.0% Money Market 10.5% Low risk 25.0% Medium risk 17.4% High risk 17.2% 16

Bonds Equities Balanced Portfolio Asset Fund name Weight Allocation Global Stable Equity Fund - Euro Hedged 20.0% North American Value Fund 5.0% European Value Fund 10.0% Nordic Equity Small Cap Fund 5.0% Emerging Stars Equity Fund 10.0% Emerging Market Bond Fund 15.0% Global Bond Fund 35.0% N. America 17.4% W. Europe 11.8% Nordics 7.8% Japan 2.2% CEE 0.6% Asia ex Japan 9.3% L. America 1.0% Low risk 22.4% Medium risk 16.6% High risk 11.0% 17

Bonds Equities Progressive Portfolio Asset Fund name Weight Allocation Global Stable Equity Fund - Euro Hedged 28.0% North American Value Fund 7.0% European Value Fund 14.0% Nordic Equity Small Cap Fund 7.0% Emerging Stars Equity Fund 14.0% N. America 24.4% W. Europe 16.5% Nordics 10.9% Japan 3.1% CEE 0.8% Asia ex Japan 13.0% L. America 1.4% Emerging Market Bond Fund 9.0% Global Bond Fund 21.0% Low risk 13.5% Medium risk 10.0% High risk 6.6% 18

Bonds Equities Aggressive Portfolio Asset Fund name Weight Allocation Global Stable Equity Fund - Euro Hedged 36.0% North American Value Fund 9.0% European Value Fund 18.0% Nordic Equity Small Cap Fund 9.0% Emerging Stars Equity Fund 13.5% Asian Focus Equity Fund 4.5% Emerging Market Bond Fund 3.0% Global Bond Fund 7.0% N. America 31.3% W. Europe 21.2% Nordics 14.0% Japan 4.0% CEE 0.8% Asia ex Japan 17.5% L. America 1.3% Low risk 4.5% Medium risk 3.3% High risk 2.2% 19

Historical performance (monthly returns, Model Portfolio)* 150 145 140 135 130 125 120 115 110 105 100 95 Conservative Moderate Balanced Progressive Aggressive *The performance represented is historical; past performance is not a reliable indicator of future results and investors may not recover the full amount invested. Historical performance is calculated based on the actual funds in the model portfolio. 20

Choosing the suitable investment strategy (Simplified Model Portfolio) What is the purpose of your investments? Maintaining your wealth Your first priority is to limit the risk. You accept a lower return in order to minimize the risk of loss. Conservative risk profile Growing your wealth You want to increase your wealth. You accept a reasonable risk of loss in order to gain a reasonable return. Balanced risk profile Growing your wealth considerably You mainly seek high returns in order to increase your wealth. You accept a high risk in order to achieve high returns. Aggressive risk profile Conservative Balanced Aggressive Note: Detailed descriptions of the investment strategies are on the next page. 22

Simplified Model Portfolio Strategy Name Fund name Weight Conservative Multi Manager Fund Conservative 100% Moderate Multi Manager Fund Conservative 50% Multi Manager Fund Balanced 50% Balanced Multi Manager Fund Balanced 100% Progressive Multi Manager Fund Balanced 50% Multi Manager Fund Aggressive 50% Aggressive Multi Manager Fund Aggressive 100% Simple Model Portfolio provides reasonably close approximation to the optimal asset allocation, which may result in slight difference between Simple and Model portfolio performance. The performance represented is historical; past performance is not a reliable indicator of future results and investors may not recover the full amount invested. 23

Historical performance (monthly returns, Simplified Model Portfolio)* 140 Conaservative Moderate Balanced Progressive Aggressive 120 100 80 *The performance represented is historical; past performance is not a reliable indicator of future results and investors may not recover the full amount invested. Historical performance is calculated based on the actual funds in the model portfolio. 24

Investment profile description Expected yearly return* Expected return distribution (3Y,6Y, 10Y)* Risk during investment period: the worst and the best 12M return Asset class breakdown Conservative You prefer to minimize the fluctuations of your investment value and therefore accept modest wealth accumulation. You are also aware that even a modest wealth accumulation does not eliminate the possibility that for a short period of time the value of your investment can decline somewhat or increase more than on average in long term. 4,5% Min. return Expected return Max. return 3Y -6% 14% 37% 6Y -2% 30% 68% 10Y 7% 55% 114% -15% 26% Oct 07-08 March 09-10 20 % Equity 80 % Bonds Moderate You have a low risk tolerance but you also desire a moderate wealth accumulation. Therefore you accept some decline in your investment value for shorter periods of time in order to increase expected returns on your investment over time. 5,2% Min. return Expected return Max. return 3Y -10% 16% 47% 6Y -7% 35% 88% 10Y 1% 65% 151% -21% 31% 35% Equity 65% Bonds Oct 07-08 March 09-10 Balanced You strive for a somewhat higher expected return on your investment. Therefore you accept fluctuations in your investment value in shorter periods of time in order to enable clear accumulation of your wealth over time. 5,8% Min. return Expected return Max. return 3Y -15% 19% 60% 6Y -13% 41% 112% 10Y -7% 77% 195% -27% 37% 50 % Equity 50 % Bonds Feb 08-09 March 09-10 Progressive You strive for high expected return and can tolerate large fluctuations in the portfolio value both short and long term in order to enable clear accumulation of your wealth over time. 6,8% Min. return Expected return Max. return 3Y -22% 22% 78% 6Y -22% 48% 148% 10Y -18% 92% 266% -37% 45% 70 % Equity 30 % Bonds Aggressive Your main objective is high expected return and you can tolerate large fluctuations in the portfolio value over time including negative portfolio return not only for a short period of time but also for longer periods. Therefore you accept that time is needed for high average return to materialize into clear accumulation of wealth; i.e. you have a long investment horizon. 7,7% Min. return Expected return Max. return 3Y -28% 25% 97% 6Y -31% 56% 190% 10Y -29% 110% 351% Feb 08-09 March 09-10 -46% 90 % Equity 10% Bonds * The expected return at the end of the investment horizon will fall into the shown range with 90% probability. The expected return (minimum, average as well as maximum return) is calculated based on Luminor's own long term assumptions on risk and expected return of respective asset classes (equities and bonds). Calculations are long term estimates and the result is not guaranteed. Expected return calculations do not take into account inflation, fees or taxes. The expected return can not be regarded as a safe indicator of the future investment results actual return may differ significantly from the one specified in this presentation. Investor may lose part or all of his invested capital. All investment risks are borne by the customer. 53% Feb 08-09 Feb 09-10

Allocation between asset classes is chosen according to customer risk tolerance and return expectation Bonds Equities USD Model Portfolio solution Portfolio composition Fund name Weight Allocation* Global Small Cap Fund (USD) 16% N.America 55.1%, W.Europe 20.3%, Japan 11.0% North American Value Fund (USD) 40% N.America 98.2%, Cash 1.8% European Value Fund (USD) 22% W. Europe 53.8%, Nordics 27.5% Emerging Stars Equity Fund (USD) 22% Asia, ex. Japan 76.6%, L.America 9.2% Emerging Market Bond Fund (USD) 15% BBB 23.2%, BB 35.2%, B 27.2% US Corporate Bond Fund (USD) 40% BBB 62.2%, A 15.0%, BB 9.6% US Total Return Bond Fund (USD) 45% AA 61,7%, AAA 9% Regions with highest allocation in fund portfolio for equity funds Top 3 bond rating allocation in portfolio for bond funds 27

Actual USD Model Portfolio asset allocation (based on fund investments) Equity regional allocation Bond risk level allocation North-America 49.8% Western-Europe 19.6% Nordics 6.6% Japan 1.8% CEE 0.8% Asia ex Japan 19.4% Latin-America 2.0% Low risk 38.8% Medium risk 38.0% High risk 23.2% 28

USD investment profile historical performance (yearly returns)* 40% 30% 20% Aggressive 10% Progressive 0% -10% -20% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD Balanced Moderate Conservative -30% -40% -50% *Historical performance is calculated with annual portfolio rebalancing done on the last trading day of each year. Until 31.12.2013 the historical performance is based on the returns of the underlying indices. Starting from 01.01.2014, the performance is calculated based on the specific funds in the model portfolio. Shown historical performance does not include any transaction costs, taxes or any other fees that may apply. The historical performance is presented for information purpose only. Investors actual investment result may differ from the one presented here. Past performance is not a reliable indicator of future results and investors may not recover the full amount invested. 29

Historical performance (monthly returns, USD Model Portfolio)* 135 Conservative Moderate Balanced Progressive Aggressive 130 125 120 115 110 105 100 95 *The performance represented is historical; past performance is not a reliable indicator of future results and investors may not recover the full amount invested. Historical performance is calculated based on the actual funds in the model portfolio. 30

Bonds Equities Since 01.01.2014 Fund name Weight Global Stable Equity Fund (EUR) 40% European Value Fund (EUR) 25% Emerging Markets Focus Equity Fund 10% Nordic Ideas Equity Fund 20% Asian Focus Equity Fund 5% European Low CDS Government Bond Fund 20% European Covered Bond Fund 50% Global High Yield Bond Fund 30% 32

Bonds Equities Since 02.07.2014 Fund name Weight Global Stable Equity Fund (EUR) 40% European Value Fund (EUR) 25% Emerging Markets Focus Equity Fund 15% Nordic Ideas Equity Fund 15% Asian Focus Equity Fund 5% Emerging Market Bond Fund 15% European Covered Bond Fund 70% Global High Yield Bond Fund 15% 33

Bonds Equities Since 08.08.2014 Fund name Weight Global Stable Equity Fund (EUR) 40% European Value Fund (EUR) 20% Emerging Markets Focus Equity Fund 15% Nordic Ideas Equity Fund 15% Asian Focus Equity Fund 10% Emerging Market Bond Fund 15% European Covered Bond Fund 70% Global High Yield Bond Fund 15% 34

Bonds Equities Since 03.09.2014 Fund name Weight Global Stable Equity Fund (EUR) 45% European Value Fund (EUR) 20% Emerging Markets Focus Equity Fund 20% Nordic Ideas Equity Fund 10% Asian Focus Equity Fund 5% Emerging Market Bond Fund 15% European Covered Bond Fund 70% Global High Yield Bond Fund 15% 35

Bonds Equities Since 03.02.2015 Fund name Weight Global Stable Equity Fund (EUR) 35% North American Value Fund 10% European Value Fund (EUR) 20% Nordic Ideas Equity Fund 15% Emerging Stars Equity Fund 15% Asian Focus Equity Fund 5% Global Bond Fund 70% Emerging Market Bond Fund 30% 36

Bonds Equities Since 01.11.2015 Fund name Weight Global Stable Equity Fund (EUR) 35% North American Value Fund 10% European Value Fund (EUR) 20% Nordic Equity Small Cap Fund 15% Emerging Stars Equity Fund 15% Asian Focus Equity Fund 5% Global Bond Fund 70% Emerging Market Bond Fund 30% 37

Bonds Equities Since 03.06.2016 Fund name Weight Global Stable Equity Fund (EUR) 35% North American Value Fund 10% European Value Fund (EUR) 20% Nordic Equity Small Cap Fund 15% Stable Emerging Markets Equity Fund 15% Asian Focus Equity Fund 5% Global Bond Fund 70% Emerging Market Bond Fund 30% 38

Bonds Equities Since 01.08.2016 Fund name Weight Global Stable Equity Fund (EUR) 40% North American Value Fund 10% European Value Fund (EUR) 20% Nordic Equity Small Cap Fund 10% Stable Emerging Markets Equity Fund 15% Asian Focus Equity Fund 5% Global Bond Fund 70% Emerging Market Bond Fund 30% 39

Bonds Equities Since 31.01.2017 Fund name Weight Global Stable Equity Fund (EUR) 40% North American Value Fund 10% European Value Fund (EUR) 20% Nordic Equity Small Cap Fund 10% Emerging Stars Equity Fund 15% Asian Focus Equity Fund 5% Global Bond Fund 70% Emerging Market Bond Fund 30% 40

Bonds Equities Since 10.05.2017 Fund name Weight Global Stable Equity Fund (EUR) 40% North American Value Fund 10% European Value Fund (EUR) 20% Nordic Equity Small Cap Fund 10% Emerging Stars Equity Fund 20% Global Bond Fund 70% Emerging Market Bond Fund 30% 41

Disclaimer The expected return distribution at the end of the investment horizon is determined with a 90% probability. The expected return (minimum, average as well as maximum return) is not guaranteed and is calculated based on the historical data and future assumptions. The expected return can not be regarded as a safe indicator of the future investment results actual return may differ significantly from the one specified in this presentation. The value of the investment portfolio may grow or shrink depending on the developments in the global financial markets, which are affected by a number of risk factors. Investor may lose part or all of his invested capital. Luminor bears no responsibility for any losses that the customer might incur by relying on the information contained in this presentation. 42

Luminor fund portfolios. November 2017