European Financial Fund (UCITS): The fund was down 1.8% in September and is currently at -2.2% YTD.

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1 European Financial Fund (UCITS): The fund was down 1.8% in September and is currently at -2.2% YTD. We have had a bearish view for the past months and held high portions of cash. We were, in terms of exposure, overweight Nordic banks and underweight other European banks. We were more optimistic to the fundamentals and the economic health up north. The valuation of the banks represents in general the health of the economy, always. In the Nordic countries, especially in Norway, valuations might decline further, in advance of higher write-downs linked to oil-service, and even more margin-pressure due to the low rate levels. Most about banking related articles in the media lately is about capital requirements (Basel III and Basel IV). The aim of Basel IV is partly offsetting the differences between countries in how weighting risks. Norway has adopted a very strict interpretation, which has resulted in substantial differences between foreign and Norwegian banks. Norges Bank decided to reduce its key interest rate by 0.25% at the monetary policy meeting on September 24 th. There are prospects of lower growth, lower inflation and rising unemployment. Nordea and Handelsbanken are facing demands for higher capital in the so-called SREP- process. SREP is a European process (Supervisory Review and Evaluation Process) to equalize differences in the way weighting the risks related to capital adequacy. The uncertainty surrounding this makes Swedish analysts cautious with new recommendations. Deutsche Bank replaced top-management early June. The bank had from 2010 to 2014, paid more than $ 14 billion in costs related to the litigation. In addition, the bank was fined $ 2.5 billion for the manipulation of Libor and Euribor (interbank rates). According to the bank, no dividends will be paid to shareholders in The writedowns include Investment banking, reduced value of the subsidiary bank Postbanken and losses in connection with participation in the Chinese bank Hua Xia. Also more lawsuit costs of 4.5 billion euros on the top of this. It is worth noting that the results announced, did not have any appreciable effect on the share price. Markets in general: Markets continued down in September, which also affected the fund this month. Equity markets, DAX, OBX and S&P were down -5.8%, -2.7% and -2.5% respectively. The Nikkei, Shanghai and the Hang Seng fell by -7.5%, -4.7% and -3.2%. HFRX (CTA/Macro), HFRFOF, (Hedge Fund of Fund) and HFXEH (Hedge equity) were all down -0.6%, - 1.9% and -2.0%. Alfred Berg Høyrente was down -5.4%. The major concerns this year has been the economic growth in China. The devaluation of the Chinese Yuan/USD surprised the markets, causing the turbulence. A cooling of the Chinese economy negatively affects the price of oil and other commodities and will affect many of the companies on Oslo Stock Exchange. There are still leading analysts arguing the brent oil will return to 60- $ 70 pr. barrel this year. Another effect, and for many companies a positive one, is the depreciation of the Krone against US dollar and Euro. There is a general perception that the oil price and the exchange rate are positively correlated,and with investors acting in accordance to this correlation, the perception is in a way self-fulfilling. The weak Krone translates to increased value for export industries and tourism. Even within the oil service industry there is enthusiasm over the weaker krone, as the sale of equipment and services to the international oil industry, is Norway's largest export after petroleum. We still think market risk is considerably high and we therefore continue to manage a conservative portfolio. I.e. high cash holdings and healthy securities.

2 NEF EUROPEAN FINANCIALS - Portfolio Allocation 1 ALLOCATION ON OCT CHANGE IN ALLOCATION OVER PERIOD WEIGHT CFMI Country Start End Change Norway Cash Sweden Germany Denmark Others ALLOCATION TRENDS FROM FEB TO OCT

3 2 Top 10 Holdings Security Weight End Return Contribution Market Value Value Change Norwegian Krone ,807,542-5,711,577 B2holding As Nok ,000,000 1,000,000 Norwegian Fin Nok , ,000 Swedbank Ab Ser'a'npv , ,850 Pareto Bank A Nok , ,000 Sparebanken O Nok10 Grunn , ,600 Sparebanken M Nok100 Grun , ,500 Totens Spareb Nok60 Grunn , ,000 Skue Spareban Nok30 Grunn , ,070 Sparebank 1 B Nok50 Grunn , ,608 Top 10 Value Change Security Return Weight End Contribution Market Value Value Change Norwegian Krone ,807,542-5,711,577 B2holding As Nok ,000,000 1,000,000 Norwegian Fin Nok , ,000 Swedbank Ab Ser'a'npv , ,850 Pareto Bank A Nok , ,000 Sparebanken O Nok10 Grunn , ,600 Sparebanken M Nok100 Grun , ,500 Totens Spareb Nok60 Grunn , ,000 Skue Spareban Nok30 Grunn , ,070 Sparebank 1 B Nok50 Grunn , ,608

4 3 Average Weight Return Contribution Market Value Value Change Total ,857,046 3,842,326 Cash ,105,743-5,413,377 Danish Krone European Union Euro , ,200 GBP Cash Norwegian Krone ,807,542-5,711,577 Swedish Krona Swiss Franc Denmark , ,672 Danske Bank A Dkk Topdanmark As Dkk Tryg A/s Dkk , ,672 France Bnp Paribas Eur Credit Agrico Eur Ingenico Eur Natixis Eur Soc Generale Eur Germany , ,259 Commerzbank A Npv Deutsche Bank Npv(Regd) , ,259 Italy ,886 5,886 Bca Mps Npv (Post Reverse Bca Mps Npv Sub Right Intesa Sanpao Eur Unicredit Spa Npv ,886 5,886 Norway ,766,643 6,271,043 B2holding As Nok ,000,000 1,000,000 Dnb Asa Nok , ,860 Gjensidige Fo Nok Helgeland Spa Nok10 Grunn , ,625 Norwegian Fin Nok , ,000

5 4 Average Weight Return Contribution Market Value Value Change Pareto Bank A Nok , ,000 Protector For Nok , ,000 Sandnes Spare Nok100 Grun Sandnes Spare Nok100 Grun , ,500 Skue Spareban Nok30 Grunn , ,070 Sparebank 1 B Nok50 Grunn , ,608 Sparebank 1 S Nok20 Grunn Sparebank 1 S Nok Sparebanken M Nok100 Grun , ,500 Sparebanken O Nok10 Grunn , ,600 Sparebanken V Nok25 Grunn Sparebk 1 Nor Grunnfondsb Storebrand As Ser'a'nok Totens Spareb Nok60 Grunn Totens Spareb Nok60 Grunn , ,000 Spain ,620 20,620 Banco Santand Eur0.50(Reg ,620 20,620 Banco Santand Eur0.50(Stk Bankia S.A. Eur Bankinter Sa Eur0.3(Regd Sweden ,024,028 2,024,028 Nordea Bank A Ord Npv(Sek , ,442 Skand Enskild Ser'a'npv , ,481 Svenska Hande Ser'a'npv , ,255 Swedbank Ab Ser'a'npv , ,850 Switzerland Julius Baer G Chf0.02 (Re Unclassified Banco Santand Eur Stoxx 600 P430 18sep15etd United Kingdom Barclays Ord Gbp

6 5 Average Weight Return Contribution Market Value Value Change Hsbc Holdings Ord Usd Lloyds Bankin Ord Gbp Royal Bk Scot Ord Gbp1 (P Standard Char Ord Usd Tsb Banking G Ord Gbp