Risks in investment activities

In addition to pursuing steady asset growth, the guiding principle of Norvestia's investment activity is to diversify investments and thereby reduce overall risk.

The investment portfolio has been widely diversified in shares of various companies and partly across several geographical areas. The distribution of investments across various industries depends on industry-specific factors and their development. A significant proportion of investments may occasionally be focused on certain types of investments and securities, the negative development of which may substantially decrease Norvestia’s result.

As in all business operations, there is a risk involved also in Norvestia’s investment activities. Norvestia's performance is greatly affected by economic development and changes in share prices both in Finland and abroad. In addition, changes in exchange rates, particulary between the Swedish krona and the euro, impact the company’s result, since the majority of Norvestia’s hedge fund investments are krona-denominated. So any strengthening of the krona against the euro would improve returns from Norvestia’s Swedish funds. In turn, however, changes in other exchange rates may affect the funds’ krona-denominated results.