Investment strategy for TONO’s assets under management

Adopted by TONO’s Annual General Meeting on June 8 2022 (originally adopted by TONO’s Board of Directors on 6 February 2019). Last updated at TONO’s annual general meeting on June 6, 2023.

TONO must manage assets in a conservative manner. The primary considerations for bank deposits and fund portfolios are security, returns and liquidity. The key management criterion for TONO is low risk, but given this requirement, efforts will be made to achieve the best possible return on the funds. The investment management strategy set out in this document will remain in force until the Annual General Meeting has adopted a new and amended strategy. The investment strategy will be considered by TONO’s Annual General Meeting on an annual basis.

Basic premise

The main objective of TONO’s investment strategy is to manage the funds in the best possible way until they are settled and distributed to rights holders. Despite frequent settlements and an increasing number of on-account payments, TONO has a large and long-term capital base. The return on this capital must be achieved through low-risk and low-volatility investments.

Choosing a long-term investment strategy would result in stronger fluctuations in value, with the result that the financial market would become too significant a factor for the magnitude of the settlement amount each performance year. TONO has therefore adopted a low-risk, short-term investment strategy, despite the fact that the expected return will be lower than for long-term investments, and by taking increased risk.

The fundamental principles of long-term investments do not preclude TONO from allocating portions of its capital base to acquire real estate properties that simultaneously meet the needs for business premises.

TONO does not use active managers. This is because TONO largely invests its capital in index-based funds that have low management costs and minimal risk. With such a portfolio, the expectation of a stronger return through the use of active management will not exceed the extra costs associated with active management.

Management parameters and objectives

The following instructions are intended to guide asset management in TONO:

  • The aim is to maintain a low risk profile.
  • The objective of expected return is to retain the inflation-adjusted value of capital assets and to achieve the highest possible return given the low risk.
  • TONO has a short-term placement strategy to ensure a reasonable and fair distribution of annual results.
  • The placement of assets should be based on a conservative approach.
  • The investment portfolio must contain only traditional asset classes, such as equities, bonds, the money market, property, as well as term deposits or ordinary bank deposits.
  • Equities must only be used in periods of particularly low historical values, and must be presented to TONO’s Board of Directors before investments are made.
  • In the case of investments in commercial properties, the intention must be that parts of the property will be utilized by the entity itself.
  • The requirement for low risk is more important than the required rate of return.
  • The portion of the portfolio that constitutes fixed income securities must be allocated to at least two managers in order to reduce management risk.
  • The portion of the portfolio mentioned above must be divided into at least five products, with emphasis on the funds with the lowest risk in each class.
  • With a view to increasing returns, up to 25 per cent of the portfolio may be invested in funds with slightly higher risk, but never in funds that have more of a medium risk in their class.
  • Up to 25 per cent of the portfolio may be invested in fixed-income securities with a maturity (duration) of more than six months.
  • The average maturity of the entire portfolio must not exceed six months.
  • All aspects of risk must be considered. This applies to credit, interest, management, liquidity and currency risk.
  • Investments must not be made in individual shares.
  • If funds have foreign securities in their portfolio, they must always be currency-hedged.
  • In each class, the proportion of foreign securities must never exceed *** Foreign funds must not exceed 25 per cent.

The portfolio can be combined with the external constraints described in the table below:


Asset class


(specified in % of the entire portfolio)

Bank deposits 20–70%
Money market funds 0–60%
Bond funds, Norwegian 0–30%
Equity funds (only at historically low prices) 0–10%

Management risk and interest rate risk

Based on the portfolio that TONO compiles, the two main risk factors will be management risk and interest rate risk. We will therefore address the most important criteria related to this risk assessment.

  1. Choice of managers

Asset managers must be able to document that returns on the funds they manage have produced good results over time. The managers must be competitive and must be selected on the basis of qualitative and quantitative criteria. Ethics and sustainable development must also be considered when assessing management and choice of product. In addition, transaction and management fees must be taken into account in the assessment.

  1. Interest rate risk

Both money market and bond portfolios are exposed to interest rate risk. Interest rate fluctuations cause the prices of fixed-income securities to rise or fall. The longer the maturity of the underlying securities, the greater the changes in value. To limit this risk, an upper limit for average duration will have a limiting effect on interest rate changes.

Ethical guidelines and sustainable development

TONO must strive to follow strict ethical guidelines where possible. This means that we only choose placements that are transparent, which will enable us to verify our requirements to a certain extent.

Society places great emphasis on all activities being sustainable. The field of sustainable asset management is also under constant development. TONO will emphasise this when choosing investments, and we will also ask for quality-assured data related to sustainability considerations.

Management, monitoring and control

The CFO must always submit proposals to the CEO regarding changes to the composition of the portfolio if:

  • The CFO chooses to use asset managers that have not previously been used.
  • The CFO chooses to invest in products that have not previously been used to invest funds.

When submitting the quarterly reports that include comments, there must be a simple presentation of the status of the investments and a confirmation of compliance with applicable limits and guidelines.

Each year, TONO’s Board of Directors assesses asset management in relation to this strategy.