The Oslo Børs Mutual Fund Index (OSEFX) was one of the new concepts introduced when Oslo Børs launched a completely new index family earlier this year. On 1 September a total of 47 Norwegian funds started to use this specialised mutual fund index as their benchmark index in place of the old All Share Index. The new index is structured to take into account the restrictions on investment allocation that the so-called UCITS directive of the European Commission imposes on a number of mutual funds. These restrictions form part of the Norwegian Mutual Funds Act. The Norwegian Mutual Fund Association was heavily involved in designing the regulations for the Oslo Børs Mutual Fund Index in order to provide an optimum solution for both investment managers and their fund customers.
The Oslo Børs Mutual Fund Index is structured as a benchmark index that is capable of investment replication, and takes into account these legal restrictions on investment allocation. This makes it possible to construct and manage equity funds with a composition closely similar to the weightings used in the index.
The Mutual Fund Index uses precisely the same selection of shares as the Oslo Børs Benchmark Index, but the weighting of shares is subject to specific additional restrictions:
- No single company can account for more than 10% of the index
- Companies with a weighting in excess of 5% cannot, in aggregate, account for more than 40% of the index.
