News: SOL Norway sovereign fund excludes three more firms from portfolio, page-22

" good return on equity" ..... REALLY ??
NO !!
here are the annual ROEs for the past 10 yrs up until 2018/07

8.5 6.5 5.7 6.0 6.1 3.9 6.1 6.6 7.9 10.5

hooray, they finally made it ( just ) to double figures.
I would not call these figures good in any way shape or form !!
lots of people would argue that companies generating ROEs in single figures
are not worth investing in."

@woollydog,

Except that, for a company like SOL, whose principal activity is an investment holding company, what those ROE figures you quote totally overlook is the value of the company's various investments which held for the long-term and are therefore not marked to market every year.

The single-digit ROE you are seeing, and taking at face value, is only the dividends, interest and other income distributions received annually from SOL's portfolio of investments, as well as the booked capital gains on the rare occasion that SOL does liquidate an investment it holds.

On average the stock market rises by around 7%pa to 8%pa over time, and given SOL would have outperformed the market by, say 2%pa or 3%pa over time, there is probably a 9%pa to 11%pa, say 10%pa, embedded investment return that is not manifesting itself in the reported profits which form the basis of the ROE's you have quoted.

You need to add an addition, say 10% to those ROE figures you've quoted in order to understand the real underlying ROE, not just the "accounting" ROE, which is almost meaningless in this case.

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