Evli Nordic Corporate Bond

Long-term fixed income fund that invests in Nordic corporate bonds

NAV
25.02.2021
Return %
Year-To-Date
Return %
1 y
Return % p.a.
3 y
Return % p.a.
5 y
Return % p.a.
Since start
88.234 0.53 -0.03 1.16 2.56 2.67
NAV
25.02.2021
Return %
Year-To-Date
Return %
1 y
Return % p.a.
3 y
Return % p.a.
5 y
Return % p.a.
Since start
144.200 0.53 -0.03 1.16 2.56 2.67
NAV
25.02.2021
Return %
Year-To-Date
Return %
1 y
Return % p.a.
3 y
Return % p.a.
5 y
Return % p.a.
Since start
102.600 0.59 0.32 1.51 2.90 3.04
NAV
25.02.2021
Return %
Year-To-Date
Return %
1 y
Return % p.a.
3 y
Return % p.a.
5 y
Return % p.a.
Since start
151.468 0.59 0.32 1.51 2.90 3.04

Risk

3/7

Morningstar

3/5

Recommended Investment Horizon

3 years or more

Administrative fees

0.75 % p.a.

 

 


Suitable for investors

  • who want to benefit from the competitive performance of the Nordic corporate bond market
  • who prefer a stable Nordic political and economic operating environment
  • who want to benefit from Evli’s expertise in Nordic corporate bonds
  • who want to invest responsibly and take into account not only economic analysis but also environmental, social and good governance (ESG) factors.

Invest

min. 1 000 €

Investment Policy

Evli Nordic Corporate Bond Fund is a long-term corporate bond fund that mainly invests in bonds issued by Nordic companies, financial institutions and other organizations. The investments are made in rated investment grade and high yield bonds and unrated corporate bonds. The fund may also invest in derivatives contracts both for hedging purposes and as part of its investment strategy.

Responsibility

ESG factors are integrated into the fund’s investment decisions, and the aim is to select companies with a high ESG score, that is, the fund uses so-called positive selection. In addition to Evli's general exclusion practices, the fund excludes alcohol and weapons manufacturers, gambling companies and fossil fuel mining, extracting, drilling and refining companies from its investments. The fund’s investments are monitored for violations of UN Global Compact norms and the Climate Change Principles, and the fund engages with the companies they invest in or exclude them if violations are detected. The ESG indicators of the fund is reported in fund-specific ESG report, which is updated four times a year.

Read more about Evli's responsible investing

 

The portfolio is managed by

Jani Kurppa

Jani Kurppa

Investment Objective and Risks

The fund’s goal is to out-perform the benchmark index over the long term. The return expectation and risk of funds investing in corporate bonds are generally higher than the return expectation and risk of funds that invest solely in government bonds.

The fund does not require its investments to be credit-rated, which means that the fund's investments are subject to an average or high credit risk. The credit risk arising from individual issuers is reduced by diversifying the investments among various issuers.

The fund’s investments carry a credit risk

Credit risk originates from a bond issuer’s ability to repay the bond’s coupons and capital on the maturity date. In the fund’s investments, the default risk arising from an individual issuer is reduced by diversifying the investments among various issuers. The risk premium (credit margin) required by investors varies during the bonds’ exercise period according to the market conditions and factors related to individual issuers.

As the credit risk grows, the values of the bonds in the portfolio decrease and vice versa. Lower credit-rated High Yield bonds, in particular, carry a significant credit risk.

The fund’s value is affected by interest rate risk

A decrease in interest rates raises the value of the fund, while an increase reduces the value of the fund. Interest rate risk may be measured with the average remaining exercise period (duration). Interest rate risk indicates how sensitive the value of the fund is to changes in interest rates. Long-term fixed income funds are much more sensitive to interest rate movements than money market funds. The value of the fund may fluctuate heavily if there are substantial changes in interest rates.

Monthly review

31.01.2021

Nordic markets were more positive than others as the recovery in prices continues. The limited supply in vaccines was pressuring the sentiment, but central bank buying remained steady. The German 10yr government bond yield rose to -0.52%.

Nordic bond prices have not rallied at the same pace as similar European credits. As a result, relative value in the Nordics is now at a better level than before the crisis. Economic signs and company results indicate that Nordic economies will manage the crisis well from a relative perspective. All Nordic central banks or governments have announced buying corporate bonds from the secondary and primary markets. Also, all countries have started many direct programs to support companies.

The fund return in January was good at +0.36%, as prices were recovering. The fund participated again in the first new issues after the December break. We will continue to focus in good quality companies, which can withstand the negative cycles. The fund’s yield level was 1.72% after currency hedging. Duration was 2.55 years.

Fund facts

Type of fund Nordic corporate bond fund (UCITS)
Investment activity began 16.04.2007
Current strategy since 31.03.2016
Benchmark index

ICE BofAML 1-5 Year Euro Corporate Index

Profit distribution Fund-units are divided into A and B units. Profit share of at least 3% is distributed on A units annually.

Downloadable files

Invest

min. 1 000 €