Evli European Investment Grade

Long-term fixed income fund that invests in European corporate bonds with high credit ratings

NAV
02.07.2020
Return %
Year-To-Date
Return %
1 y
Return % p.a.
3 y
Return % p.a.
5 y
Return % p.a.
Since start
100.733 -1.16 -0.52 1.33 2.19 3.97
NAV
02.07.2020
Return %
Year-To-Date
Return %
1 y
Return % p.a.
3 y
Return % p.a.
5 y
Return % p.a.
Since start
211.092 -1.16 -0.52 1.33 2.19 3.97
NAV
02.07.2020
Return %
Year-To-Date
Return %
1 y
Return % p.a.
3 y
Return % p.a.
5 y
Return % p.a.
Since start
105.374 -0.99 -0.17 1.71 - 1.69

Risk

3/7

Morningstar

3/5

Recommended Investment Horizon

3 years or more

Administrative fees

0.75 % p.a.

Suitable for investors

  • who wish to improve the returns of their fixed income investments with only a very moderate increase in the level of risk
  • who wish to benefit from Evli’s experience in European corporate bond markets.

Invest

min. 1 000 €

Evli European Investment Grade Fund is a long-term corporate bond fund that invests mainly in bonds denominated in euros and issued by companies. The investments are focused on bonds with higher credit ratings (Investment Grade), and the average rating is at least Baa3/BBB-. The fund may also invest in convertible bonds and other debt and debt-related instruments.

The fund’s investment policy complies with Evli’s policies for responsible investment. The fund excludes from its investments in addition to companies manufacturing controversial weapons and tobacco, companies manufacturing alcohol, gambling, adult entertainment, weapons and fossil fuels (mining and extraction). 

 

The portfolio is managed by

Jani Kurppa

Jani Kurppa

Investment Objective and Risks

The aim is to earn a return that, in the long term, exceeds the return of the benchmark index. The expected return and level of risk of Evli European Investment Grade are higher than those of a fund that invests solely in government bonds.

The fund may make use of the general outlook on the fixed income market by adjusting the effective duration of fixed income investments within the range of ± 3 years relative to the benchmark duration.

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.

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

31.05.2020

The corporate bond market continued to perform strongly in May. In addition to the ECB bond purchases, fund flows were positive too. The German 10yr government bond yield rose and ended at -0.42%. Investment grade bond spreads tightened by 16 basis points, but are still clearly wider than normal.

The fund return in May was positive +0.26% as a result of tighter spreads. The return was better than the benchmark index return. The fund does not hold any oil producers, retailers or travel related companies, which are the most affected sectors by the virus. During the crisis, we have increased corporate hybrids from stable companies at lower levels and also bought longer maturity ECB eligible bonds from new issues. The fund duration was neutral at 5.1 years and yield over 1.6 %.

Fund facts

Type of fund European corporate bond fund (UCITS)
Investment activity began 07.05.2001
Benchmark index

ICE BofAML EMU Non-Financial Corporate Index 80 %, ICE BofAML EMU Financial Corporate Index 20 %

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 €