Evli European Investment Grade
Long-term fixed income fund that invests in European corporate bonds with high credit ratings
| 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 |
|---|---|---|---|---|---|
| 104.704 | -0.53 | 1.58 | 2.09 | 2.82 | 4.04 |
| 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 |
|---|---|---|---|---|---|
| 219.413 | -0.53 | 1.58 | 2.09 | 2.82 | 4.04 |
| 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 |
|---|---|---|---|---|---|
| 109.778 | -0.48 | 1.94 | 2.46 | - | 2.51 |
Risk
Morningstar
Recommended Investment Horizon
Administrative fees
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
- 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 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.
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.
The portfolio is managed by
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
31.01.2021Markets were in a sideways movement during January. Limited supply in vaccines was pressuring the sentiment, but ECB buying remained steady. The German 10yr government bond yield rose to -0.52%. Investment grade bond spreads remained unchanged.
The fund return in January was close to zero at -0.01%. The return was better than the benchmark index return as the fund risk positions and shorter duration worked well. 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 bought longer maturity, ECB-eligible bonds from new issues. The fund duration was almost neutral at 4.9 years and yield 1.1%.
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. |