Evli Leveraged Loan

Fixed income fund that invests in the Nordic leveraged loan markets

NAV
31.08.2022
Return %
Year-To-Date
Return %
1 y
Return % p.a.
3 y
Return % p.a.
5 y
Return % p.a.
Since start
95.622 -1.05 -1.41 - - -1.41
NAV
31.08.2022
Return %
Year-To-Date
Return %
1 y
Return % p.a.
3 y
Return % p.a.
5 y
Return % p.a.
Since start
98.589 -1.05 -1.41 - - -1.41
NAV
31.08.2022
Return %
Year-To-Date
Return %
1 y
Return % p.a.
3 y
Return % p.a.
5 y
Return % p.a.
Since start
99.034 -0.75 -0.97 - - -0.97

Risk

4/7

Morningstar

0/5

Recommended Investment Horizon

more than 4 years

Administrative fees

0.95 % p.a.

Suitable for investors

  • who want to invest in a Nordic fixed income asset class with a fixed income portfolio that is efficiently diversified
  • who want to invest in floating-rate and secured corporate loans arranged by Nordic banks
  • who seek solid return potential on their fixed income investment also in a rising interest rate environment
  • who want to benefit from Evli’s expertise in the Nordic fixed income and credit markets.

Please contact the Investor service

min. 10 000 €

Investment Policy 

Evli Leveraged Loan Fund (AIF) is a corporate loan fund that invests primarily in syndicated leveraged corporate loans issued by Nordic and European companies. Leveraged corporate loans are corporate loans in which the borrower is a company whose credit rating is BB+ or lower (sub-investment grade credit rating), and which the company acting as a borrower uses for financing, for instance, an acquisition, growth investments, or infrastructure or real estate investments, possibly using leverage, in order to increase the efficiency of the company's capital structure. In addition, the fund's assets are invested in bonds and other debt instruments.

No average credit rating requirement has been set for the investments, and the fund may also invest in unrated corporate loans and bonds. The fund's investment instruments are not necessarily traded on the stock markets or on another regulated market.

Fund fees

Subcription fee: 0%

Management fee: 0.95% per year 

Redemption fee (paid to the Fund based on the holding period):
- Fund’s holding period ≥12 months, 0 %
- Fund’s holding period <12 months, 2 %

Fund units may generally be subscribed for on the last Finnish banking day of each quarter. Fund units may generally be redeemed twice each year on the fund's general redemption dates.

Please contact the Investor Service if you want to make a subscription in the fund.

 

The portfolio is managed by

Jussi Hyyppä

Jussi Hyyppä

Mikael Lundstrom

Mikael Lundström

Investment Objective and Risks

The fund’s investment objective is to achieve a predictable and steady cash flow for investors in the form of fixed income returns and value increase in investment instruments when it is appropriate.

The fund’s return target in the long term is on average the 3-month Euribor plus 4–5% per annum.

The fund’s return expectation and risk are generally higher than the return expectation and risk of funds that invest solely in government bonds.

The fund’s investments carry a credit risk

Credit risk arises from the loan issuer’s ability to pay the loan interest and the loan principal on the due date. In the fund’s investments the credit loss risk arising from individual issuers is reduced by diversifying the investments among various borrowers. The risk premium (credit margin) required by investors varies during the loan’s exercise period, due to the influence of market conditions and issuer-specific factors. When credit risk increases, the values of the loans in the portfolio will decrease and vice versa. Lower credit-rated high yield bonds, in particular, are subject to a substantial credit risk.

The fund’s value is affected by interest rate risk

A decrease in interest rates raises the fund’s net asset value, and conversely, an increase in interest rates reduces the fund’s net asset value. Interest rate risk can be measured with the average remaining exercise period (duration) of investments. Interest rate risk describes the fund’s sensitivity in relation to interest rate variations.

The interest rate risk associated with the fund’s investments is limited because the fund invests mainly in floating-rate instruments, which have a low interest rate risk.

Monthly review

31.08.2022

August was a very quiet month in the Nordic leveraged loan and high yield bond primary markets, and new issue activity remained muted. In secondary loan markets, positive sentiment continued in August and secondary loan valuations performed very positively.

Evli Leveraged Loan fund did not execute any new investments in August and the investment portfolio remained unchanged. Value development of the Evli Leveraged Loan fund was very positive, driven by a material positive development in secondary loan valuations and continuing stable and strong performance of investments in the portfolio, which was also reflected in companies’ solid and uneventful Q2 figures. Rising underlying short-term rates were also supporting the fund’s investment activity, as 100% of the investments are tied to floating short-term reference rates.

Despite the prevailing uncertainty, the outlook of the fund’s investment activity is expected to remain positive due to expectations of continuing M&A activity in the Nordics, re-pricing of risk in primary markets and prevailing attractive investment opportunities in secondary markets.

Fund facts

Type of fund Nordic corporate loan fund (AIF)
Investment activity began 31.08.2021
Benchmark index

The fund does not have a benchmark index.

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

Responsibility and consideration of sustainability factors

Sustainability information in accordance with Article 6 of the EU SFDR Regulation 2019/2088 (sustainability‐related disclosures in the financial services sector).

Sustainability risks are taken into account in investment decisions

When building and monitoring the fund’s investment portfolio, traditional financial and other key indicators, such as risk and valuation indicators, and also sustainability risks are taken into account in investment decisions. In addition to the analysis made in connection with investment decisions, the sustainability risk is managed with the exclusion of certain sectors and/or companies. When realized, material sustainability risks can affect the financial performance of the fund’s investment instruments, and therefore the fund’s return.

Excluding certain sectors and/or financial instruments from investment can reduce the fund’s sustainability risk. It can, however, increase the fund’s concentration risk. A potential increase in concentration risk, taken in isolation, may lead to greater volatility and increase the risk of loss.

EU Taxonomy information

The investments underlying this financial product do not take into account the EU criteria for environmentally sustainable economic activities.

ESG strategy

Fund complies with Evli’s Principles for Responsible Investment and Climate Change Principles with regard to exclusion. However, the fund does not promote environmental or social characteristics and its objective is not to make sustainable investments due to its investment strategy or investments.

The Principles for Responsible Investment, the Climate Change Principles and the exclusion consensus criteria apply to all direct investments made by the fund.

The fund can use derivatives or other strategies occasionally, regularly, extensively or not at all. Its key investor information document (KIID) includes information on how often and for what purpose derivatives are used. Such investments are not covered by ESG requirements. 

Evli's responsible investment policy

Evli's Principles for Responsible Investment define the basic standards for norm-based screening and exclusion of companies. For example, they prohibit investments in companies that produce controversial weapons or nuclear weapons and in companies where the proportion of revenue from coal or oil sands exceeds a specified limit.

Read more about Evli's responsible investing

Downloadable files